(a) With falling fertility rate and rising median age, how can India translate demographic dividend to economic dividend? 20 (b)…

(a) Turning the demographic dividend into an economic dividend

India's total fertility rate is now about 2.0, below the replacement level, and the median age is near 29. The working-age share is rising and will peak in the 2040s, so the window for gain is limited to a few decades, and it is closing earliest in the southern states.

(i) Health and nutrition. Healthy young workers are productive. Anaemia, stunting and poor maternal health must be tackled through Poshan Abhiyaan, Ayushman Bharat and better primary care.

(ii) Education and skills. Learning outcomes are weak, so foundational literacy and numeracy, the National Education Policy's reforms, vocational education, apprenticeships and PMKVY-type industry-linked skilling are needed to raise employability.

(iii) Jobs. The economy needs large numbers of productive non-farm jobs. Labour-intensive manufacturing (textiles, electronics, footwear), services, construction and MSMEs, backed by PLI schemes, the labour codes and export competitiveness, can absorb entrants, together with formalisation and start-ups.

(iv) Women. Female labour force participation is about 40 per cent, well below men's, and raising it through child care, safe transport, skilling and equal pay would add substantially to output.

(v) Regional balance. The states differ: Kerala and Tamil Nadu are ageing and need geriatric care and pensions, while Bihar and Uttar Pradesh still have a growing youth bulge and need jobs and migration support.

(vi) Savings and ageing. Pension coverage, through schemes such as the Atal Pension Yojana, and financial inclusion, raise savings and prepare for an older population.

Without jobs and skills, the dividend turns into a burden of unemployed youth. Convert it through investment in people and in job creation together.

(b) Urban planning in India as a constraint on the economic gains of urbanisation

Cities produce over 60 per cent of India's GDP, and agglomeration should raise productivity, but poor planning holds this back.

(i) Constraints. Master plans are outdated, rigid or ignored. Restrictive floor area ratios and zoning push cities outward into sprawl and raise house prices, leaving about one in six urban residents in slums (Census 2011) and many more in informal housing. Trunk infrastructure (water, sewers, transport) lags, so there are traffic jams, floods, as in Bengaluru and Chennai, and pollution. Land markets are distorted by rent control and poor titles. Municipal bodies are weak in finance and staff, despite the 74th Amendment, and are split among many agencies. Planning is often project-based, like the Smart Cities Mission, rather than city-wide.

(ii) Consequences. Logistics costs rise, workers spend hours commuting, firms lose productivity, and there is congestion in the largest cities while small towns stagnate.

(iii) Good practices. Ahmedabad's town planning schemes, which pool land and return a part as serviced plots, Surat's flood and health governance, and metro rail and transit-oriented development.

(iv) Assessment. The planning failure is indeed a major constraint, but not the only one. Municipal finance, governance, land law and rural-urban links also matter. Reforms should include planning by metropolitan regions, empowered city governments with own revenue, flexible FAR, rental housing, and data-driven planning.

(c) Salient features of India's trade policy and the trade balance with China

Trade policy.

(i) Foreign Trade Policy 2023 aims at exports of US$2 trillion by 2030, using a shift from incentives to remission of duties and taxes, export promotion through districts as export hubs, streamlined procedures and digital processing, and support for e-commerce exports and MSMEs.

(ii) Domestic manufacturing. Make in India, Atmanirbhar Bharat, PLI schemes and selective tariff increases to substitute imports and join global value chains.

(iii) Trade agreements. India has agreements with the UAE, Australia and others, and is negotiating more, such as with the EU and the UK, while staying out of RCEP.

(iv) Facilitation. SEZs and export-oriented units, the Sagarmala programme and rupee trade settlement.

Trade balance with China. India's trade deficit with China was about US$83 billion in 2022-23, about US$85 billion in 2023-24 and about US$99 billion in 2024-25. India exports raw materials and intermediates such as iron ore, cotton, marine products and petrochemicals, and imports electronics, machinery, telecom equipment, solar cells, chemicals and bulk drug ingredients. The deficit reflects dependence on Chinese inputs, and is being addressed by PLI, quality control orders, anti-dumping duties and diversification of suppliers.