Shishir Sinha

Became journalist by chance but enjoy boring policy reporting. Love watching serious political drama, but yet to learn the trick of reporting them.

Shishir Sinha

Demographic dividend to demographic disaster

Shishir Sinha | Updated on March 09, 2018 Published on June 09, 2013

It is bad that one does not have a job, but it is equally worse if some one has a job and he or she is not getting a chance to grow.

Raising the retirement age seems to be an invitation for demographic disaster.

“Will the Government raise the retirement age to 62 years,” someone asked me.

This question was being asked for the seventh time since morning.

Out of seven callers, three were bureaucrats; two were PSU employees and two were students looking for a job. I replied patiently to all seven callers that yes, there is a proposal for raising the retirement age by two years.

The proposal for raising the retirement age is not new. It is under discussion for almost 4-5 years. And trust me, this ‘secret’ proposal gets leaked only at the time of election. This time, the speculation is that retirement age is likely to be raised not just for the Government employees but also for the public sector employees.

What is the logic? A senior bureaucrat told me that raising the age will help the employer use the experience for a longer period. At the same time, it will defer the payment liability (in terms of gratuity, encashment of earned leave and other benefits). Very good. What will happen to promotion opportunity for younger lot and new employment opportunities. There was no clear answer.

There is a feeling that such a proposal will benefit mostly those who are on the verge of retirement. At the same time, young and lower middle age ones will get frustrated as elevation will become difficult. However, the most important issue will be new openings. On the Government side, there has been a policy to recruit one on the retirement of three. So, where is the new job in the Government sector?

This issue is relevant when the Government is talking of reaping ‘Demographic Dividend’. This term indicates increase in growth as a result of higher proportion of working age people in the total population of a country.

Economic Survey for 2012-13 says, “Nearly half the additions to the Indian labour force over the period 2011-30 will be in the age group of 30-49, even while the share of this group in China, Korea, and the United States will be declining. That India will be expanding its most productive cohorts even while most developed countries and some developing countries like China will be contracting theirs in the coming decades can be another source of advantage.”

But what happens, when there is no job, and if there is job, there is little opportunity to grow? It is bad that one does not have a job, but it is equally worse if some one has a job and he or she is not getting a chance to grow. Rather, the latter situation is more damaging in a sense that frustrated employees lower the productivity at a workplace.

Now, consider another fact. The Economic Survey for 2012-13 has mentioned that employment growth in the organised sector, public and private combined, has increased by 1.0 per cent in 2011 as against 1.9 per cent in 2010. The annual growth rate of employment in the private sector in 2011 was 5.6 per cent whereas that in the public sector was a negative 1.8 per cent.

We need to remember that more young population does not mean more numbers of workers. This will be possible, only if there are productive jobs. If regular sources of employers, in public and private sectors, both are not creating jobs, then self-employment is another option. But is it easy to become an entrepreneur? Just see the World Bank’s 2013 report on Doing Business in India.

This report has placed India at 132 among 185 nations. But when it comes to starting a business, India is ranked 173rd! The report said that starting a business, takes about 12 procedures, 27 days, and a paid-up capital of 140 per cent of per capita income. Remember, it takes only 7 procedures, 19 days, and 18 per cent of per capita income on average for our neighbours in South Asia.

Woes for an entrepreneur do not end with completion of initial procedures, then he or she has to go for a number of other clearances such as building or occupancy permits besides water, electricity and sewerage connections. For all these, an individual will be required to visit various authorities. According to the report, it takes as long as 1.5 months to obtain an electricity connection in 7 out of the 17 benchmarked Indian cities. With all these difficulties, how can entrepreneurship be developed?

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Published on June 09, 2013
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