Is India’s young population a time-bomb waiting to explode?
One of the strongest theme in the narrative about India’s potential as a “superpower” is its youthful demographics (almost half of the population under the age of 25). Like many of us, I too have been guilty of publicly trumpeting this factor – and mentioning this as one of the reasons why this century can be an “Indian century“.
But last week I stumbled on Prof Kartik Hosanagar’s article on this topic…and that gave me cause to re-think. Here is Prof Hosanagar – in his own words (emphasis mine):
This (India’s demographic dividend) sounds great in theory. And in fact, there is ample evidence that in the past, several countries have witnessed periods of increased productivity and savings during periods in which they have enjoyed a demographic dividend. But all this assumes that this young and upcoming workforce can be trained and meaningfully employed. In India, that is a big if.
Here is why:
India still has the world’s largest number of illiterates at over 250 million. Although more and more jobs are being created thanks to the economic boom, the gap between the haves and have-nots seems to be increasing. I shudder to think what might happen if we have a sudden influx of large numbers of unemployed and disgruntled youth.
…Not only does India need to train and employ many orders of magnitude more people but it has also to start from a worse initial position in terms of existing educational infrastructure. We will need a massive infrastructure of universities and vocational training institutes spanning the country, including its rural interiors.
…
The conversation with Mr. Sibal reminded me of the obvious challenges ahead. But it was Mr. Vijay Mahajan, the founder of the microfinance company BASIX, who perhaps best drove home the significance of the issue. He worries that all the recent growth, while very welcome, has unfortunately not been inclusive. He believes that people increasingly have high aspirations, driven by the influence of media, but limited potential to achieve those aspirations. With limited access to quality education and employment, most of the youth will enter the labor force at the lowest levels. The frustration feeds into movements like Naxalism and even manifests itself in the form of violence based on religion or regionalism.
Now, Prof Hosanagar is not a Doomsday Pundit…
I do not wish to sound like the grim reaper. My point is not that India faces doom. Rather, I agree that a rosy future awaits India. But this future cannot be taken for granted…
As I mentioned before, I have been as guilty as many others of highlighting the demographic advantage…but I will repeat the caveat I usually put in at the end, which is:
A youthful population is an asset only if it is healthy – and it is educated (read skilled). Otherwise it can be a massive force of social disruption…
Dis-satisfied young populations – as many of you know – can be easily swayed be rhetoric and can be emotionally aroused without much effort. They can also be “primed” relatively easily to create extreme social unrest – and potentially even trigger civil wars…
So next time someone says “Demographic Dividend”, let us just pause for a moment and think how we can ensure that the demographic dividend does not turn out to be a liability..and let us try to make sure we are not sitting on a demographic time-bomb. Comments and thoughts welcome, as always.
Additional Reading: Population Age Structure and Its Relation to Civil Conflict: A Graphic Metric from which this brief, somewhat worrying excerpt:
About 86 percent of all countries that experienced a new outbreak of civil conflict had age structures with 60 percent or more of the population younger than 30 years of age.
Somewhat related post: This weekend, worrying about Assam
Map of Global Median Age, courtesy CIA Factbook via Wikipedia
Also Read: The Coming Jobs War and my own tiny effort…Â
Thanks for sharing a valuable article Shantanu. Replying in jiffy will revert later. Just a quick observation and I always feel (which is not a great feeling at all), we are moving towards a CIVIL WAR/REVOLUTION SITUATION SLOWLY BUT SURELY.
Dear Shantanu
It is not population structure but policy that makes nations. There is no direct causality. Some random correlations may exist, but they prove nothing. The Russian Revolution, for instance, cannot be explained by population structure but by Lenin. And US was a very young nation after World War II (baby boom) but did not face social unrest – instead, it boomed economically.
Let’s not worry about irrelevant policy variables like population structure and focus on the need to resolve India’s problems through good governance. Revolution will occur from governance failures, not population structure issues.
Regards
Sanjeev
Agree totally that demographic dividend cannot be obtained without a healthy and educated indian population.One can see so much of unrest among youth who have formed various groups to fight out various different issues being faced by them. A totally irresponsible government and a lethargic judiciary will certainly fuel the civilians towards a civil war.
Good post, it is highly critical to train the youth & guide them into professions. The divide of haves n have nots have grown to extreme level, as Prof.Hosnagar points out this would stem frustration in youth. We are already experiencing this in few pockets, where youth are taking to fundamentalism/Naxalism as a solution for their aspirations. There huge population under employed youth, whose grudge towards the nation & its governance might be a danger. Aspirations & expectation have grown manifolds in the last decade with IT, service, financial sector booms & with consumerism centric business models they find it very difficult to balance their lively hood. The need of the hour is to counsel, educate, train youths on various vocations & to guide them towards empowering others in their realm. Jai Hind..Vande Mataram
Thought provoking post. I fully agree with the professors apprehension. Way out is inclusive growth based on indegenous ideology & technology. Growth that we are witnessing is based on BPO’s, Medical transcriptionists, software servicing and ancillary industries like travel & hospitality. These are associated spiralling incidence of alcoholism, high degree of personal indulgence, divorces etc apart from leaving out the vast majority of the country from the benefits of this pseudo growth. Another pernicious aspect of this so called growth is rapid increase of real estate business leading to vast areas of agriculture land being applied for commercial purposes & crops. This is leading to unacceptable increase in basic essentials of life like food. Add to this the all pervasive corruption. If one dispassionately looks at it, one cannot but agree with the learned professor.
I am calling this growth as psuedo & pernicious because this has no strategic direction or sense and is bereft of the wisdom that amde this land & civilization the richest in the world till the British plundered us. I am afraid, we are falling prey to the colonial players once again.
It is good to see a discussion on this issue.
How do we gainfully employ the huge Indian working age population? With modern farming and manufacturing techniques, those sectors will only employ a small fraction. Ditto government jobs. IT services for West is a candle that will soon burn out. IT sector employs a very small fraction anyway. Still, the money earned by our quality IT service companies has got the economy moving. The momentum must be maintained by improving domestic services.
To improve legal employment opportunities, India should legalise gambling. It should also undertake a massive exercise of identifying national and regional historical locations and monuments and create tourism infrastructure. Thousands of students should be trained in history and geography, arts and culture, and Indian languages. We must enforce 3-language formula. There are many possibilities, however, there are many obstacles, too. History is corrupted by political interests. Gambling is anathema to ivory tower moralists. Culture is a no-no for religious zealots from West who have money and power to stop developments in that area…
It isn’t easy.
Very thought provoking. I think there is huge opportunity for private sector to play a role in this sector.
Anupam
I read this discussion thread the other day and I came back to post this link to a video the International Monetary Fund just released. It’s called “India: The Road Ahead” http://www.youtube.com/watch?v=UGwUrINfpS4
Very interesting insight into India’s economy and near-term future.
From Cheap tablet, unaffordable mistake by Nitin Pai (emphasis added):
…
The matter is so serious that mincing words is the irresponsible thing to do. There is a demographic bulge on the horizon and two crucial areas will determine whether that bulge will result in a demographic dividend or severe demographic discount. The first is whether the 30 million children born every year will be educated and skilled enough to be productive members of modern society. The second is whether the Indian economy will generate enough jobs to provide them with adequate livelihoods. The median age in India is around 26 today, which means half the population is under that age.
The general shortage of skilled manpower in everything from the armed forces to IT companies to cafe chains indicates that a substantial fraction of this population is not employable—because of the failure of India’s education system.
Unless something is done ten years ago, the demographic dividend will be diluted. Unless something is done now, the demographic dividend will be wiped away, leaving India with a demographic discount.
As before, people will call it the “problem of overpopulation†instead of calling it by its real name—the problem of under- and misgovernance. Government exists to ensure the well-being of all its people. It is perverse to contend that population must be controlled because the government is incapable of serving it. It is the government that must boost its competence to ensure that it can perform its functions satisfactorily regardless of how big or small the population is.
In India’s case, the traditional and massively failed approach is to treat both education and jobs as if they were contagious diseases: insulated behind high walls, preventing ordinary people from having easy access to them. The government has failed to deliver education and jobs. So after over sixty years of failure, it’s time to try a different approach. Liberalise education (and labour) and let the solution begin to scale at the same pace as the problem. (See Ajay Shah’s article in this month’s Pragati)
The UPA government’s right to education act is not the answer, although some may claim it’s an improvement over the past. Instead of liberalising education so that the private sector can deliver education at prices and qualities that the people want, the UPA government has placed the entire education sector under the thrall of the Delhi Straitjacket. Disguising a bad policy—which is bound to increase corruption in society—in the language of “rights†may be increase the feel-good factor among sections of the public, but we are still moving in the wrong direction.
Why is all this relevant to a discussion on a cheap tablet computer? To show how deeply wrong Kapil Sibal’s priorities are. First, instead of working on a war-footing to work out how to strengthen the delivery of primary and secondary education, Mr Sibal is focused on the higher education sector. The clever excuse might be that primary education is a state subject. That still doesn’t mean tilting at the windmills of higher education at the expense of the taxpayer. The education cess imposed on transactions is grotesque—what does the government do with its ordinary tax revenues that it has to collect more money, ostensibly to improve education, but then subsidise fast depreciating assets solving a non-existent problem?
The Economic Survey repeats what I said above re. the demograohic dividend being a boon only if the young are healthy, educated and skilled….
From India to join league of youngest nations by 2020…
…India is passing through a phase of unprecedented demographic changes, where in proportion of working age population (15-59 years) is likely to rise from around 58 per cent in 2001 to over 64 per cent by 2021, said the pre-budget report card on the state of economy.
…
This ‘demographic dividend’ provides India great opportunities, but also poses a great challenge, the Survey said, while noting that the average Indian will be only 29 years old in 2020.
The comparative figures for China and the US are 37 years, while it is 45 years for West Europe and 48 for Japan.
These demographic changes are likely to contribute to a substantially increased labour force in the country, the Survey said this demographic change will only benefit India, if our population is “healthy, educated, and appropriately skilled”.
From The Budget: Criminal Folly by RightWingIndian:
…India can encash its demographic dividend, given the fact that its average age is just 26.2.
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First let’s get a sense of the “economic development clock†that we need to be conscious of. By 2030, it is estimated that two changes will happen, our average age will touch 35, and the number of people who are retired (above 60) will be more than the number of people who are in the labour pool (which means a lesser number of people will be working to support a larger number of retirees, which is the problem that Europe and Japan are facing today). This is when the demographic dividend can turn into a demographic curse!
The only way to avoid this is if we can become a middle income country by that time (which at today’s prices means a per capita income of between USD 4,000 – 10,000). We are currently at a per capita income of around USD 1,000. To have any chance of reaching this middle income stage by 2030, we need a consistent GDP growth of 10% or higher, every year, from the current year onwards!…
India’s youthful population can be viewed as a double-edged sword – capable of bringing great benefit to the country in the decades ahead, but with extensive demands that, under current economic conditions, the country looks unable to fulfill.
A recent IMF report suggests that India’s demographic dividend alone could contribute two percentage points to its annual G.D.P. growth for the next two decades, if the country adopts the right policies. A surge in the labor force with the right age structure, higher productivity due to urbanization, a low ratio of dependent people and an increased number of women joining the work force all add to this demographic dividend.
A 2010 Goldman Sachs paper projected that India’s industry would need to create nearly 40 million jobs by the end of this decade to absorb this huge increase in the labor force. Aided by the demographic dividend, India could clock economic growth of 7 to 9 percent until 2030, possibly wiping out absolute poverty as we know it today, though the poverty line would then be readjusted.
**
Some commentators now fear that India’s much touted demographic dividend is on the verge of going horribly wrong – that the economy may not produce enough jobs to absorb the fast-growing labor force, leaving millions of young people feeling bitter and betrayed.
http://india.blogs.nytimes.com/2012/08/27/is-a-youth-revolution-brewing-in-india/