India’s Population: Explosion and Demographic Dividend

Recently, my friend Bhaswati Mukherjee, the Indian Ambassador to the Netherlands, sent me a copy of a speech she made.   “You may find it of interest,” she wrote. I did.

Bhaswati and I are old friends; we  were at school and college together. Back then, there was only one way to think about population in India. It was a problem. Modern medicine and the end of famines meant death rates fell, but everyone still had a lot of babies. Population grew at over 2% per year. We learned the theory of demographic transition: That economic growth would slow population growth, and until that kicked in, the population would just keep expanding. Economic growth was half-swallowed by the needs of a growing population. It was difficult to see how the second part of the transition — where birth rates fell in harmony with falling mortality — was going to happen. India’s government pushed for “family planning” — encouraging people to have only 2 or 3 children rather than the 7-9 or more they might have otherwise.

(The graph above is from UWC- Marathon’s Keith Montgomery.)

During the Emergency, India’s brief fall from democracy, the late Sanjay Gandhi earned himself a terrible reputation — in part because of allegations of forcible sterilization. He set aggressive targets for field workers, who rounded up men and had them vasectomized, apparently in some cases without their consent. After the Emergency, the whole thing became a politically tender sore spot.

Population growth was politicized in other ways. I’ve heard Hindus blame Muslims because Indian Muslims are allowed four wives. “Naturally they have more children if they’re polygamous,” one such person argued. “A man can have 3 or 4 children by each of his wives.” Clearly the speaker was no demographer. The constraint on population growth isn’t the average reproductive capacity of the man. It’s the average number of children borne by each woman that counts. Since the wives must share the attentions and purse of one man, polygamy could actually reduce this average. (The wives are seldom wage-earners in this scenario.)

My kid drew this chart for a school project in 1994. India’s rapid population growth, that tripled the population between 1926 and 1985, was still considered a problem.

THE DEMOGRAPHIC DIVIDEND

But that’s all moot now. India is instead talking of the Demographic Dividend. In a world where the developed countries all have low reproductive rates and aging populations; where India’s big competitor, China, implemented a one-child policy just long ago enough that these only children are today’s adults; in such a world, India is the only major country with a young population. A young population means workers and consumers. Energy. Instead of being a liability, it’s a selling point. From her speech:

“India will be the largest contributor to the world’s workforce — all 136 million people — over the next 10 years (fully a quarter of the entire world’s additional workforce). According to projections, the demographic dividend will spur the rise of middle class population to half a billion people over the next two decades. “

WHAT CHANGED?

It isn’t just India that changed in the 30+ years since I studied about demographic transition. It’s the world. The tidy theory I learned was that after the population bulge, birth rates would fall and then population would stabilize at the new level, and everyone would live long happy lives in a world that was again in balance.

But what we’ve seen is that it doesn’t stabilize at the new level. People don’t have babies to improve their nation’s demographics. Instead of 7-9 babies or 2-3 babies, people have 0 or 1.The birth rate falls some more, until it goes below the replacement rate. That’s what happened in Japan and across much of Europe. It may be what’s happening in China; will the state-imposed one-child policy prove addictive once it’s lifted? Will people have gotten out of the habit of having larger families? Will the social support structures for child-rearing have attenuated?

Demographic transition with Stage 5

Source: Wikipedia

Here’s the demographic transition graph, with an addendum, from Wikipedia. It adds a fifth stage: A falling population. What lies beyond? We don’t know, really. Will birth rates pick up again? Will having more babies become fashionable and economically attractive? Will population gradually fall to pre-industrial levels? No telling. It’s the world our grandchildren and their heirs will live in.

But meanwhile, for another two or three decades, there’s the Demographic Dividend for India…

…where its huge young  population, juxtaposed with India’s political and economic structure, its democratically elected pluralistic Governments and its rising economic and entrepreneurship strength demonstrates a new reality – That if India’s economy, with its young population, grows as it is growing now, it will change the world.

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About webmaster

I'm an international Business Consultant; author of a book called India Business Checklists, and working on a book on doing business in Burma.
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4 Responses to India’s Population: Explosion and Demographic Dividend

  1. vinty says:

    The demographic dividend may look pretty good now. But wait another 10 years or 20 years and see what happens. India simply cannot handle more people. The country is running out of agricultural land, cities are bursting at their seams (Delhi with 18 million? Who would have thought?) the environmental degradation is unbelievable. And, the country faces an acute water shortage.

  2. Sujata Madhok says:

    I’m not all that sure about this demographic dividend notion that the Indian government is hardselling. Currently, we have huge unemployment, so we have a frustrated young population and there is no serious effort to provide education/skills/jobs. True the economy is growing but this is jobless growth. Apart from the big rural employment scheme NREGS (which offers a maximum of 100 days’ work per rural household in a year) there is no attempt to tackle the unemployment problem. Most of the growth is capital intensive not labour intensive. I don’t see this changing in the next few years. Basically because the politicians and bureaucrats and industry don’t give a damn.

    • webmaster says:

      Hi Sujata!

      I think what it is is not exactly “jobless growth” but certainly growth that favors urban/ educated/ youthful jobseekers. Back in 2008 when I was researching my book, I kept hearing about “a shortage of people in every skill-set” and employee turnover rates of over 20% per year. This was *so* different from even ten years earlier. Now it may have dialled back a bit, but it’s still true there’s much more job growth in the cities than there was before this whole thing started. The rural areas… that’s different. It may be that costs of growth are being shifted on to them, so there are conflicts over land and water without employment becoming available.

  3. Pingback: India’s Population, the Decennial Census, and me | Rupa Bose's Blog

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