Demographic Dividend-What it is? How India can use Demographic Dividend? Challenges and Solution ( UPSC, PCS)
Q. How can India use its demographic dividend for its development and also examine the challenges involved? (200 words)
Answer-
Definition of Demographic Dividend:-
It refers to the growth in an economy that is the resultant effect of a change in the age structure of a country’s population. The change in age structure is typically brought on by a the decline in fertility and mortality rates.
Demographic dividend and India
India is presently in the early part of its demographic dividend. However, unless lessons are learnt from other parts of the world, and adequate measures are taken both at the ground and policy levels, it is possible that India will be unable to reap its demographic dividend, and may, in fact, jeopardize its future as a result of inadequate action.
The “demographic dividend” accounts for India having the world’s the youngest workforce with a median age way below that of China and OECD Countries. Alongside this window of opportunity for India, the global the economy is expected to witness a skilled manpower shortage to the extent of around 56 million by 2020. Thus, the “demographic dividend” in India needs to be exploited not only to expand the production possibility frontier but also to meet the skilled manpower requirements of in India and abroad.
To reap the benefits of “demographic dividend”, the Eleventh Five Year Plan had favoured the creation of a comprehensive National Skill Development Mission. As a result, a “Coordinated Action on Skill Development” with a three-tier institutional structure consisting of
(i) Prime Minister’s National Council on Skill Development has spelt out policy advice, and direction in the form of “Core Principles” and has given the Vision to create 500 million skilled people by 2022 through skill systems (which must have a high degree of inclusivity),
(ii) National Skill Development Coordination Board (NSDCB) has taken upon itself the task of coordinating the skill development efforts of a a large number of Central Ministries/Departments and States.
(iii) National Skill Development Corporation (NSDC) has geared itself for preparing comprehensive action plans and activities which would promote PPP models of financing skill development.
The three-tier structure has laid the institutional foundations for a more proactive role of public (Centre plus states) and private and third sector interactions and interfaces for harnessing the benefits of demographic dividend. It has also been able to focus on skill development through the creation of a coordinating mechanism. It has also made the issue of skill development as an important agenda for the Governments at Centre as well as States. It has articulated the importance of State Governments in the delivery of skill development.
Challenges:-
In this regard, various challenges on skill development that merits attention in the remaining years of the current Plan and the Twelfth Five Year Plan are presented below:
1) Government’s preoccupation with providing and financing training has led to overlooking its role in one key area ie. disseminating information about the availability and effectiveness of training programs.
2) Whilst industry associations and individual employers are beginning to show interest involving themselves in the development and management of the ITIs, their involvement in the vocational training the system is still at a nascent stage.
3) The management of the Vocational Education and Training System is fragmented and shared between various institutions, especially the NCVT, DGET and the SCVTs. There is a lot of scopes to improve coordination between them and improve their effectiveness through more functional partnerships.
4) There is a need to identify institutions to carry out impact evaluation studies/ tracer studies/ surveys of graduates from vocational institutes on a regular basis.
5) Since funding is largely restricted to publicly provided training, little attention is paid to financing as an innovative means to encourage good quality public/private/ in-service training.
6) Vocational training institutes should be given greater freedom in terms of resource generation (sale of production or service activities, consultancy) and in utilizing the proceeds for not only cost recovery but also incentivizing those who generate revenues.
Way Forward:-
If you have any query or anything extra information to be added, please feel free to comment in the comment section.
Links to be referred:-
1. https://www.investopedia.com/terms/d/demographic-dividend.asp
2. https://economictimes.indiatimes.com/news/economy/indicators/india-enters-37-year-period-of-demographic-dividend/articleshow/70324782.cms
3. https://www.livemint.com/Opinion/zgCdZ3GrDwtDpQWD95HenO/Opinion--Indias-demographic-dividend-will-play-out-over-a.html
Cheers !!
Answer-
Definition of Demographic Dividend:-
It refers to the growth in an economy that is the resultant effect of a change in the age structure of a country’s population. The change in age structure is typically brought on by a the decline in fertility and mortality rates.
Demographic dividend and India
India is presently in the early part of its demographic dividend. However, unless lessons are learnt from other parts of the world, and adequate measures are taken both at the ground and policy levels, it is possible that India will be unable to reap its demographic dividend, and may, in fact, jeopardize its future as a result of inadequate action.
The “demographic dividend” accounts for India having the world’s the youngest workforce with a median age way below that of China and OECD Countries. Alongside this window of opportunity for India, the global the economy is expected to witness a skilled manpower shortage to the extent of around 56 million by 2020. Thus, the “demographic dividend” in India needs to be exploited not only to expand the production possibility frontier but also to meet the skilled manpower requirements of in India and abroad.
To reap the benefits of “demographic dividend”, the Eleventh Five Year Plan had favoured the creation of a comprehensive National Skill Development Mission. As a result, a “Coordinated Action on Skill Development” with a three-tier institutional structure consisting of
(i) Prime Minister’s National Council on Skill Development has spelt out policy advice, and direction in the form of “Core Principles” and has given the Vision to create 500 million skilled people by 2022 through skill systems (which must have a high degree of inclusivity),
(ii) National Skill Development Coordination Board (NSDCB) has taken upon itself the task of coordinating the skill development efforts of a a large number of Central Ministries/Departments and States.
(iii) National Skill Development Corporation (NSDC) has geared itself for preparing comprehensive action plans and activities which would promote PPP models of financing skill development.
The three-tier structure has laid the institutional foundations for a more proactive role of public (Centre plus states) and private and third sector interactions and interfaces for harnessing the benefits of demographic dividend. It has also been able to focus on skill development through the creation of a coordinating mechanism. It has also made the issue of skill development as an important agenda for the Governments at Centre as well as States. It has articulated the importance of State Governments in the delivery of skill development.
Challenges:-
In this regard, various challenges on skill development that merits attention in the remaining years of the current Plan and the Twelfth Five Year Plan are presented below:
1) Government’s preoccupation with providing and financing training has led to overlooking its role in one key area ie. disseminating information about the availability and effectiveness of training programs.
2) Whilst industry associations and individual employers are beginning to show interest involving themselves in the development and management of the ITIs, their involvement in the vocational training the system is still at a nascent stage.
3) The management of the Vocational Education and Training System is fragmented and shared between various institutions, especially the NCVT, DGET and the SCVTs. There is a lot of scopes to improve coordination between them and improve their effectiveness through more functional partnerships.
4) There is a need to identify institutions to carry out impact evaluation studies/ tracer studies/ surveys of graduates from vocational institutes on a regular basis.
5) Since funding is largely restricted to publicly provided training, little attention is paid to financing as an innovative means to encourage good quality public/private/ in-service training.
6) Vocational training institutes should be given greater freedom in terms of resource generation (sale of production or service activities, consultancy) and in utilizing the proceeds for not only cost recovery but also incentivizing those who generate revenues.
Way Forward:-
- Proper dissemination of information about the benefits of training is required for this government need to popularise schemes like skill India mission, ustad scheme, etc
- Industrial associations and trade unions need to focus on providing vocational training to students pursuing diploma and degree courses so that their skills and industrial requirements can be matched.
- Coordination between vocational training institutes at the centre, state and district level needs to be established.
- Corporate funding to institutes would make them more independent and hence more efficient.
If you have any query or anything extra information to be added, please feel free to comment in the comment section.
Links to be referred:-
1. https://www.investopedia.com/terms/d/demographic-dividend.asp
2. https://economictimes.indiatimes.com/news/economy/indicators/india-enters-37-year-period-of-demographic-dividend/articleshow/70324782.cms
3. https://www.livemint.com/Opinion/zgCdZ3GrDwtDpQWD95HenO/Opinion--Indias-demographic-dividend-will-play-out-over-a.html
Cheers !!
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