GS Mains Model Question & Answer: How can India use its demographic dividend for its development and also examine the challenges involved?

GS Mains Model Question & Answer: How can India use its demographic dividend for its development and also examine the challenges involved?

Q. How can India use its demographic dividend for its development and also examine the challenges involved? (12.5 Marks)

(General Studies Mains Paper III- Economy: Indian Economy and issues relating to planning)

Model Answer :

India is presently in the early part of its demographic dividend. However, unless lessons are learnt from other parts of the world, and adequate measures are taken both at the ground and policy levels, it is possible that India will be unable to reap its demographic dividend, and may in fact jeopardize its future as a result of inadequate action.

The “demographic dividend” accounts for India having world’s youngest work force with a median age way below that of China and OECD Countries. Alongside this window of opportunity for India, the global economy is expected to witness a skilled man power shortage to the extent of around 56 million by 2020. Thus, the “demographic dividend” in India needs to be exploited not only to expand the production possibility frontier but also to meet the skilled manpower requirements of in India and abroad.

To reap the benefits of “demographic dividend”, the Eleventh Five Year Plan had favored the creation of a comprehensive National Skill Development Mission. As a result, a “Coordinated Action on Skill Development” with three-tier institutional structure consisting of (i) PM’s National Council (ii) National Skill Development Coordination Board (NSDCB), (iii) National Skill Development Corporation (NSDC) was created in early 2008.

Whereas, Prime Minister’s National Council on Skill Development has spelt out policy advice, and direction in the form of “Core Principles” and has given a Vision to create 500 million skilled people by 2022 through skill systems (which must have high degree of inclusivity),

NSDCB has taken upon itself the task of coordinating the skill development efforts of a large number of Central Ministries/Departments and States.

The NSDC has geared itself for preparing comprehensive action plans and activities which would promote PPP models of financing skill development.

The three-tier structure has laid the institutional foundations for a more proactive role of public (Centre plus States) and private and third sector interactions and interfaces for harnessing the benefits of demographic dividend. It has also been able to focus on skill development through the creation of a coordinating mechanism. It has also made the issue of skill development as an important agenda for the Governments at Centre as well as States. It has articulated the importance of State Governments in the delivery of skill development.


In this regard, various challenges on skill development that merit attention in the remaining years of the current Plan and the Twelfth Five Year Plan are presented below:

1) Government’s preoccupation with providing and financing training has led to overlook its role in one key area- disseminating information about the availability and effectiveness of training programs.

2) Whilst industry associations and individual employers are beginning to show interest involving themselves in the development and management of the ITIs, their involvement in the vocational training system is still at a nascent stage.

3) The management of the Vocational Education and Training System is fragmented and shared between various institutions, especially the NCVT, DGET and the SCVTs. There is a lot of scope to improve coordination between them and improve their effectiveness through more functional partnerships.

4) There is a need to identify institutions to carry out impact evaluation studies/ tracer studies/ surveys of graduates from vocational institutes on a regular basis.

5) Since funding is largely restricted to publicly provided training, little attention is paid to financing as an innovative means to encourage good quality public / private / in-service training.

6) Vocational training institutes should be given greater freedom in terms of resource generation (sale of production or service activities, consultancy) and in utilizing the proceeds for not only cost recovery but also incentivizing those who generate revenues.


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