1: Introduction and Overview of the Issue

- The World Bank, according to the "Jobs for Resilience, South Asia Development Update" report, has raised concern that South Asia, inclusive of India, is not effectively exploiting its demographic dividend.

- Demographic dividend refers to the economic growth potential resulting from a change in a population's age structure. It is especially pertinent when the majority of a population is working-age individuals.

- India is projected to reap this demographic dividend for 37 years, from 2018 to 2055, provided appropriate harnessing of this human capital potential.

2: Issues in Harnessing Demographic Dividends

- Jobless Growth: South Asian countries are grappling with jobless growth, with an employment ratio of just 59% in 2023.

- Low Private Investment: Economic growth driven primarily by public investment, with private investment on the decline, holds back sustainable economic development and job creation.

- Global Growth Slowdown: Slowing global growth presents challenges due to potential trade, investment, and economic repercussions.

- Risks: Geopolitical tensions, climate change, and pandemics pose additional hurdles to effectively utilising the demographic dividend.

3: Challenges Specific to India

- Poor Skill Development: India struggles with low employability among graduates, with a mere 20-30% of engineers securing jobs suited to their skill-set.

- Low Human Development Index: Lower life expectancy and education levels put India at disadvantage on the UNDP Human Development Index.

- Sizeable Informal Economy: A whopping 216 million Indians are part of the informal economy, dealing with low wages, limited social security, and irregular employment.

- Regional Disparity in Demography: Surge in the working-age population is concentrated in some of India's poorest states, so employment opportunities generated should be meaningful.

- Shrinking Female Labor Force: India faces a hurdle with a declining female labour force participation rate, hindering the country's ability to fully utilise its workforce.

- Psycho-social Issues: India ranks high for suicide rates and drug abuse amongst youth, potentially contributing to overall societal instability.

4: World Bank's Proposed Measures to Improve Utilization of Demographic Dividend

- Enhance Trade Openness: Reducing barriers to global trade could encourage economic growth and job creation.

- Adopt Flexible Labour Laws and Efficient Land Markets: This could augment business competitiveness, attract investment, and boost job growth.

- Investing in Infrastructure: Investment in sectors like transportation and agriculture could bolster productivity, competitiveness, and job opportunities.

- Encourage Female Labor Force Participation: Wage subsidies, tax benefits, and work-life balance initiatives could boost female labour participation.

- Improve Human Capital: Skill development programs may facilitate the transition of workers from agriculture to non-agriculture sectors, boosting productivity and economic diversification.

5: Additional Measures to Boost Demographic Dividend

- Increase Healthcare Investments: A healthy workforce contributes to a productive workforce.

- Reform Informal Sector: Streamlining regulations, providing credit access could contribute to sector reforms.

- Invest in Latest Technology: Supporting R&D in emerging fields could harness the potential of demographic transition.

- Manage Urbanisation: Young people moving into urban areas necessitates planning for amenities and services.

- Enhance Social Security: A mere 4% of Indians are under any form of social protection, lagging behind even Bangladesh, indicating the need for effectively broadening the social security net.