Potential demographic dividend for India, 2001 to 2061: a macro-simulation projection using the spectrum model

Abstract

This paper projects potential demographic dividend for India for the period from 2001 to 2061 by using simulation modelling software, Spectrum 5.753 which integrates demographic and socio-economic changes. The simulation results highlight that a combination of favourable demographic changes and the right socio-economic policy scenario can provide a maximum demographic dividend to India. Two key findings, after checking their robustness, from the simulation modelling are: First, the effective demographic windows of opportunity for India is available for the period between 2011 and 2041, giving India roughly 30 years of demographic bonus. It is the period where the maximum of the first demographic dividend can be reaped before the ageing burden starts. Second, favourable demographic changes alone has potential to provide a demographic dividend in terms of GDP per capita over 165,000 rupees which is equivalent to an additional 43 percentage for ‘demographic-emphasis scenario’ (Rs. 548,600) compared to ‘demographic as-usual scenario’ (Rs. 382,750) in 2061. However, reaping demographic dividend is conditional on supporting socio-economic policy environment in terms of investment in human capital and decent employment opportunities.