We have heard this many times: India has about 17 percent of the world’s population and just 2 percent of the world’s land area. This imbalance between the number of people and the resources available is the basic reason for India’s woes. Pretty simple argument to find fault with!
But is reality as simple?
Often looking at issues too closely makes you lose the sight of the bigger picture. So let’s look at some basic facts. The world in 2015 will be populated by some 7.2 billion people, up from 6.1 billion in the year 2000. The rate of world population growth will, have diminished 1.3% in 2005, to approximately 1% in 2015. The financial value of world according to World Bank stood at US$ 28.5 trillion in 2003. This will rise to over US$ 50 trillion by 2015 growing at well over 8% annually. Clearly the world economy is growing at a much faster pace than world’s population. May be there is no correlation between population and economy
In reality India’s real problem is not population, but its economic policies that over regulated labor and product markets, blocked domestic investments that made India insular
So is India’s population really the curse India is carrying? Or will this population itself become India’s new weapon in a rapidly globalizing world? There are three realities that we need to focus on.
We will become the youngest nation in the world: Indian population will continue to grow at over 10-12% per annum. Only countries that will keep pace with India are Malaysia, Egypt, Vietnam, Turkey, Indonesia, Brazil and South Africa. Even among these countries India would be uniquely placed. It will be the only country by 2012, which will have more earning population than those who are dependent. India will see sharpest growth in 15-60 year age group. This age group will grow at over 30% from 600 million in 2003 to 800 million by 2016. The young India will pose a serious challenge to growth of China, whose population growth would have slowed down, and whose potential work force would start to stagnate.
We will get Richer: India’s 1.1 billion people could see the nation’s wealth per capita doubled. It is estimated that 61,000 individuals now have assets exceeding US$1 million and will double by 20015. India will become the world’s third richest economy by 2020. So not only will we be in top 3 in the world in terms of people power, but also in top three in terms of earning power. India will remain an open economy and an open society, benefiting from a brain gain rather than losing talent in a brain drain of well-educated young Indian professionals going abroad to seek their fortunes.
The over 60 population will be both a challenge and opportunity: The over 60 year population will rise from 90 million in 2003 to over 100 million in 2016. At one end they will put pressure on health care system because of lifestyle diseases and greater life expectancy. At the other they are a new opportunity, as they will also enrich the demographics of the country. As the first generation of post liberalized economy they will bring in their experience into play and remain a part of growing economy.
By focusing on these three factors I am not trying to take the focus away from some of our demographic challenges. We need to reduce our infant mortality rates. We need to bring more and more population into the health care fold. We need to ensure that our literacy rates keep on increasing. We need to ensure that rapid increase in urbanization does not speed up decay of an already busting at seams infrastructure. We need to ensure that rural infrastructure continues to develop. All these are real problems, but are not the problems of only population. Most of these actually need optimum utilization of India’s abundant resources. After all we have abundant food grain reserves, forex reserves, natural resources and whatever else is needed. And above all the political will to make it happen.
I believe that larger population of India will become an asset rather than a liability to economic growth. To make this happen we have to invest more education and training, and leverage new technologies. In the modern environment, a larger population raises productivity by inducing greater specialization in skills and occupations. And with the world’s developed world struggling to cope with diminishing population, we will for once have the genuine advantage.
People of any country are never a bane.
Published in DNA Mumbai, January 9th, 2007