Fertility rate and demographic transition · GS-I
Consider the following statements regarding India's demographic dividend and the emerging care economy:
- India's demographic dividend refers to the economic growth potential arising from a relatively large working-age population compared to dependents, and it is time-bound — the window narrows as the population ages.
- An ageing population increases the old-age dependency ratio, which in turn raises the demand for caregiving services and a formalised caregiving workforce.
Which of the statements given above is/are correct?
Explanation
Statement 1 is correct. The demographic dividend is the accelerated economic growth that can result from a shift in a country's age structure, specifically when the working-age population (15–64 years) is proportionally larger than the non-working-age population. Crucially, this dividend is time-limited: as fertility rates decline and life expectancy rises, the population ages, the working-age share shrinks, and the window for leveraging this dividend closes. India is currently in this transitional phase. Statement 2 is also correct. As the elderly population grows, the old-age dependency ratio — the number of elderly persons per hundred working-age persons — rises. This directly expands the need for personal care, health support, and assisted living services. A rising dependency ratio therefore creates structural demand for a trained, organised caregiving workforce, which is precisely why India's policy discourse has begun treating the care economy as a major social-sector and employment challenge.