Monday, January 02, 2006

Taking care of all ye folks

about a decade back, i remember thinking that the bane of my country is in the growing population. the city i lived in then is the same one that i do now. but lots have changed since. i grew up watching men n women living on the streets, bringing up kids... scores of them. how i used to wish the govt brought in a rule of only "one kid in a family".

now i realise what a mistake that could have been 10-20 years from now, had such a rule been imposed 10 years back. the economy has multiplied since. the infrastructure has improved. schooling standards have rocketed. the markets have been opened up. if the US has been the land of opportunities all thru the last 2 centuries, india is on the way to occupy that spot alongside the US, if not topple it.

economists say the engine behind this growth is the fact that the majority of the earning population in their 20-30s. developed countries like japan, uk n europe face a huge problem in the next 20-30 years. their working population is going to shrink. simply because, the families there do not have many children. as the working population ages and retires, there is going to be a lesser workforce that will takeover the jobs from them. there is going to be lesser revenues generated for their govt. in terms of taxes to take care of the medicare and pension plans of the retiring population... all because of the fact that families there are nuclear with only one kid, mostly (this makes the working population to halve in just one generation)

infact these govts are prodding their citizens to plan for bigger families, to reverse the trend atleast in time, if not earlier. china, i believe is planning the same. they had made a one child norm much earlier... well in the 1990s. so their population will follow the downward spiral that the european economies are falling into. this will be the case for china till 2050 when india will exceed their population. china plans to urge its citizens to plan for more than one child from then on.

given the advantage that india is in, it should not take a reactive measure when it catches up with this problem too. infact, even before this problem catches up, this might lead to a problem of plenty. too much population in the 20-40 age group, only without the right skillsets.

to handle the problem of plenty, it will add value to look at ireland.... how ireland shot to economic progress in just 10 years.. from 1980 to 1990. all that ireland did was to make college education free. afterall, economies need high skill jobs to be filled. no doubt the economy should be fundamentally strong to even assume that primary education is something that it doesnt need to be bothered too much about. this is something india is groping for in the dark. primary education is a problem too in the first place. but india does not have the time to make this area strong, and move on the the technical education that ireland made free to its population.

another 10-15 years that india might get stuck in perfecting its primary education system will be too much of an opportunity cost. india is no doubt a huge growth story, clocking 7-8% gdp growth year on year. it needs to have faith in its fundamental quality and take the risk of increasing its fiscal deficit, to subsidise technical education, if not make it free, apart from taking measures to perfect the primary education system (infact the complete schooling system).

that would be learning from a tried and tested method in ireland's policy.


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