Demographic Advantage-Dividend or Curse?-Part-2

Though a large number of Engineering Colleges and Management Institutes have come up all over India, there are dearth of institutions for medical profession, both at professional level and support staff like nursing and hospital attendants. This is apart from very high fee for some private medical colleges, which make them out of bounds of common middle class. Moreover, there is not enough post-graduate seats available for general stream science students leading to shortage of teachers in colleges.

We often complain of inadequate health services infrastructure in the country. Can we improve it in absence of adequate number of healthcare professionals? We need to immediately address it. Investment in building quality health services infrastructure with the help of adequate number of healthcare professional will strengthen our position in research and earn precious foreign exchange by treating large number of foreign nationals. If our engineers can earn foreign exchange by exporting software services, our medical professionals can also earn equal amount of foreign exchange by way of providing services to foreign nationals at affordable rates.

Similarly, the increased post-graduate seats in general stream science courses will lead to strengthen our education system allowing our colleges to admit foreign students apart from curbing our students going abroad. We can become foreign exchange earner for providing educational services too.

The collateral benefit of health services and educational services exports is increase in incoming tourism flow, which again will give boost to hotels, airlines, transport services etc.

Thus spending on education in the fields of healthcare and general science stream can improve our foreign exchange inflows apart from giving employment to large number of Indian youths, which in turn increase the consumption levels leading to higher requirement of goods and services leading to further growth in jobs for youth.

Higher job creation  and higher income levels combined with higher consumption levels will lead to increased tax collections and need of lower subsidy requirements. This will automatically improve the fiscal position of Governments both at Centre and State level.

It is high time that Governments both at Centre and State level along-with responsible citizens awaken to make our country much better than what we are today by treating the expenditure on promoting healthcare and general stream educational infrastructure as a capital one instead of a revenue one, for its enduring nature of long-term benefits.

Contd.

Demographic dividend or curse?

India is facing a huge demographic advantage, which is likely to continue for another 10-15 years.

Demographic advantage means that percentage of working/workable hands is highest in the world. China too enjoyed this and utilised to grow in double digits for more than a decade making itself a big economic powerhouse. India can repeat the same, but we are happy to have a growth well below double digits.

Apart from this, our vast percentage of children is uneducated or undereducated. Even a large number of youths are unemployable. If we have large youth population remaining unproductive and unemployed, this will put immense pressure on existing resources, leading to chaos and deterioration in law and order.

Despite this, we have one of lowest per-capita expenditure on education in the world. Higher education is being increasingly left in private hands and slowly moving out of reach for major part of the population. Higher education is important to produce Doctors, Engineers, Scientists and even Teachers. Besides this, it improves the earning capability of individuals. Increased incomes help in increased spending, increased demand and further increased jobs. Doctors, Engineers, Scientists, Researchers and Teachers have capacity to earn foreign exchange. This fact is corroborated by the large foreign exchange contribution by repatriates and software exports. It can be easily examined by the Forex inflows and outflows every year. Most of our trade deficit is being met by surplus in services. This is the case, when we have low percentage of population qualifying as Doctors and Engineers. If the base is increased, we will see further increase in this surplus from services, which is likely to meet entire deficit and may even lead us to current account surplus.

As most of the engineers produced are absorbed by the outsourcing industry, we are not getting good number of researchers leading to large amount spent on technology imports, which also lead to economic disadvantage for local industry, who are unable to compete worldwide. Technology imports, mostly done by the Indian industrialists, who are mainly financiers than actual entrepreneurs have disadvantages. They come at a cost raising the project cost and procuring second-rate technology, as no commercial enterprise will provide technology to create its competitor. Despite huge income tax break on R&D (this should again be linked with Intellectual property rights to avoid misuse), there is very small expenditure on it by Indian Corporates. If IP Assets are taken into account, our big corporates including Reliance and Tata will fall apart. This is the reason for huge trade deficit faced by the country.

Continued……..