Linking Demographic Dividend and Gross Domestic Savings: Role of Boomers in India's Journey of Economic Growth
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Abstract
India's demographic dividend offers an exceptional potential for economic growth, with the boomers significantly influencing the country's fate. Boomers entered in the workforce after 1995 lead in consumption, investment, and productivity in India. The boomers being technologically proficient are propelling entrepreneurship and boosting output across economic sectors of the country as their capacity to foster economic growth is intricately connected to their savings habit, which affects gross domestic savings (GDS). The gross domestic savings rate in India has varied over the years, shaped by macroeconomic factors including per capita income, rate of inflation, and interest rates among others. In this regard, the study using data from 1995-2020 and deploying time-series analysis finds that the boomers favoring high-yield investment opportunities and entrepreneurship, are transforming conventional saving behaviors and consequently India is shifting from consumption-driven growth to savings-driven growth gradually. However, the United Nation's classification of youth as NEET is presently a matter of concern for the country.