World Population Day: Is India moving towards being an ageing economy?
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New Delhi: As India marks yet another World Population Day, questions will inevitably be asked about the burden or benefit of the country’s demography. This is particularly so as the country will witness an addition of roughly 50,000 more people on Wednesday, with India expected to overtake China in three-four years at the current pace.
However, even as the country is on a race to reach replacement levels (where births compensate for deaths, and population stabilizes) in northern India, ageing is already under way in many southern states, leaving the country with the potential twin burden of too many young people and too many old people concentrated in different geographies.
India’s working population (age 15-64) bulge began in the 1950s and ideally should have ensured a very low number of “dependents” (ages 0-14 and 65-plus) based purely on demographics, boosting growth and resulting in a so-called demographic dividend.
However, even as the people in the ideal age band increased, for every 100 workers there were 193 dependents in 1991. This number rose to 223 in 2001, based on census estimates, and has only worsened since as education and jobs remain big challenges.
Now, as the population of the elderly has begun to rise largely unnoticed since the mid-2000s (see Chart 1), particularly in the economic growth centres in the south, India’s real population concern may not be its sheer size but the age composition and geographic location of its people.
“In a majority of states, the window of economic opportunity is really closing,” said K.S. James, a population studies professor at the Jawaharlal Nehru University.
While India’s overall population would grow for another 20-30 years, much of the growth would happen in poorer states, resulting in a huge spike in internal migration. “We should prepare for the associated social stress,” he said.
With Kerala or Tamil Nadu far closer to Western Europe in terms of the fertility rate, and the Gangetic belt closer to Africa, a tiff similar to the ongoing international backlash against migration may play out within India, added James.
Besides, since India would hit the brakes on population growth much faster than most other countries, the elderly would also increase rapidly (see Chart 2). “We would have about 300 million old people by the middle of the century. That will become a huge issue,” said James.
Population will increasingly become a significant dilemma that the Indian union will have to confront, because of the emerging wide disparities between the west and the south, and the north and the east, said Vivek Dehejia, an economist and senior fellow at think tank IDFC Institute.
“It’s going to have wide implications for everything from future finance commissions to the next electoral delimitation exercise. The median age in southern states has already started rising,” he added.
At least in terms of economics, the path to addressing this emerging cleavage is clear, said Dehejia. “Jobs have to be created where the people are. Even when the population stabilizes, as people move through the demographic structure, the jobs problem won’t disappear overnight. There are going to job seekers for quite a few years to come, even when the population at the aggregate level has stabilized.”
