In the last 6 to 8 years of India’s growth story since 2004, we have heard many economists and market analyzers around the world saying “India enjoys a demographic advantage which has not only boosted India’s growth but helped India achieve high levels of growth despite weak and ineffective governance”.
Indecisiveness and lack of
urgency to take decisions at the right time has been one of the trademarks of
Indian governance. This not only has discouraged investments in different
sectors in the country but also has sent a negative impression about India as an
investment destination. And we all know how much role impression plays in
today’s world. Hurdles are many to make India the least developing nation
in the world. Huge levels of corruption in governance and local administration,
and sky rocketing inflation. Each of these factors is sufficiently capable
enough to push India’s
growth rate way below around 3 to 4%. Despite all these factors taking their
toll on the growth, India
has managed an impressive growth rate of 6 to 8% in the past decade. A part of
this credit goes to demographic advantage that India is having sitting silently on
the back seat. So what actually demographic advantage is? How it really works?
Has it helped India
in achieving desired levels of growth?
Demographic advantage is the
advantage that any country enjoys on the basis of the size of its population
and the average age of its citizens. India being the second most
populous country in the world with its average age of citizens being 21. India's
demographic profile is now in flux and it is changing in a way that is quite
favorable to economic growth. The iron law of demography tells us that baby
boomers reach working age within a period of 15 to 25 years; and when that
happens, the productive capacity of the economy expands on a per capita basis
and a demographic dividend is in prospect. All we need now is the right set of
policies that can generate enough job opportunities for the upcoming work
force. This will magnify the demographic dividends and therefore will push the
growth on right track. This is our time and I hope India writes its own history and
creates its own space in this fast changing world. Hope this happens.
