Demographic Transition and Dividend

6.1 Demographic Transition Theory

The Demographic Transition Model (DTM) describes a universal pattern of population change as countries develop economically:

Stage	Birth Rate	Death Rate	Population Growth	India's Position
I — Pre-transition	High (~40–45)	High (~40–45)	Low/Zero	1901–1921
II — Early transition	High	Declining	Rapid	1921–1951
III — Late transition	Declining	Low	Moderate	1951–1981
IV — Post-transition	Low (~20–25)	Low	Slow	1981–2011
V — Near-stable	Low/replacement	Low	Near-zero	Some south states, 2020s

India 2023: National TFR = 2.0 (NFHS-5, 2019–21) — just below replacement level (2.1). There is wide variation: Kerala TFR ~1.8 (European levels) vs UP/Bihar TFR ~3.0 (Sub-Saharan levels).

6.2 Demographic Dividend

Definition: The economic growth potential arising from changes in a country's age structure — specifically when the proportion of working-age population (15–64 years) is larger than dependents (children <15 + elderly >65).

India's Demographic Opportunity

• India's median age in 2011: 28.4 years (very young) — compared to China (37), Germany (45), Japan (46)
• Large and growing working-age population (15–64): ~66% by 2030
• Projected to remain demographically "young" until 2040–2045
• Window of opportunity: ~2020–2040 when dependency ratio is lowest

Conditions to Realise the Dividend

1. Education and Skills: Workers must be educated and skilled to be productive (NEP 2020, NIPUN Bharat)
2. Employment generation: Enough jobs must be created (Atmanirbhar Bharat, Make in India, PLI schemes)
3. Health: Healthy workers are more productive (Ayushman Bharat, PM-JAY)
4. Gender participation: Women's labour force participation is very low (21% in India vs 50%+ in many developing countries); must increase

Risk if dividend is not realised: A large unemployed/underemployed youth population creates social unrest — the "demographic burden" rather than dividend.

6.3 Urbanisation

Urban population (2011): 31.16% (37.7 crore) — up from 28.6 crore (2001)

How India Defines "Urban"

India defines "urban" as:

1. All places with a municipal corporation, municipality, cantonment board, town panchayat (Statutory Towns)
2. OR: Settlement with >5,000 population + >75% male working population in non-agricultural activities + density >400 persons/sq km (Census Towns)

Major Urban Agglomerations (2011)

• Mumbai UA: 18.4 million — largest
• Delhi UA: 16.3 million — 2nd
• Kolkata UA: 14.1 million — 3rd
• Chennai, Bangalore, Hyderabad, Ahmedabad, Pune — million-plus cities

India had 53 million-plus cities in 2011 (up from 35 in 2001); projected 70+ by 2030.

Urbanisation Challenges

• Housing shortage, slum proliferation (Dharavi — Asia's largest slum in Mumbai)
• Inadequate sanitation (open defecation — Swachh Bharat impact)
• Traffic congestion, air pollution (Delhi NCR)
• Water scarcity (Chennai, Bangalore)

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