Shift in Indian Demographics

Social Issues Population Issues

Recently released statistics have shown a change in demography of India as for the first time in its history, India has reached a TFR (Total Fertility Rate) of 2.18, which is below the average world replacement rate of 2.3, as per the latest NFHS-4 data.

Background :

The general opinion about Indian demography has been mainly about the young workforce, which is bound to give dividends to India. However, the data from the 4th National Family Health Survey (NFHS-4) 2015-16 for the survey period 2013-15 has signaled a monumental shift in modern Indian demographics, as India’s total fertility rates have seen a change. With the Total Fertility Rate now below the replacement rate, Indian population growth has moved past its peak. It signals that the growth of number of youths in the country is on the decline, as the population pyramid has inverted for the first time ever. As can be seen in the population pyramid chart, from NFHS 4, there are fewer babies being born over the last 10 years. The percentage of children under the age of 15 declined from 35% in NFHS-3 (2003-05) to 29% in NFHS-4 (2013-15). In contrast, the population of those aged 60 years and older increased slightly, from 9% in NFHS-3 to 10% in NFHS-4. It shows there are not enough young people coming into India to replace the current population. Changing Age Composition: The share of India’s young, i.e. 0-19 years, population has already started to decline and is projected to drop from as high as 41% in 2011 to 25% by 2041. The share of elderly, 60 years and above, population will continue to rise steadily, nearly doubling from 8.6% in 2011 to 16% by 2041.India’s demographic dividend will peak around 2041, when the share of working-age, i.e. 20-59 years, population is expected to hit 59%. This highlights that India would lose its young country advantage sooner than expected and the expanding share of dependents would further increase the burden on the state and the economy.

Implications of this change :

Increasing dependents in the society- India may lose demographic dividend and stare at a situation where a large number of populations will be dependent including old age. Double burden on the government- The twin challenges of rising population and old age dependents will only add to India’s troubles of providing jobs, education, health along with geriatric care. Create economic challenges- Additional jobs will need to be created to keep pace with the projected annual increase in working-age population of 9.7 million during 2021-31 and 4.2 million during 2031-41.The country’s working-class population would have to create enough wealth for the growing segment of longer-living senior citizens that will increasingly rely on pensions. Already, the country is facing job shortage and losing the demographic advantage would put India at a loss compared to other developing countries.

Challenges in dealing with this demographic shift :

Difficulty in raising resources- due to jobless growth, lack of quality jobs and a slowing economy. Nascent geriatric care - Geriatric care is conspicuously missing from the medical education curriculum. Similarly the nursing and other paramedical staff members are not formally trained in providing care for elderly patients. Very few hospitals provide inpatient geriatric care. Although, there are number of old-age homes, day-care centers and mobile medicare units that provide care to the elderly population, but they are urban-based, expensive or focused on tertiary as opposed to primary care. Lack of involvement of all stakeholders- the government and the private sector, through CSR initiatives, aren’t doing more for the aged. There are start-ups and NGOs that are trying to care for the elderly, but they are also in their nascent stages.

Measures which need to be taken :

Need to have decentralized models of development- Social policies for each state must be differentiated to accommodate different rates of population growth. The populations in south and west India are growing at a much slower pace than in the central and eastern states. Need to utilize the energies of all sections of society-including women and senior citizens too. According to IMF research, raising women’s participation in the labour force to the same level as men can boost India’s GDP by 27% and contribute additively to India’s GDP growth every year. Government driven programs should also target people between the ages of 60-75 so as to ensure they remain employable. Need to improve social security architecture- by incentivizing investments and savings in retirement schemes, pension funds etc. The focus should be on informal sector, which constitute the majority of workforce. India’s social security shortfall will increase from $3 trillion in 2015 to $85 trillion in 2050, which needs to be addressed. Government can also consider increasing the retirement age to capture this changing trend. Fewer jobs are labour-intensive these days, while rising life expectancies are encouraging longer working lives, and today’s higher incomes are also encouraging people to work for longer. Fostering these trends can help the economic growth of those nations at the forefront of ageing impacts – as is especially true of Hong Kong, Taiwan, Singapore, Korea and China.

Conclusion :

Demographic dividend without investments in human capital will be a wasted development opportunity, and it will further widen economic and social gaps, instead of narrowing them. Investing more and more efficiently in people will enable India to tap into its demographic divided and prepare the country for the future.

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