Sunday, April 10, 2011

Not just the white man, seems that economists also speak with forked tongue. All this time time when the rest of India blamed the Hindi belt for uncontrolled population growth we were told that this was a ' demographic dividend ' which was a good thing. While population was aging in other countries including China, India had an unlimited supply of young people to augment the work force. More young meant more people to pay taxes which, in turn, meant more money to care for the elderly. While the elderly spend mostly on health care young people spend on consumer goods, new housing and travel. This, it was argued, stimulates manufacturing, the housing sector and tourism industry. All in all, a very good thing. A recent census shows that numbers between o-6 years of age declined by 4.1% in UP, 2.3% in Bihar, 3.5% in Rajasthan and 3.4% in MP. In today's Sunday Times, economist Mr Aiyar calls this a ' demographic dividend ' standing the entire argument on its head. He says that less children allows parents to work thus augmenting the work force. This raises income and savings to fuel more investments. He quotes an IMF working paper by his son Shekhar Aiyar and Ashoka Mody which suggests that up to 40% of the GDP growth since 1980 has been due to falling population growth. Spending on private education has also risen. Just because the article was written by his son does not make it wrong. This is precisely what I have been writing for months. Unfortunately criminal politicians reward more children by doling out taxpayer money because it is easy to collect votes from legions of naked aam aadmi. This keeps them khas.

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