UNPRODUCTIVE CONSUMER BASE IN INDIA

By Sakshi Saxena

UNPRODUCTIVE CONSUMER BASE IN INDIA

Our country has emerged to be the most popular democracy of the world by accounting 17.7% of the world's population. The country occupies 2.4% of world's area and earns only 3.5% of the world's income. The huge gap between these ratios raises a cause of concern for our economic growth. In order to sustain the current economic growth and to achieve a given rate of increase in per capita income, we need a larger amount of investment. But the composition of population acts as an obstacle in capital formation.

Composition of Population:

In India, 35% of population is composed of persons less than 14 years of age. High birth rate and low expectancy of life means large number of dependents in the total population.

The 'working age population' is different from the 'working population', which is the number of people who are employed regardless of their age. The surplus in labor force has left the major portion of population without work or is working in a redundant manner such that worker productivity is essentially zero. Most of these people depend on others for subsistence. The group of people who are a part of the working age population but are not willing to work also contribute to the unproductive consumer base.

Unemployment:

Centre for Monitoring Indian Economy (CMIE) data shows that the unemployment rate in India has increased to 7.2% in February 2019 vis-a-vis 5.9% in February 2018. As per these figures, there were 14 million unemployed people in India as of July 2017, which doubled to around 29 million in October 2018. As of February 2019, India had around 31.2 million people actively looking for jobs, data shows.

Composition of Population:

In India, 35% of population is composed of persons less than 14 years of age. High birth rate and low expectancy of life means large number of dependents in the total population.

The 'working age population' is different from the 'working population', which is the number of people who are employed regardless of their age. The surplus in labor force has left the major portion of population without work or is working in a redundant manner such that worker productivity is essentially zero. Most of these people depend on others for subsistence. The group of people who are a part of the working age population but are not willing to work also contribute to the unproductive consumer base.

Unemployment:

Centre for Monitoring Indian Economy (CMIE) data shows that the unemployment rate in India has increased to 7.2% in February 2019 vis-a-vis 5.9% in February 2018. As per these figures, there were 14 million unemployed people in India as of July 2017, which doubled to around 29 million in October 2018. As of February 2019, India had around 31.2 million people actively looking for jobs, data shows.

The scarcity of jobs has forced a major section of the country to work at a cheaper rate.

Although, due to the availability of cheap labour, MNC's set up their business here, bringing much needed foreign exchange in to the country.

But the pros do not stand out the cons of excessive population.

Today, many jobs require advanced digital skills, financial literacy, and critical thinking. Without the foundations of education, employment prospects are slim.

For those with low literacy levels who do find work, it’s often unstable, low paying jobs with little possibility of career progression. Furthermore, children of illiterate and unemployed parents often inherit the same problems.

Personal and Social costs of Unemployment:

The personal and social costs of unemployment include severe financial hardship and poverty, debt, homelessness and housing stress, family tensions and breakdown, boredom, alienation, shame and stigma, increased social isolation, crime, erosion of confidence and self-esteem, the atrophying of work skills and ill-health. It puts more pressure on the resources and hence results into reduced productivity.

Implications of Population Explosion on Economic Growth:

The resource base of the economy can expand if adequate investment is done on their education, training and healthcare. India has a big youth population with about 65% of its total population under the age of 35. Thus, investment in human capital will have a positive impact on the economic activities of the country.

Another important aspect that needs to be taken care of by the government and the citizens, both, is controlling of the population explosion. The government needs to bring the Population Control Bill in the parliament and make certain laws to get control of this chronic issue. On the other hand, the social groups must undertake the initiative of raising awareness about the impacts of overpopulation and preventive measures against it.

Photo sources -

https://www.freepik.com/free-vector/coloured-bulbs-collection_894624.htm

https://images.app.goo.gl/Ye4aJnd35La6jMLu5

https://thumbs.dreamstime.com/b/unemployed-businessman-i-need-job-sign-vector-illustration-unemployment-crisis-employee-people-cartoon-character-business-172765668.jpg

https://thumbs.dreamstime.com/z/tramps-poor-homeless-characters-needing-money-beggars-group-begging-help-unemployment-homeless-jobless-concept-flat-tramps-153812330.jpg

https://images.app.goo.gl/JYXiNjnk35LhpJjN6