Unequal distribution of demographic dividend
The final census figures of the country have officially been released now. The size of the country has not substantially changed except that a...
The final census figures of the country have officially been released now. The size of the country has not substantially changed except that a population of 376151 has been added to the provisional figures of 1210193422, announced about a year ago.
But, we have different demographic data sets that are valuable to analyse the impact of population on development and vice versa. The internationally reputed scholar and former Union Minister of Health and Family Planning Sripati Chandrasekhar, a Telugu bidda (born in Rajahmundry), contributed enormously to demography and population control.
His generation of demographers never looked at numbers as an advantage, unlike the present scholars who consider that the opportunities created by globalisation are beneficial to the populous Third World countries like India. The country, according to some, is beaming with young population that contribute demographic dividend. India is shining!
Demographic dividend is a situation where the decline in fertility rates would help reduce the dependency ratios that benefit a generation through; 1. Increase in the productive labour supply, 2. Increase in savings due to fewer dependents, 3. Opportunity to invest in human capital (education, health etc), 4. Increase in domestic demand due to the rise in the GDP, and 5. Foreign remittances by young migrants. Generally, the projections given by the IMF and the US census bureau are cited to show that India would surpass China by 2025 with young working age population. India would be 1.692 billion by 2050.
Some of our economists are trying to convince people that we need not worry about the Malthusian challenge as we will have more openings through market and global advantages as the largest supplier of labour in the World. Is it true? How are the dividends distributed and who are the beneficiaries? The euphoria about the dividends reminds us about the phase of chattel slavery introduced by the colonialists and the export of humans from Africa to the USA and other European nations during the 17-18th centuries.
Repeat of this phenomenon in British India through shiploads of so-called indentured labourers to other colonies was found to be not involuntary. The exodus of the so- called socially and economically depressed castes was primarily due to the indignities suffered at home. But, the modern body-shopping business in the name of ICT jobs to the Anglo-American countries is considered as dividend, maybe due to change in our attitudes or the composition of the emigrants (castes).
In fact, if the country boasts of its Diaspora and its Pravasi Bharat, it is due to the first generation of migrants. But we do not recognise this. We observed recently that Telugu pride is paraded in Malaysia without the representatives of Kalingandhra from where they migrated.
The UNDP has published figures relating to the educated migrants in its Human Development Reports and found that India has the largest number of migrants in the USA (28.4 lakh). Interestingly, equally good number of migrants is in the Muslim countries like Malaysia (24 lakhs) and Arab Emirates (about 45 lakhs). The remittances from NRIs are estimated to be $ 66 billion in 2011-12, raised from 8.8 per cent in 1996 to 22 per cent in 2011 out of $294 billion invisibles. Though the remittances never crossed 5 per cent of our GDP, they were considered as crucial for our dependent development.
In fact, China has the highest amount of foreign reserves amounting to $3310 billion and our reserves are the lowest among the BRIC nations. As per the source of our remittances, Middle East contributes 33 per cent; North America 30 per cent, Europe 20 and the rest are derived from others.
The amount received in Kerala is equal to 22 per cent of SDP (about Rs 59,000 crores). In other words, the so- called benefits from Anglo-American globalisation are not as large as the low-paid workers contributing from the Middle East. It may due to the high per capita value of remittances from USA that our scholars call it demographic dividend. In fact, our out migration to the Middle East took place before 1990 and from relatively backward regions like Telangana.
What about the demographic details? Most of the States, particularly the South Indian States, have passed the third phase of demographic transition where the birth rates dropped due to use of FP methods, increase in wages and impact of reform movements (Chalam K S-Dravidian Marvel).
There is a clear shift in the transition from 1981. The trend seems to have influenced the age structure of the productive age group of 15-59. The proportion of population in the group was 54.1 % in 1981, 58.1 in 2001 and 62.5 in 2011 and it would go up to 65.2 if the working age is raised to 64. The rate in the urban areas is a little higher at 66.6 % under the 15-59 age group.
We have different nomenclatures to call the same phenomenon differently with the change of ideology or power structure. We used to call the out migration of educated labour force as "brain drain" just before globalisation and now the same group is called "brain gain".
In fact, the opportunity cost of the educated labour force for the development of the country is not taken care of in the estimates of dividend from migrants. The monetary value, mostly the devalued rupee, is taken to estimate the gains and not the damage done to the nation (brain crippled) and its independent future.
Scholars like CP Chandrasekhar warned that the employment figures, indicating the absorption of youth into the labour force, are not as high as one would expect (2006). This can be seen from the work force participation rates given by census.
It was 39.1 in 2001 and marginally changed to 39.7 in 2011 and female rate dropped from 25.6 to 25.5. With the jobless growth with the surge of informalisation of labour at 85 % and reduced TFP in agriculture, what dividends do we expect?
Further, the NRI remittances and favourable age structures are confined to a few regions. Bihar, Jharkhand, M.P, Odissa, Rajasthan, U.P and even Kerala come below national average of 15-59 age population.
The advantages of high savings and GDP growth are now shattered. The savings as proportion of GDP have substantially declined from 36.8 in 2007-8 to 30.8 in 2012-13 and growth rate plummeted at pre-liberalisation period at 5 per cent.
Liberalisation has facilitated urban agglomerations with 25 % living in slums, highest being 54.6 per cent in Mumbai, 32.4 in Kolkata and 18-20 per cent each in Pune, Surat, Hyderabad and Delhi. Is this the dividend that the country gains from its population or is a serious portent awaiting us?
The internationally reputed scholar and former Union Minister of Health and Family Planning Sripati Chandrasekhar, a Telugu bidda (born in Rajahmundry), contributed enormously to demography and population control