INDIA OVERTAKES CHINA IN POPULATION

Is demography a dividend or ticking bomb?
By K R Sudhaman 

India has become the world’s most populous nation with 1.43 billion people surpassing China’s 1.42 billion, the latest United Nations  data  says.  It  may  be an elation as India has not only overtaken China in population but also the fact that it has 40 per cent of the population below 25 years, which is described as a demographic dividend. This is at a time when most other countries including China have an ageing population. India is the only country that has a productive population unlike other countries enhancing the capacity to create wealth unlike other countries where wealth creating capacity through human capital is diminishing.

According  to  United  Nations data there is yet another good news on this  front  for  India  as its population is expected to keep rising for nearly three decades before it peaks and then starts declining. The country’s total fertility rate (TFR) stands at 2, even below the ideal replacement rate of 2.1. The world’s TFR,  on the other hand, is 2.31. In 2063, India will touch the peak of its population at 1.69 billion. While all these are welcome, the question is whether India has been cashing in on this much touted demographic dividend or frittering it away due to jobless growth. Statistics reveal that India always had the so-called demographic  dividend  right from independence in 1947.

The share of the young population was always higher with a little variation. But there was never a time in India’s history when India cashed- in on this advantage. Job growth was never higher than demand for jobs at any point of time in independent India. Unemployment rate has been quite high in India and data showed the average was around 6 per cent and ranged between plus minus one percent.  Since  liberalisation of the economy in 1991 the average unemployment rate came down to around 5.6 per cent. In recent years, it had gone up particularly after Covid 19 and it went up to 9 per cent. As a result, millions remained unemployed or underemployed in India at any given time. Even during the middle of the first decade of this century when economic growth was over 9 per cent consistently for 5 to 6 years the job growth was not that encouraging.

People getting into the job market has always been more than those who were getting jobs. Lakhs of people apply for a couple of thousand government jobs advertised from time to time. There are reports to suggest some with doctorate apply for peon’s job particularly in northern states like Uttar Pradesh and Bihar. Jobless growth has become more pronounced in the last ten years. Increasing growth might be good in improving the economic health of the nation but it does not mean improving the economic well-being of all the people. If a petro-chemical complex is set up, it will reflect hugely in economic growth as capital investment is quite high.

But its setting up will reflect very poorly in job creation as a Rs  15,000  crore  investment in a refinery will create just 10,000 to 15,000 jobs. Whereas Rs 15,000 crore investment in small scale industries particularly in food processing will create lakhs of jobs and some in rural areas as well. That’s one of the reasons India’s founding fathers emphasised on development of cottage industries to bring rural prosperity in over 6.3 lakh villages in the country. In fact, the majority of India’s population still lives in villages and creation of jobs in rural India is critical economic development.

Shekhar Aiyer and Ashoka Mody of Princeton University, argue in a World Bank working paper that demographic dividend is not automatic. There has to be effective training and effective mechanisms to make the population employable. If  Japan,  Korea,  China  and other  East  Asian  economies took advantage of demographic dividend in the 1960s, 1970s and until early  21st  century,  it is because they invested heavily in education and health of the people in the early stages of development. This turned out to be a dividend when they opened up their  economies.  In  India the  problem  is  that  it  has not adequately invested in health and education right from  independence.  

Hence it could never cash-in on its demographic dividend. India might have top class institutes of higher learning like IITs, IIMs and Medical institutes, but what the country lacked was quality schools for the  vast  majority  of the people with emphasis on moral education and skilling people to prepare them for jobs. All political parties instead of preparing and teaching people how to fish, preferred to provide them fish by way of doles, a short- term vote-catching measure. This has done no good to the economy.

Mody, who has written a book titled ‘India is broken’ argues Indian leaders right from independence till date, have betrayed the nation in dealing with this basic problem, education and health. As a result the nation has achieved a virtual jobless growth. The last ten years during the Modi era was perhaps among the worst. He also blamed Prime  Minister  Jawaharlal Nehru and Prime Minister Indira Gandhi too on this score.

After 75 years of independence, India might have achieved universal education meaning school  enrolment  of  virtually all eligible children. But the problem is huge dropout rates, particularly after fifth standard, then eighth standard and secondary education. It is more pronounced in the case of girls. Mody blames flawed economic policies and dysfunctional political system for depriving millions of poor and marginalising the much-needed jobs  in  this  country.  Mody argues that chronic and integral failure of the political leadership is responsible for denying opportunity to millions of people. He says the political masters all along have been more interested in formulating policies for short-term and electoral gains, resulting in India never being able to meet the deficits in job creation. Also criminalisation of politics, particularly from Indira Gandhi’s time had made things worse. This has given rise to Robin Hood- type of leaders, who believed it giving doles to win over them for electoral purposes rather than preparing them to stand on their feet.

Mody, who traces the politico- economic history of the country, says that India is ’broken’ because it has not created millions of jobs required for its vast population. It  is  true  that 40 per cent of the population are below the age of 25 years. But where are the jobs for them? In India 10-12 million people enter the job market every year. This has been the case right from the day we became independent. It used to be 7-9 million people entering the job market then. He gave a startling statistic to say that in the ten years from 2012 to 2022, India has had a jobless growth meaning not a single additional job has been created. India would require to create 200 million additional jobs in the next 10 years from a near zero in the previous ten years and this is a stupendous task if not impossible.

So the narrative that is being created that India is in a bright spot is that of the elite. It is true there is an opportunity for India but the question is does India have the wherewithal to create these additional jobs, that too when the faulty education and poor health make this youth not employable. If political leadership is serious about taking the country and its people forward, it needs to make an honest attempt to resolve this issue, which is long term and corruption  free  politics.  Failing on this score could result in demographic dividend becoming a ticking bomb.

World’s two biggest countries and rising powers on both sides of the Himalayas seem to be competing with each other not only in economy and diplomacy but also in increasing their already burgeoning demography. The communist country of China which once ruthlessly implemented the one child policy is now offering various incentives, even loans for more babies to its youths but they are not willing even to marry. India once painted most of its walls and billboards with “One Child Enough,” and “We two our two” slogans has almost abandoned these campaigns. It seems history has come to a full circle for both.

There is one diplomatic angle to this so-called competition. India’s claim to the Permanent Seat in the UN Security Council will be strengthened as the most populous country in the world with the largest democracy. Here again China, who is already a member, is opposing it tooth and nail. It is again a travesty of history that it was India which had forcefully supported China’s membership in the highest body at the international level.