Demographic Environment:

   Demographic Environment:

This is of vital importance to businessmen because the size of the market depends upon the size of population. Business monitor is population because business is people and they create markets. Business people are keenly interested in the size and growth rate of population across the different regions, age distribution, educational levels, household patterns, mixture of different racial groups and regional characteristics. Population has many demographic dimensions such as; growth rate, age, sex, density, educational qualification etc. India today possesses about 2.4% of the total land area but she has to support about 17 percent of the world population. At the beginning of twentieth century, India’s population was 236 million which became 1027 million in the year 2001. A study of the growth of India’s population reveals the following four Phases:

1891-1921 Stagnant

1921-1951 Steady

1951-1981 Rapid Growth

1981-2001 High Growth with definite sign of slowing down

A very significant phase of India’s population lives below the poverty line. From business environment point of view, their demand is insignificant. However, it has various other implications. To solve the basic problems, the additional employment is to be created; the additional houses to be built, social services like education and health are to be created. This again has tremendous business opportunities. In addition, a rapidly increasing population indicates growing demand for many products. High population growth also indicates a growth in the labour supply and availability of cheap labour. The availability of skilled and cheap labour force encourages foreign investors towards India and China.

Another important aspect of demographic studies these days is Human development Index (HDI). Economic growth contributes most to poverty reduction when expands the employment, productivity and wages of poor people and when public resources are channelled to promoting human development. A virtuous cycle of economic growth and human development can be witnessed if growth generates employment and income along with health and happiness. Human Development Index measures the average achievement in three basic dimensions of human development:

a.       Life expectancy at Birth,

b.      Literacy Ratio and enrolment Ratio in Schools

c.       Per-capita Gross Domestic Product

A simple average of these three indices gives HDI, UNDP has classified countries into three categories of High, Medium, and Low range

The data collected for 177 countries placed India at number 138 in HDI in 1994, has improved its position to 127 in 2002. This shift in HDI affects the business significantly. Similarly sex distribution also affects occupational distribution. Gender Development Index (GDI) measures inequalities on the basis of gender. In GDI three measures are taken:

a.       Female Life Expectancy

b.      Female Adult Literacy and Gross Enrolment Ratio (GER)

c.       Female per-capita income

GDI index will be lower than HDI when Gender inequalities exist. India has been classified into countries with High Gender Disparity. Businesspersons may therefore create more jobs for women to fully utilised labour without sex discrimination.

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