Maladies and remedies

As the United Nations’ world population dashboard placed India as the most populous country in the world, the classic conundrum once again set in — whether population is a boon or a bane? As a matter of fact, India’s estimated population at 142.86 crore stands marginally above the projection for China at 142.57 crore. One would agree, there is no absolute answer to the abovementioned conundrum. The direction in which India’s increasing population, characterised by a rich demographic dividend, will take the country’s economy, depends upon a range of factors. For a greater part of the post-independence era, the surge in population was seen as a problematic trend. In fact, India adopted the world’s first national family planning programme in 1952. A decade forward, the Indira Gandhi-led government earned notoriety for its aggressive sterilisation drive, as it tried to bring the fertility rate down from six. It may be noted that despite the flourish in population, India’s growth remained below the mark for decades extending from 1960 to 1990. The entire euphoria around the population’s demographic dividend came in after the liberalisation, privatisation and globalisation of the Indian economy in 1991, following which the diversification of the country's workforce from agricultural labour to manufacturing and services intensified. The comparison between the pre- and post-LPG era indicates that apart from the population boom, it is the policy that matters the most. Rather than being optimistic or pessimistic about the population surge, there is a need to assess the efficiency of the policies aimed at harnessing the potential of the human resource pool. The manufacturing sector of India, which could potentially reduce the perennial problem of unemployment, still remains a weak spot. This may not just be a passing problem. The second wave of the COVID-19 pandemic had shaken the confidence of low-wage manufacturing workers in urban areas, many of whom had migrated from villages. Their plight, despite being so visibly pronounced, remains ill-documented and unacknowledged. Failed by the system, as reports suggest, many of them are still reluctant to return to their workplaces in towns. Their vulnerability was exposed wide open, and the reason was not just the severity of the pandemic, but also the lack of policy support from the government. A large proportion of India’s working age population is still semi-literate and semi-skilled. Unless the government earns back the trust of this huge segment, optimal utilisation of the demographic dividend will remain a pipedream. Still worse, turning into a liability, India’s vast workplace can also lead to a demographic disaster. The reversal from industry to farm jobs is threatening, and must be changed through appropriate policy interventions. Also, the talks of demographic dividend start appearing to be a sham when one considers unemployment figures. The official estimates show that India’s unemployment figures rose from 2.7 per cent in 2011-12 to reach 6.1 per cent in 2017-18, before declining again to 4.1 per cent in 2021-22 — the year ravaged by the pandemic! Estimates from the Centre for Monitoring the Indian Economy (CMIE), however, show a grimmer picture. It reported India’s unemployment rate to stand at 7.8 per cent in March, with urban India faring worse than rural India. More disturbingly, the country’s labour force participation rate (LFPR) has not been up to the mark, meaning that the proportion of the working age population seeking jobs is also declining. India’s soaring unemployment, caused by a slump in critical sectors like manufacturing, has been a massive problem. The country needs a truly imaginative policy intervention to come out of the chaos, for a wonderful opportunity and an impending fiasco are knocking at two separate doors, simultaneously. Meanwhile, the UN report on population suggested that eight nations with more than 10 million inhabitants, most of them in Europe, saw their populations shrink over the past decade. Populations of many countries, including Japan and China, are ageing. A wide gulf appears to be emerging in the labour sector, globally. However, reports suggest that even countries with ageing populations, like Vietnam and Bangladesh, are attracting more investments and generating more employment than India. It is very important to note that the growth rate of India’s population has been on a decline for a long time, and its fertility rate, too, is well under control. So, it is not the population that should be treated as a problem. The real problem lies in policy lapses. India has only limited time to harness its demographic dividend, which should not be wasted.