Can India reap benefits of its demographic dividend?

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Manish Shah is the former president of Midwest Law Printing in Chicago. He also worked at Intel, PwC and Motorola. He has an MBA from Kellogg Graduate School of Management, and a MS in Computer Science from Illinois Institute of Technology. He can be reached at manishshahus@yahoo.com.

By Manish Shah
When the number of people eligible to be part of a labor force (usually ages 15-64) are a disproportionately high percentage of a country’s population, the country benefits. David Bloom of Harvard School of Public Health calls this significant rise in working age population, a demographic dividend. The demographic dividend has been credited for the 19th century industrial revolution in England and for the explosive growth and prosperity in the US after World War II.

In 2020, the average age of Indian population will be 29 years, compared with 37 in the US and 48 in Japan. In addition, 7 out of 10 Indians will be of working age. Although the demographics work in India’s favor, the returns on demographic dividend are not guaranteed. India faces gargantuan challenges such as training the workforce, improving the education system, attracting capital to spur innovation and implementing policies that support global trade.

Education and training pose the biggest threat to realizing the demographic dividend. According to India’s Educa-tion Minister Kapil Sibal, 220 million kids go to school but only 12 percent of these kids make it to college. This is pale in comparison to the US, where 62 percent of kids attend college. India has 480 universities and 22,000 colleges. In the next decade, India will need 700 new universities and 35,000 new colleges. The government cannot accomplish this on its own and so the business community needs to step in and fund India’s education infrastructure.
India’s success will be measured by the extent its 800 million ordinary people benefit from the demographic dividend. Therefore, it is imperative that the government implement reforms while keeping the needs of the wider population front and center.

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