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Kerala PSC Indian Economy Book Study Materials Page 546Book's First Page
21.4 ndian onom the event receding, too—the opportunity must the per capita income levels of the three not be missed. countries. Turning point: Global demographics saw a (ii) India’s WA to NWA ratio is likely to peak turning point in 2016—for the first time since at 1.7, a much lower level than Brazil and 1950, the combined WA population (age group China, both of which sustained a ratio 15–59 years) of the advanced countries declined. greater than 1.7 for at least 25 years. As per the projections of the UNO, for the next (iii) India will remain close to its peak of WA three decades China and Russia will see their WA and NWA ratio for a much longer period declining by over 20 per cent. However, India than other countries. seems to be in a demographic sweet spot with its WA The ‘distinctive’ demographic pattern of India population—projected to grow by a third over the has a cause and consequence for it— same period. Economic research of the last two decades has suggested that the higher growth rates Cause: All these countries started the post-World in East Asia were driven by demographic changes. War II era with roughly the same very high total Countries with large WA populations appear to fertility rates (TFRs). In China and Korea, TFR benefit more (due to higher economic dynamism) then declined rapidly to below-replacement levels as younger populations: (less than two children per female), causing the are more entrepreneurial (adding to share of WA population to rise until the early productivity growth); 2000s, then to fall as ageing began to set in. In India, however, the decline in TFR has been tend to save more, which may also lead much more gradual. to favourable competitiveness effects; and due to growth, they have a larger fiscal Consequence: India should not expect to see growth base, fewer dependents and government surges or growth decelerations of the magnitudes to support. experienced by the East Asian countries due to demographic dividend—and might be able to Theory suggests that the specific variable sustain high levels of growth for a longer time. driving the demographic dividend is the ratio of the working age to non-working age (NWA) Spatial differentiation: India has a large population. ‘heterogeneity’ among the states in their demographic profile and evolution—there is inDiA’s DemogrAPhics a clear divide between peninsular India (West India’s distinctiveness: The comparison of the Bengal, Kerala, Karnataka, Tamil Nadu and WA/NWA ratio between 1970 and 2015 (based Andhra Pradesh) and the hinterland states (Madhya on the projections of the UNO) for India, Brazil, Pradesh, Rajasthan, Uttar Pradesh, and Bihar): Korea and China illustrates three distinct features The peninsular states exhibit a pattern that about Indian demographic profile—having is closer to China and Korea, with sharp implications for the growth outlook of India and rises and declines in the WA population. its states: The difference, of course, is that the WA (i) India’s demographic cycle is about 10–30 ratio of most of the peninsular states will years behind that of the other countries. peak at levels lower than seen in East Asia This indicates that India has next few (West Bengal comes closest to Korea’s decades as opportunity to catch up to peak because of its very low TFR).