National Strategy Lecture - Will the 'Demographic Dividend' Help India become a Superpower?

Jayan Jose Thomas is currently an Assistant Professor at Indian Institute of Technology Delhi. He has previously held academic positions at the National University of Singapore (2004 - 2008), Indian Statistical Institute, Kolkata (2008), Madras School of Economics (2008- 2009) and Central University of Kerala (2009- 2010). Jayan completed his PhD in development economics from the Indira Gandhi Institute of Development Research, Mumbai (2005) and Bachelor of Technology in industrial engineering from Kerala University (1995).

Jayan’s research has dealt with various aspects of Indian development, especially issues related to labour, technology and industrialization. Jayan has worked extensively using Indian data sources, conducted field studies in industrial centres and in two Indian villages, and worked with archival material. While India will continue to be the focus of his future work, Jayan is keen to expand his research interests to other regions, particularly China. He hopes to contribute to the building of an interface between economics and other social sciences. His recent research papers have appeared in reputed journals including World Development and Development and Change, and in edited volumes published by Oxford University Press and Palgrave Macmillan Ltd. He was awarded the ‘Young Labour Economist Award’ of the Indian Society of Labour Economics in 2003.

Jayan has taught (or is teaching) courses on Macroeconomics, Indian Economic Development, International Economics, Development Economics and Knowledge Economies. Currently, Jayan is researching on the theme Labour, Capital and Technology in Indian Industrialization.

Abstract

Will the 'Demographic Dividend' Help India become a Superpower?

India has a relatively young population, and some commentators argue that the resultant ‘demographic dividend’ could push India’s economic growth ahead of China’s in the future. Since the 1990s, there has been a boom in India in the information technology industry as well as in a number of knowledge-intensive sectors such as pharmaceuticals research and animation. However, the other side of the coin is that these new, technologically advanced sectors form only a tiny island in the ocean in terms of employment. In India’s total workforce of 458 million (2004-05), factory sector workers number less than 10 million and the IT sector employs just 2.2 million. Almost all of the 57 million new jobs generated in India between 1999-00 and 2004-05 were in the informal sector. A crisis-ridden agriculture, construction, and low value-adding services, including notably of women employed as domestic workers, provided most of the new jobs. Women, especially educated women in urban areas, found it particularly hard to find suitable employment opportunities. The number of ‘missing women’ in the Indian economy -- women who withdraw from labour force and attend only to household work – was a staggering 162 million in 2004-05.

It is clear from the above that there are limitations to India’s rapid economic growth led almost entirely by the services sector. Building a diversified manufacturing sector that can generate massive employment opportunities is, therefore, crucial for Indian development. To fulfill India’s aspirations for a leading position in the global economy, the country will also have to emerge as a key player in innovation, and this requires state-directed efforts in research and development. The biggest of all challenges for India as it tries to realize its demographic dividend is to ensure that its population numbering more than 1.2 billion is healthy and educated.