Bottomline | An ageing China is India’s opportunity

What’s important to note here is that the age dependency ratio after dropping sharply for China in the early part of this century has started trending up, while it is moving down for India. What’s more important to factor is that this is due to a sharp increase in the dependency of the older age population and not those of young dependants. This suggests more need for healthcare services and more pension payouts as the years go by. Harvard professor economics and demography David E Bloom pointed out in a piece on the subject: “Three decades ago, the world was populated by more than three times as many adolescents and young adults (15- to 24-year-olds) as older people. Three decades from now, those age groups will be roughly on par.” And the skew could be worse for ageing economies.

India hasn’t shown any significant change in its growth trajectory due to demographic factors historically. But some of that can change with a concerted effort to maximise productivity of a growing working class by creating the right kind of opportunities.

As Bloom says: “It is an overstatement to say that demography determines all, as it downplays the fact that both demographic trajectories and their development implications are responsive to economic incentives; to policy and institutional reforms; and to changes in technology, cultural norms, and behavior.” He adds: “Technological innovations are likely to ameliorate the effects of population aging. New drugs to slow the process of aging and add healthy years to people’s lives and the invention and deployment of assistive devices such as robots are two among many such improvements. Institutional innovations like new models of home health care, public transportation systems, the design of urban layouts, and financial instruments are also on the horizon.”

Be this as it may, demographics are not without influence. Provided they are harnessed well. With China + 1 already being a key trend, India has an opportunity to tap into China’s worsening demographic. Can India seize the moment? Or will the likes of Vietnam and Indonesia steal the thunder.

I remain hopeful.