Here's an interesting commentary by Sudha Ramachandra about India's future prospects:
The populations of Europe and Japan are already graying, and the working-age populations of the United States and China are projected to shrink too in the next two decades. By 2020 the US will be short 17 million people of working age, China 10 million, Japan 9 million and Russia 6 million. However, India will have a surplus of 47 million people, giving the country a competitive edge in labor costs, which will be sustainable up to 2050, according to a study by Goldman Sachs.
Economists say India will catch up with the Chinese economy beginning in 2030, when the latter could cool off as the result of an aging population. "The window of opportunity offered by a population bulge has clearly opened for India," points out noted economist C P Chandrasekhar of Jawaharlal Nehru University in New Delhi. After decades of evoking despair, India's demographic profile is finally beginning to stir hope.
But not everyone views the population bulge with such optimism. Some analysts say it is not enough to have a young population. The working-age population needs to be healthy and literate.
India's score on this, while improving, is certainly not inspiring. About 50% of all Indian children are undernourished, a large percentage of them born with protein deficiency (which affects brain development and learning capacity, among other things). This is hardly the ideal foundation for a productive workforce, as the likelihood of a malnourished child growing up to be an able adult is rather dim.
There is also the question of whether the population has the skills and knowledge to take on India's future work. Literacy has improved dramatically over the years - just 14% of the population was literate in 1947 versus about 64.8% today - but many who are classified as literate can barely read or write. And 40% of those who enroll in primary schools drop out by age 10. The curriculum in the schools, especially the government-run ones, does not prepare the child for the domestic job market, let alone the global one. The huge "workforce" might not be qualified to do the work.
Moreover, India's rich and educated classes are preferring to have small families, so the additions to the population are coming largely from the poor, illiterate sections in society. Nicholas Eberstadt, who researches demographics at the Washington-based American Enterprise Institute, points out that while India's overall population profile will remain relatively youthful, "this is an arithmetic expression averaging diverse components of a vast nation. Closer examination reveals two demographically distinct Indias: the north that stays remarkably young over the next 20 years, and a south already graying rapidly due to low fertility."
Yet India's north is far more backward than the south. On almost every socio-economic indicator the north scores poorly. The young population that the country is setting its hopes on might not be qualified to take up the challenge.
There is a danger of India squandering its demographic edge if it does not act rapidly to invest in human capital. India's population policy - it was the first in the world to come out with one - has hitherto focused on population control. This was essential given the large population base and the high growth rate. Steps were taken to limit family size, and incentives were given to couples to adopt permanent birth-control measures.
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