India’s ‘Demographic Dividend’ only good if there’s growth

Christopher Werth Aug 30, 2012

India’s ‘Demographic Dividend’ only good if there’s growth

Christopher Werth Aug 30, 2012

Kai Ryssdal: Tomorrow in New Delhi, Indian economists will get their latest growth figures to chew on. Quarterly GDP is expected to be somewhere in the neighborhood of 5.3 percent. Economists — not to mention certain politicans — here would love to post that kind of number.

In India, though, anything short of 9 percent or so is a bit of a letdown. Because as Indian politicians know only too well, a stuck economy means a bleak future for the millions of new young people looking for jobs every year. Christopher Werth reports.

Christopher Werth: On this quiet side street in Mumbai, there’s a big, brightly lit sign that displays India’s official population: just over 1.2 billion. And each night at midnight, Rajesh Vishwas Rasale changes the numbers to reflect how many new people the country added over the course of the day.

Rajesh Vishwas Rasale: Population change.

Rasale is a security guard at India’s institute for tracking population growth. The institute estimates India adds about 58,000 more citzens every 24 hours, which never ceases to amaze Rasale.

Rasale: I’m happy to do this job. But everyday the population of India is increasing so much. It makes me a little worried.

For India, a growing population was supposed to be a good thing — what people like Adil Zainulbhai of the consultancy McKinsey in Mumbai call the “demographic dividend.” He says the idea is that as populations in the U.S. and Europe get older, India will grow younger. Already, more than half of the country is under the age of 25.

Adil Zainulbhai: That’s a pool of young workers who, if they’re productively employed, can give a real boost to the economy. That’s the demographic dividend.

But Zainulbhai says the danger is that as India’s economic growth slows, that demographic dividend could quickly become a “demographic nightmare.”

Zainulbhai: If you have a very large young population that you cannot find jobs for, then that creates social unrest. You know, so we would probably have a complete breakdown if the growth rate fell to 3, 4 percent.

To avoid that fate, Zainulbhai says India needs more manufacturing and big infrastructure projects to modernize its economy. That point was driven home earlier this month when India’s shoddy electric grid failed and left over 600 million people in the dark. And Zainulbhai says if India is really going to get millions more young people into work, it needs to do a better job educating them.

At this grade school in Mumbai, the average class size is 150 students.

Anuradha Mahajany: Hundred-fifty students per teacher.

Anuradha Mahajany is a teacher here. She says India’s education system is failing to provide the skills that would help more low-income kids in India do better than their parents.

Mahajany: The richer section of society, they’re sending their children abroad to study. The poorer section are exactly where they were. Poor things, they’ve got no promising career.

At a cafe just around the corner from the school, Smita Singh wipes down the counter and whips up another latte. She’ll be the first to tell you hers isn’t exactly a promising career. But it’s something. She’s 23, and while she works here, she slowly plugs away at a college degree.

Smita Singh: I don’t like this job. But I don’t want the next generation to be poor. I come from a very poor background. That’s why I’m working and studying, to make a better life for the next generation.

Singh says with all the talk of India as an emerging economy, she’d always imagined that in twenty years, that next generation would live in an India that looked more like the United States. Now, she says, she’s not so sure.

I’m Christopher Werth for Marketplace.

Ryssdal: That story came to us with the help of the International Reporting Project in Washington, D.C.

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