India, a country with an already staggering population of 1.43 billion, is set to surpass China as the world’s most populous nation by April 2023. This significant demographic shift, while opening up numerous potential opportunities, also presents a series of formidable challenges for India to handle.
A Change in Global Demographic Dynamics
In 2022, China will see an absolute decline in its population for the first time. This population contraction is in stark contrast to India, where the population is projected to keep growing. The main drivers of these population shifts are changes in mortality and fertility rates.
In 1950, the Crude Death Rate (CDR) — an indicator that reflects the number of people perishing per year per 1,000 population — was similar for both China and India. However, these figures have dwindled drastically over the years, indicating better healthcare facilities and longer life spans for their citizens.
Tackling Fertility Rates
Another crucial factor influencing population growth is the Total Fertility Rate (TFR). TFR indicates the number of offspring an average woman will bear during her lifetime. For both India and China, this number has dramatically decreased since 1950. In India, the TFR has dropped from 5.7 in 1950 to 2 in 2021. Despite these reductions, populations can continue to grow if TFRs do not remain below replacement levels for extended periods.
Unpacking The Challenges Ahead
While having the world’s largest population could potentially bolster India’s standing on the global stage, it could also present a significant hurdle. Ensuring food security, providing adequate housing, access to education and healthcare services, and generating enough employment opportunities for its massive population is a colossal challenge.
Water scarcity is a chronic issue across India that needs to be urgently addressed. But the most critical task for India remains job creation. With 67% of the total population in the working age group of 15-64 as of 2020, this workforce is set to expand by an additional 100 million by 2030.
The Silver Lining: Opportunities Unleashed
Despite these challenges, the shift in demographic dynamics could unlock several opportunities for India. Its burgeoning population may bolster its claim for a permanent seat on the United Nations Security Council (UNSC). Large-scale fiscal resources can be directed towards investing in modern physical and human infrastructure, thereby driving economic sustainability.
With more than 65% of the working-age population, India has the potential to rise as an economic powerhouse, providing more than half of Asia’s potential workforce in the coming decades. This increase in the labour force and women’s workforce could significantly enhance the economy’s productivity.
Plotting the Strategy for India’s Mass Prosperity
India should focus on strategic initiatives such as skill development, boosting formal employment and significantly investing in education to reap the full benefits of its demographic dividend. The country needs to generate around 12 million non-farm jobs annually starting from 2023, three times the four million jobs created annually between 2012 and 2018. To accommodate this influx of youth into the workforce, India requires a robust growth rate of 10% per annum.
A significant qualitative shift has already been witnessed in the past few years, marking a transition from low-skilled, informal employment in Gulf countries to high-skilled formal jobs in high-income countries. The foreign exchange remittances from this overseas population are bountiful, suggesting that the key to mass prosperity lies in enhancing human capital and boosting formal job opportunities.
While India stands on the brink of a significant demographic shift, it needs to strategically navigate the challenges and opportunities this change presents. By focusing on human capital, job creation, and education, India has the potential to turn its demographic dividend into a force for economic transformation.
