India's young population and related issues

Three is such a good number so with this third post I end my rather random but educative (at least for myself:)) "series" of posts about India, and what better place to end than the demographics of this huge country (Wikipedia) ? Recently, we have been indulging ourselves on the demographics of China over at Demography.Matters invoking the well-known question of whether China will grow old before it grows rich? Our conclusion ? Well, as Randy McDonald aptly puts it:

"(...) on the basis of the statistical data most readily at hand, China might indeed be able to get rich before it grows especially old. It might not; but at this point, it's frustratingly still too early to say."

In India'a case, as in all cases, we should be careful about making too many long term projections but the comparison with China is still strikingly telling.

(from The Boston Globe - Young India hopes to reap population boom benefits)

"Some experts predict population growth could turn out to be a boon to the economy, one of the fastest growing in the world. Since half of India's population is younger than 25, it gives the country a potential edge over China, where an aging population -- the result of a one-child policy -- could slow its economy by 2030, they said.

"It is an advantage for India now because the country is entering the demographic dividend phase while China is exiting it," said Bikram Sen, a former Indian census director. Demographic dividend refers to a period -- usually 20 to 30 years -- when a greater proportion of people are working, which cuts spending on dependants, aiding economic growth."

However underneath this rosy outlook for India epitomizing the country's ability to surpass China on the back of a younger population lies some difficulties; most notable the task to actually benefit from and essentially cope with the young and growing population

There is a catch however.

"Whether India can benefit from its young population will depend on economic development and equitable social development," said A. R. Nanda, executive director of the Population Foundation of India, a research agency.

Moreover demographic imbalances in India creates large regional growth disparities as well as risks of political and social tensions and upheavel. 

India's last census in 2001 revealed a sharp demographic divide between poorer northern states and economically advanced southern states, where there has been a sharp decrease in the rate of population growth in the last decade.

Experts say the demographic imbalances could fan regional tensions as people move from the poorer heavily populated areas to richer southern India. Imbalances could also fan political tensions. Last year, a leading Hindu hard-liner angered women and Muslims by pressing Hindus to have as many children as possible to avoid being swamped by Muslims.

Incidentally, I also think that regional disparities can be linked with issues of the old but still lingering Indian caste system which highlists the Indian population's diversity albeit in a negative and counterproductive frame. Scrutinizing this issue even further professors Abhijit Banerjee and Lakshmi Iyer relates the divergence in economic productivity in different regions to the legacy of the British Empire's colonial land revenue insitutions

Moving back on track with the catch of India's young population two articles from the FT also gives food for thought ...

Battle lines form over Indian jobs boost plan

"The ADB’s call for governments urgently to adopt policies that foster more inclusive economic growth, or risk social crisis, comes at a particularly sensitive time in India.

The private sector is under intense pressure from the government to adopt more progressive recruitment policies towards socially disadvantaged groups: failure could result in caste quotas being imposed by administrative fiat. The outcome of the battle will have important ramifications for all doing business there."

Asia faces job crisis that could hit growth 

Asia is heading towards an employment crisis that could lead to social breakdown and a rapid collapse in growth rates, the Asian Development Bank has warned.

“The outlines of an Asian employment crisis are already taking shape,” Ifzal Ali, the ADB’s chief economist, said in New Delhi. “Strong economic growth alone will not solve the [region’s] problem.”


“In India, for example, we could step back from 7-8 per cent growth to 3-4 per cent growth very easily within five to six years if unemployment and underemployment is not addressed,” Mr Ali said at the launch of an ADB study of Asian labour markets.

Ending my post I will point to blogroll which features some interesting blogs and ressources if you want to read more about India.

Suhit Anantula - MBA in Australia and his "places on the Web"

The Indian Economy blog

Atanu Dey on India's development.