INDIAN DEMOGRAPHIC DIVIDEND

This theory is known as the "demographic dividend" a phrase coined by demographer David Bloom. He proposes that when young working-age adults comprise a disproportionate percentage of a country's population, the national economy is affected in positive ways.

Demographic dividend is defined as rise in the rate of economic growth due to a rising share of working age people in a population. This phenomenon occurs with a falling birth rate and the consequent shift in the age structure of the population towards the adult working ages. It is also commonly known as the demographic gift of bonus of demographic window.

   Evolving demographics unambiguously point out that India will remain a  young nation and the largest contributor the next few decades because of rapidly ageing population in the Western countries, and Chin's one-child policy.

A young population is India's demographic dividend. It gives India the potential to become a global production hub as well as a large consumer of goods and services. Further, since the age-group of 45-60 years is the key contributor to household savings, India's savings rate, which has increased rapidly in the decade, will get a further boost thereby supporting investment. 

India, world's second largest populated country after China, has 17.5 percent of world's population. With India's population forecast to grow at 1.0 percent  per year, significantly faster than that of China at 0.4 per cent per year, India will become the most populated country in the world by 2030. India's population is likely to rise from 1.21 billion  in 2010 to 1.48 billion by 2030, and further to 1.6 billion by 2050.

By 2050, according to an International Labor Organisation Paper, The Percentage of people above the age of 65 will be 39 per cent in the U.S., 53 percent in Germany and 67 percent in Japan. India, by contrast will have only 19 per cent above age 60.

According to the Census of India, while the proportion of population in the under 14 age group declined from 41 percent in 1961 to 35.3 percent in 2001( that is, by 5.7 percentage points), the proportion of population in the age group 15-59 increased from 53.3 percent to 59.9 percent ( that is, by 3.6 percentage points) during the same period. The proportion of those above 5.6 percent to 7.4 percent ( that is, by 1.8 percentage points). In terms of absolute numbers, the increase in the 15-34 age-group population is even more dramatic; from 174.26 million (31.79 per cent) in 1970 to 354.15 million (34.43 per cent) in 2000.