To obtain full benefits of demographic dividend, what should India do?
[UPSC Civil Services Exam – 2013 Prelims]
(a) Promoting skill development
(b) Introducing more social security schemes
(c) Reducing infant mortality rate
(d) Privatization of higher education
- According to the Economic Survey of 2011-12, India experienced less capital per worker growth compared to countries like China and South Korea. However, India demonstrated relatively stronger growth in Total Factor Productivity (TFP).
- China’s growth can be attributed to a combination of increased capital deployment and significant improvements in TFP. Sustaining strong growth in China beyond its initial stage of development relied on a high investment rate and notable enhancements in job productivity.
- To follow a similar path, India would need to boost savings and investment, which would be facilitated by the ongoing demographic transformation. However, increasing the intrinsic productivity of jobs, indicated by TFP, is also crucial.
- The survey concludes that India can harness the demographic dividend by enhancing Total Factor Productivity, transitioning from agriculture to non-agriculture sectors like manufacturing and services, and shifting from the unorganized sector to the organized sector. Achieving these goals requires a focus on skill development, making it a key factor in leveraging India’s demographic dividend.
- Hence, the correct option is number 1, emphasizing the importance of skill development in harnessing the demographic dividend for a country like India.