India's new trilemma

…kids, jobs, emigration

“Aren’t you kids going to have children?” I asked one of my nieces who had come for a one-week holiday with us recently. Of course, addressing her and her husband as “kids” was a gesture of affection from me that they enjoyed as well, but they weren’t kids, they were both in their mid-30s and both professionally qualified and holding good jobs in New York City.

“We think having children will only distract us from our careers, and will not do anything good for us,” said my niece.

That answer sent me into a deep reverie. Wasn’t India set to rule the world based on its booming number of young, working-age population? If all members of my niece’s age group of Indians, the so-called “millennials”, were to give up on children, what would happen to India’s “demographic dividend”?

The term “demographic dividend” was coined by the Harvard economist David Bloom and his co-authors in their book by the same name in which they spelt out how the size of various age cohorts in a country determined how well or badly that country did economically.

For instance, countries in which the proportion of population in the 15-64 age group is high tend to show much more vigorous economic growth than those where either under-15 or over-65 cohorts are dominant. This is because it is believed that these latter age cohorts only consume economic resources and do not participate in economically productive activities. And there is much hue and cry that India right now has the highest proportion in the 15-64 age group in the world, and thus, is set to be the leader in economic growth.
 

But, whenever I hear recurrent cries of “India’s demographic dividend”, I cannot but think of the time in 1971, when I was about to graduate from the Indian Institute of Management (IIM), Calcutta, when the opposite theory held: It was fashionable then to hold that India’s economic problems were because of a very high population growth rate.

The war cries of the economists then were: “Population control!” “birth control!” And we were all encouraged to clap when the central government “vasectomy camps” in 1971 did sterilisations on 1.3 million men in that year and targeted 3.1 million by the next year. The World Bank gave India a large aid for sterilisation programmes for India to bring down its population growth rate: $66 million from 1972-1980. International pressure, particularly from Western countries, was intense. US President Lyndon B Johnson denied food aid to India in 1965 unless sterilisation was accepted as state policy.
 

Of course, like all “fashionable things”, there was intellectual support as well. For the population control missionaries, the book by Paul Ehrlich (of Stanford University) titled The Population Bomb was the bible, selling millions of copies, saying things like “hundreds of millions of people are going to starve to death”, and that “nothing can prevent a substantial increase in the world death rate”.

Still another dimension of the population debate is the Kota type discourse popular in the media right now about the tribulations of the vast number of applicants who compete for entry into our higher-education institutions: More than a million applicants for the 10,000 seats at the Indian Institutes of Technology, a similar large number of applicants for the 80,000 seats at India’s medical colleges, a quarter of a million applicants for 4,000 seats at the IIMs.

Compare this to my time in 1969, when I earned a seat at IIM Calcutta, competing with a mere 30,000 test-takers for the 100 seats there. In other words, while the number of high-quality educational institutions has multiplied manifold, the number of contenders for admission to them has risen even faster. No wonder, films like Kota get a multimillion strong empathetic audience. And of course, if your parents are wealthy enough, you can go join an American university, paying huge amounts: Nearly a three-quarter of a million Indian youngsters do that a year nowadays. I am sure no other country in the world has this extent of meritocratic filtering.
 

This vast engine of entrance exams is fuelled by an equally vast number of tutorial colleges and paid for by parents taking vast amounts of bank loans. And possibly a degree of corruption, as the recent events at the National Eligibility Entrance Test are gradually revealing.
 

Then we have the spectacle of Indian-origin, Indian-educated folks heading or in top managements of virtually all the major companies in the world: Satya Nadella at Microsoft, Sunder Pichai at Google, Vasant Narasimhan at Novartis, Arvind Krishna at IBM, Laxman Narasimhan at Starbucks… the list goes on. With all this pattern of Indian successes in foreign countries, it is no surprise that foreign inward remittances to India from Indians abroad last year were $125 billion, which is almost 60 per cent of what India’s famed software services exporters earn!
 

Is some of this avid desire to get jobs in Western countries because of the reality of India: Most large firms are owned and run by business families where top management positions are reserved for family members? Or is it because real estate prices for homes in Bombay and other Indian metro cities, the cities where most top jobs are, are unbelievably high compared to Indian salaries?
 

Are our millennials right then in forgoing children and/or seeking jobs and solace abroad?

The writer (ajitb@rediffmail.com) is an internet entrepreneur