CA Foundation · Business Economics · Indian Economy
The 'demographic dividend' for an economy such as India is said to arise when:
The demographic dividend arises when the working-age population forms a large share of the total, lowering the dependency ratio. This can raise labour supply, savings and growth if people are educated and employed. Fast population growth or a rising elderly share does not create it.
- AThe total population grows faster than food production
- BThe share of the working-age population is large relative to dependentsCorrect
- CThe proportion of elderly people rises rapidly
- DLife expectancy exceeds 80 years
Explanation
A demographic dividend arises when the working-age group (about 15-59 years) forms a large share of the population, so the dependency ratio is low. This can raise savings, labour supply and growth if workers are skilled and employed. Rapid population growth or ageing does not create this dividend.
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