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Benefits of Demographic dividend

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April 25, 2023

Why in news?

India becoming the most populous country can bring more boom than bane.

What are the advantages of India’s population structure?

  • Total fertility rate of 2.0 - Indicates that India is moving towards the population stabilization.
  • Worldwide market - India has the potential to become a worldwide market for both production and consumption.
  • Cheaper workforce - Can lower the manufacturing cost and be a leverage to make India, a worldwide manufacturing market hub.
  • Demographic dividend - With 68% of the working age population in 2023, India continues to have a demographic window of opportunity for the next 35 years.

How can India translate demographic dividend to economic dividend?

  • Employment or job creation - If India can generate sufficient and quality jobs for its working age population, realization of demographic dividend will become a reality.
  • Education and skills - Skilled and educated workforce is critical for better productivity of any economic activity.
  • Healthy environment - Skilled and healthy workforce reduces excessive public spending on health and helps in greater capital creation.
  • Good governance - Good governance being transparent creates a healthy environment which will increase the efficiency and productivity of the population.

What are the challenges to Indian demographic dividend?

  • Stereotypes – Existence of gender stereotypes binding women to household works.
  • IT sector – Even though India is doing well at software outsourcing the share of population is very low.
  • The rise of Artificial Intelligence may be a hindrance to the boomed IT industry replacing jobs like coders.
  • Skilled labor – The number of people skilled in information and communication technology is abysmally low.
  • Census – Absence of the Census 2021 to know the absolute changes in the demographic dividend.

What is the need of the hour?

  • Policies that can provide high-quality education, good health care, respectable employment opportunities, good infrastructure, and gender empowerment.
  • India’s young population needs to be nurtured and transformed into being productive and well-paying jobs.

Quick facts

Carrying Capacity

  • Carrying capacity is a dynamic concept which changes according to changing technology, the efficiency of production and consumption systems of a country.
  • Carrying capacity of an environment is the maximum population size of a biological species that can be sustained by that specific environment, given the food, water and other resources available.


  1. The Hindu│ Advantages Of Indian Population Structure
  2. The Print│ Challenges To Demographic Dividend
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