Answer: 

Introduction:

Demographic dividend occurs when the proportion of working age people (15 years – 64 years) in the total population is high because this indicates that more people have the potential to be productive and contribute to growth of the economy. The Young population is expected to drive the next level growth of the Indian economy and India has a very young population now. But while we flaunt the demographic dividend, there are major issues that act as impediments. The largest and most serious among them is unemployment.

Body:

Challenges of India’s demographic dividend:

• Lack of skill sets: While education levels in the population have increased, skills have not. Educational standards focus on theoretical knowledge more and graduates are devoid of skills after they complete education. It is necessary that job-oriented skills are inculcated.
• Unorganised sector: A huge majority of the workforce is employed in the unorganised sector which is riddled with low wages and the absence of social security.
• Fall in female labour force participation: Growing female literacy is not translating into relevant and marketable skills. Lack of flexible entry and exit policies for women into virtual classrooms, and into modules for open digital training, and vocational education limits access to contemporary vocations.
• Lack of support infrastructure: While entrepreneur skills are desired and promoted, there is widespread deficiency of required infrastructure to support new ventures. The need for licence, permissions, and time-consuming efforts discourage new ventures. New privatisation reforms have helped up to a certain extent but a lot is still desired.
  • Ex: Tax issues, labour issues, electricity and water issues etc.
• Disguised unemployment in agriculture: Lack of development of cottage industry and MSMEs has made it difficult to absorb the unskilled labour force from agriculture

Jobs prospects for future:

• The IT driven service sector has been the largest addition to job development in recent times.
• Gig economy: These include food delivery, product delivery, service delivery etc. They act as a bridge between customers and service providers. This gives the unskilled labour force exposure which helps them advance further.
• Food processing: Turning primary agriculture into food processing plants can drive the next generation of development in rural areas. Technological support for agriculture will be an additional boost. Ex: Food parks for processing potatoes.
• Technology driven jobs can support the next generation of individuals. The expertise with technology allows them to learn skills faster. These will rapidly expand into a full scale employment sector in future. Ex: YouTube content developer, drone manufacturer, robotics, freelance software developer.
• Large scale manufacturing in India is currently restricted to unorganised and underutilised jobs where productivity is very low. High manufacturing jobs such as electronics, defence equipment, precision products can drive demand and growth for jobs. Ex: Mobile parts manufacturing, assault rifle production.

Conclusion:

India needs to reform Labour laws to promote formal employment, focus more on skill development and promote FDI in the industrial sector for bringing investment, technology.