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(GIST OF YOJANA) Reaping India’s Demographic Dividend

(DECEMBER-2024)

Reaping India’s Demographic Dividend

Introduction

India finds itself at a pivotal moment in its demographic evolution. The proportion of its working-age population (15-64 years) rose from 59% in 2011 to 63% in 2021 and is projected to remain stable over the forthcoming 15 years. Aspiring to transform into a $30 trillion economy by 2047, with a target of achieving an annual per capita income of $18,000, India faces the challenge of elevating real per capita income sixfold within the next 23 years. The labor force is integral to this initiative. Accelerated growth depends on equipping workers with enhanced skills and fostering competitive firms that connect with global markets.

Defining Employment

ILO Definition:

Current Weekly Status (CWS): “Did you work at least one hour in the prior week?”
Usual Status (US): “What were your primary and secondary jobs for more than six months in the past year?”

In the context of India, with a considerable segment of the workforce involved in crop agriculture, the usual status serves as a more accurate representation of employment patterns due to the seasonal nature of agricultural work.

Record of Employment

Key Data Points

Employment Opportunities: Over 8 crore jobs produced between 2017-18 and 2021-22. Average yearly job creation surpasses 2 crore.
Labor Force Participation Rate (LFPR): Rose from 57.9% (2022-23) to 60.1% (2023-24) for individuals aged 15 and older.
Worker Population Ratio (WPR): Enhanced from 56% to 60.1% during the same timeframe.

Reduction in Unemployment

Periodic labor force surveys (PLFS) suggest that employment openings have surged faster than the labor force, consistently lowering unemployment rates.

Structural Dimensions of Employment

Gradual Industrialization: Industrial growth has trailed behind demographic shifts. Nonetheless, recent decades have witnessed advancements in employment-to-population ratios.
Productivity and Real Wages: Real wages are associated with labor productivity, which relies on improved human capital (education, health, skills) and technology. Increasing incomes and job creation are vital for utilizing India’s human potential.

Labor Productivity

India’s productivity achievement reinforces its sustained growth of 6% over three decades. The Economic Survey 2023-24 emphasizes the necessity to generate 8 million yearly non-farm jobs to accommodate the expanding workforce.

Women and Youth

Female Workforce Participation: Elevated from 24.5% (2019) to 37% (2023), predominantly in agriculture and unpaid family work. ii. Boosting women’s participation is essential for inclusive growth.

Youth Employment

Youth unemployment decreased from 17.8% (2017-18) to 10% (2022-23).
However, tackling unemployment among first-time job seekers remains a hurdle.

Budgetary Support

The Union Budget comprises:

Employment incentives and skill development programs.
Initiatives for women-led progress, such as working women’s hostels, childcare facilities, and skill enhancement programs.

Challenges in Employment Generation Smallness of Firms

Indian firms are typically smaller, less efficient, and slower growing compared to their global counterparts.
Encouraging MSME growth is crucial for resilient economic recovery and job creation.
Informality in Employment: More than 90% of employment remains informal. ii. Strong wage growth, formalization strategies, and increased labor productivity are imperative.
Non-Farm Employment: Employment trends are disproportionately aligned with agriculture, which employs 46.6% of workers. Accelerating non-farm job generation is critical.

Role of States

States must address diverse demographic transitions. For instance, Bihar and Uttar Pradesh must concentrate on creating prospects for a burgeoning young population. Conversely, Kerala and Tamil Nadu require policies to support aging populations.
Integrated labor markets and provisions for internal migration are essential for balanced growth.

Conclusion

India stands at a distinctive threshold to harness its demographic dividend. With a significant working-age population, the potential for economic growth is substantial. Through targeted strategies and promoting collaboration between central and state authorities, India can convert its demographic promise into a $30 trillion economic reality by 2047, solidifying its status as a global frontrunner.