India’s booming population is set to coming to a grinding halt over the next two decades, as the country witnesses a sharp slowdown in population growth, the Economic Survey 2018-2019 revealed. Demographic projections show that India’s population growth will continue to slow rapidly over the next two decades, growing less than 1% during 2021-31 and under 0.5% during 2031-41

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Highlights of Population growth:

• Population experts have said that while India’s large population presents challenges in providing food, housing, jobs and other essentials, the country has entered a demographic stage when a plateauing of population and a subsequent decline in numbers is just decades away.
• 13 of the 22 major states TFR is below 2.1, meaning that these states, including those in the south, Himachal Pradesh, Punjab, West Bengal and Maharashtra are already quite advanced in their demographic transition, mirroring trends in countries with much higher levels of income.
• The TFR is expected to reach 1.8 in 2021 – similar to the current rate in France – and stabilise at 1.7, the stage where China, which is heading for a population decline, is now.
• States already below replacement level fertility will see a further decline to decline to 1.5-1.6. The survey estimates that the large poorer states of central India, like Uttar Pradesh, Rajasthan, Jharkhand and Madhya Pradesh are likely to reach TFR levels below 1.8 between 2021 and 2031.
• Some states like Tamil Nadu could witness population declines after 2031 unless there is migration from other states.
• India currently adds around 10 million people annually to the working age population; this increase is likely to decline to 4.2 million in 2031-41.

Positives of declining population growth:

• An increase in the share of a country’s working-age (15–64 years) can generate faster economic growth. The working-age population is generally more productive and saves more increasing domestic resources for
• Increased fiscal space created by the demographic dividend to divert resources from spending on children to investing in physical and human infrastructure
• Rise in women’s workforce that naturally accompanies a decline in fertility, and which can be a new source of growth
• Additional boost to savings that occurs as the incentive to save for longer periods of retirement increases with greater longevity
• Higher savings:
  • The younger population will have both more savings and higher spending due to the raising higher disposable income.
  • Higher savings along with better and more investment opportunities nowadays leads to higher household savings which increases the overall capital formation in the economy. This provides for future industrial investments and propels the economy into higher growth path in the long run.
• Higher income increases the effective demand in the market there by increasing the overall consumption and the market growth of business in the current period of time
• Outsourcing of jobs:
  • With the declining working age population in the other countries particularly developed countries, more jobs emanating from the developed countries will be outsourced and India can gain from it due to demographic dividend.
• Massive shift towards a middle-class society that is already in the making

Decreasing fertility rate and its challenges:

• The decrease in fertility and the associated decrease in the dependency ratio, in turn lead to an increase in the share of the population concentrated in the working ages and hence in the ratio of the working age to the non-working age population.
• Dependency ratio:
  • The proportion of workers rises sharply, even as the proportion of dependants falls. In many countries, the ratio of workers to dependents goes up, giving a huge boost to per capita income.
  • India will see a significant rise in working age adults India’s dependency ratio that is the number of dependents to working people is low at 0.6, compared with the developed countries. That ratio is going to decline further with fertility rates continuing to fall.
• For the next few decades India will have a youthful, dynamic and productive workforce than the rest of the world.
• A demographic trend where the proportion of persons aged 15-24 in the population increases significantly compared to other age groups which paired with limited employment opportunities may contribute to increased poverty, hunger, malnutrition, poorer health, lower educational outcomes, child labour, unsupervised and abandoned children, and rising rates of domestic violence.
• Education constraints:
  • There are serious problems with Indian higher education. These include a shortage of high quality faculty, poor incentive structures, lack of good regulation
  • India is home to the world’s largest concentration of illiterate people in the world
• Health:
  • At the primary level, there are also serious problems with health and nutrition that impact the effectiveness of education and the capacity for learning.
  • In future large proportion of older working aged people who face longer periods of retirement, accumulate assets to support themselves.

Way forward:

• Health and education parameters need to be improved substantially to make the Indian workforce efficient and skilled.
• Enhance, support and coordinate private sector initiatives for skill development through appropriate Public-Private Partnership (PPP) models; strive for significant operational and financial involvement from the private sector
• Focus on underprivileged sections of society and backward regions of the country thereby enabling a move out of poverty; similarly, focus significantly on the unorganized or informal sector workforce.
• Measures should have pan Indian presence and not just concentrated in metropolitan cities as most of the workforce is likely to come from the rural hinterland.
• Investing in people through healthcare, quality education, jobs and skills helps build human capital, which is key to supporting economic growth, ending extreme poverty, and creating more inclusive societies
• New technology could be exploited to accelerate the pace of building human capital, including massive open online courses and virtual classrooms
• Policymakers should have a greater incentive to redouble their efforts to promote human capital so that it can contribute to economic growth and job creation