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Demographic dividend? Jobs 'elude' youth as 55-60 lakh enter labour market each year

By Balwant Singh Mehta, Apoorva Gupta, Anshula Mehta* 
The World Population Day is celebrated on July 11 each year to highlight the challenges and opportunities of increasing population. In this context, to check the reality of much debated topic of ‘Demographic Divided’ in India is warranted. India’s demography has been a major talking point in the policy circles, international and national level conferences and summits.
For a significant period of time, the country’s ever-increasing population numbers were a source of alarm for many. But since the last decade, keen attention has been drawn towards the utilisation of the country’s augmenting youth population which can potentially set India on path of economic progress.
Today, India is one of the youngest countries in the world with an average age of 29 years. It is the home of highest number of youths in the world, which constitutes around 28% of country’s population. While the number of elderly people is increasing steadily in most of the countries in the world particularly in developed world, the young population (15-29 years of age group) and working population (15 to 59 years of age group) in India is growing steadily.
The working population of India stands at around 64 per cent of the total population in 2017-18 and in the next decade it is estimated to reach to the highest level of about 66 per cent. Hence, in the coming time it will be a great opportunity to harness country's 'demographic dividend'.
The demographic dividend occurs when the share of working people (15-59 years) including youth (15-29 years) in the total population is high and increasing, and as a result more people have the potential to be productive and contribute to the national income, saving, per capital income and growth of the economy.
The literature also suggests that realisation of demographic dividend will result in acceleration of growth and prosperity in the economy. The case of East Asian economies has been quoted time and again as an example to support this argument, where countries such as Japan, South Korea, Singapore and Thailand have experienced high levels of industrialisation and urbanisation in the last four decades of the 20th century.
However, the United Nations Population Fund’s (UNPF) study has highlighted that India will witness a long duration of demographic dividend starting from 2005-06 and last till 2055-56. But, the ‘boom’ of ‘Demographic Dividend’ is expected to remain for the only in select states in different phases due to their varied population structures wherein the Total Fertility Rate (TFR) is a key indicator of population growth.
For instance, the 2017 Sample Registration Survey Report (SRS) shows that all the southern and many western states have already below 2.1 TFR, which is the tipping point wherein population replaces itself. On the other hand, the undeveloped states such as Jharkhand, Chhattisgarh, Madhya Pradesh, Rajasthan, Uttar Pradesh and Bihar, the TFR is still higher than 2.5.
The UNPF study also confirm that the opportunities for 'demographic dividend' have been close in all the southern and western states like Kerala, Tamil Nadu, Delhi, Andhra Pradesh, Telangana, Gujarat, Punjab and West Bengal and Karnataka, while in states like Odisha, Himachal Pradesh, Maharashtra, Jammu and Kashmir, Assam, Uttarakhand and Haryana will be closed in the next few years.
On the other hand, this is expected to be seen mainly in only few under-developed states such as Jharkhand, Chhattisgarh, Madhya Pradesh, Rajasthan, Uttar Pradesh and Bihar.
For the youth (15-29 years), a more serious concern is the increasing joblessness among educated youth, which went up nearly three times from 6.1% in 2011-12 to 17.8% in 2017-18. In particular, highly educated youth such as post–graduates (36.2%) and graduates (35.2%) have highest unemployment rate.
Thomas Malthus
Though a paradoxical situation exists in the country wherein despite the abundance of human capital, on one hand, industries report that they are unable to fill vacancies due to lack of skilled workers, on the other hand, there is huge unemployment problem among highly educated people. This is a two-way problem of employment and employability.
An immense challenge which lies ahead is of educating and providing skill training, generating employment for millions entering the job market every year and bringing females into the scope of formal labour force.
If gap between population and resources increases, in long run it may lead to poverty and inequality, a Malthusian catastrophe
The government has made considerable efforts to provide adequate employment opportunities through several livelihood and welfare schemes such as National Rural and Urban Livelihood Mission, Mahatma Gandhi National Rural Employment Guarantee Scheme, Startup Village Entrepreneurship Program, Johor, Employment Fair and schemes by Government of India – start-up, stand-up, Mudra, National Skills Mission and others.
As per the economic survey, 2019-10 stated that 2.62 crore new regular wage category jobs have been created between 2011-12 and 2017-18. Around 69 lakh candidates were trained under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) as in November 2019.
However, the job creation is far less than the target of roughly 55-60 lakh people who are entering into the labour force every year. In addition, a large number of youths those who are trained under various skilled development programmes are still unemployed or engaged in menial jobs.
Additionally, amidst the economic setbacks suffered due to Covid-19, the plight of those entering the labour market this year is especially concerning. Many are opting for jobs in the informal sector wherein they are deprived of benefits entrenched in social protection provisions and heighten their vulnerabilities as workers as over 90% of the workforce engaged in informal employment without any social security benefits.
Further, the growing number of youths not in employment, education and training (NEET) is also posing a serious challenge of harnessing the opportunity of demographic dividend, as number of youths in NEET category has increased from 70 million in 2004-05, to 116 million in 2017-18.
The end result is high number of unemployed and youth under NEET category, and increase in share of the people who are not working and are dependent on the working population. This is increasing the economic insecurity of the dependent in many working populations of families such as the elderly and children.
In the last two decades period the average economic growth rate of the country has been decent but the country enables to create enough new employment opportunities for the growing number of youths. This increasing number of idle youths would not only lead to the economic loss for the country but also result a disastrous social consequence in the future.
In sum, the ‘demographic dividend’ is a limited time opportunity. If appropriate steps will not be initiated in time by the select states, then this ‘demographic dividend’ will turn into a disaster. This we have experienced during the lockdown period of ongoing Covid-19 pandemic, when a large number of youths have returned to their native places with so many difficulties mostly belonged to only those states such as Uttar Pradesh, Bihar, and Jharkhand where the demographic dividend window is expected to open for the next few decades.
It primarily depends on how the government prepares its young population for the future. Acting upon the comprehensive welfare of our population and family planning measures will be non-negotiable for achieving our vision of ‘New India’ and ‘Atmanirbhar Bharat’.
According to Thomas Malthus, a renowned economist and demographer, if adequate supply of resources has not been done for the growing population, the gap between the population and the resources will increase in the long run and this may lead to poverty and inequality in the region, also known as ‘Malthusian catastrophe'.
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*Prof Balwant Singh Mehta is Research Director (H), Impact and Policy Research Institute (IMPRI), New Delhi, and Senior Fellow, Institute for Human Development (IHD); Apoorva Gupta is Research Assistant, IHD, Delhi; and, Anshula Mehta is Senior Research Assistant, IMPRI

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