Baby-booming India August 2006
A ‘youthful’ India will inevitably age. There must be creation of wealth and productive employment today, to prepare for tomorrow’s dependency.
That India has a huge and growing population is hardly a secret – indeed, the argument that ‘we just have too many people’ has been part of popular debate throughout modern times. Unfortunately, the ability to constrain population growth is necessarily limited by two factors. The first is what demographers like to call ‘Population Momentum’. This refers to the fact that even after a country reduces its fertility to replacement levels – a rate at which successive generations remain about the same size – population continues to grow for a while before finally stabilising. In essence, the cause of Population Momentum is the birth of large numbers of children when fertility is still above replacement. These children then go on to reproduce, driving population increase. This means that even if India dropped to replacement levels overnight, it would still end up with a lot more than a billion people. The second factor is the mixed, heterogeneous nature of India’s society. In terms of demographics, there is a world of difference between, say, Kerala and Bihar. India’s populous BIMARU states* lag far behind the national average when it comes to controlling population size, and these state-level disparities have a large impact on overall population growth. Taking these facts into account, projecting population size into the future reveals that India will in fact grow even
faster than what most estimates (such as the United Nations projections) based on average national statistics suggest.
Back in the 18th century, English political economist Thomas Malthus published a famously pessimistic prediction: “The power of population is so superior to the power of the earth to produce subsistence for man, that premature death must in some shape or other visit the human race” – in essence, that the human population will eventually outstrip the food supply. While Malthusian theories on the effects of population growth and fears of a population bomb may well be unfounded, it would be foolish to deny the importance of understanding what India is going to look like in the years to come. It is, of course, not impossible to reduce the country’s final stable population through development, with quicker drops in fertility and mortality, and an increase in the age of marriage. In order for this to happen, however, careful attention needs to be paid to the few, yet populous, states that have resisted substantive change. The rising tide
India, and indeed all of Southasia, is undergoing a transition from a state of high fertility rates to one of stable population (see Table 1). This decline normally occurs only once in a country’s history, and will have a number of significant implications over the next few decades. The decline from a high fertility rate to one low enough to stabilise the population is referred to as the fertility transition; in such a situation the replacement level is a little above 2.0, whereas the figure for India is currently about 2.7. Fertility transitions are associated with growth and opportunity, but also represent severe challenges for the future. Countries that are undergoing a relatively sudden drop in fertility tend to experience what is referred to as a ‘baby boom’. India, where over 60 percent of the population is under 30 years of age, is seeing precisely this phenomenon (see Table 2). Over the next few years, the country has the rare luxury of a large and youthful workforce, as well as decreased old-age dependency in the population. This ‘bulge’ in people who are young and productive is a wonderful opportunity to grow quickly, and has certainly played a part in India’s recent increased growth. However, a country that is primarily young today will also be largely old tomorrow. A population in which a large number of people are either too young or too old to work places a heavy burden on the relatively fewer numbers who must support them. The graph in Figure 3 highlights the timeframe when the dependency levels in India’s population are expected to be low: beyond about 2025, India can expect to see a rising number of dependents. To understand the pressures that aging can place on a nation, we need only look around the world. The United States, for example, is currently struggling to ensure that its social security system will be ready to cope with the impending retirement of its baby-boomer generation. As a large fraction of American society prepares to leave the workforce, the implications on state finances, policy and public life are enormous. In Italy, for every ten workers there are a staggering seven pensioners, and over a third of pre-tax annual earnings by the working population is being used to pay pensions. Fast growth, and the creation of wealth and productive employment today, is therefore more important than ever before in India’s history. How well the country does in the next three decades is not merely about solving current problems, but also about insuring against the inevitable future challenges. One such challenge that has not been confronted is education funding. Successive Indian governments have talked for years about the need to increase spending on education. Spending at least six percent of the Gross Domestic Product (GDP) on education has been held up as the ideal. But India continues to spend under four percent of its GDP on education, and within that, a little under 1.8 percent of GDP on elementary education. This would be an unfortunate state of affairs at the best of times, but when looking at the age distribution of the country’s population, it makes for particularly poor public policy. The 2001 Census of India reported that over 22 percent of the population was between 5 and 14 years of age. As can be seen in Figure 3, which starts at 2001, the percentage of children who must be educated in schools will remain high for the next few years, before declining gradually as the population ages. Correspondingly, there will be an increase in demand for college and university education, vocational schools and technical training centres. An insufficient investment in education today will translate into an under-skilled workforce in the next few decades. The last thing that India can afford is to let this young workforce be held back by a lack of sufficient educational funding and opportunities. Retirement and marriage
As life expectancies have risen over the last half-century, societies have worked to define a reasonable retirement age that makes economic sense for their citizens. In India, 93 percent of the economy lies in the informal sector, and consequently the concepts of ‘retirement’ and ‘pensions’ are less significant here than in many other countries. Even so, the formal sector remains important, particularly as a middle-class employment option. Already, Indian retirement ages have been moved up from 58 to 60 in many sectors, and there is serious discussion on the possibility of raising it further. In higher education, for instance, allowing people to work longer might mitigate teacher shortages. In the near future, it is certain that a significant fraction of people over 60 will also be under 65. An increasing retirement age is therefore likely to have significant short-term effects. Some of these might be regarded as generally positive, such as a reduction in pension payments and an increase in experienced workforce. Others, such as the holding back of a younger workforce and the resulting unemployment, are much more worrying. In the case of the education sector, the availability of experienced teachers and a larger quantity of available teachers might be a very good thing. In other areas, however, the consequences of unemployment among the next generation could outweigh any short-term good that might result. It is therefore crucial to consider the balance of such effects across age groups, sectors and regions. Then there is the issue of marriage, for the problem of finding a mate, too, is a ‘policy’ issue. ‘Marriage policy’, for example, is crucial if the state is to work towards reducing the increasing imbalances in India’s sex ratio. The 2001 census in India reports a child sex ratio of 927 males for every 1000 females, with the figure being far worse in many regions (See accompanying story, “The absent daughters of Punjab” ). Shameful as this statistic is in itself, it is even more worrying when we look a little further into the future. A skewed sex ratio at birth today, combined with higher female mortality rates, inevitably results in an even more imbalanced situation 20 years in the future. This is also the time when people look to get married, and, in a monogamous society, a lack of women tends to have uniformly depressing consequences. Several recent studies have found that the presence of a large number of men who are unable to find a mate is a driving force for prostitution, increased crime (especially against women), the spread of HIV/AIDS and so on. In states like Punjab, for instance, women are already brought in from other parts of the country to make up the deficit that exists today. Yet as sex ratios continue to change in the wrong direction, this is a problem that is only going to get worse. India is currently at a very significant stage in its demographic history, and the deep-rooted ramifications of its fertility transition are being realised too late and too slow. The fact is that, over the next decade, people will become both India’s most valuable resource and its greatest challenge. As such, India’s policymakers in New Delhi and the individual states must confront the issue and study the trends realistically, in order to make intelligent decisions that will take the second most populous country in the world into the future.
Romila Thapar addresses invitees at the
Southasian relaunch of Himal Southasian,
IIC, New Delhi, January 2013.
The archive: 25 years of Southasia
China, Southasia and India
On May 19 2013, newly appointed Chinese Premier Li Keqiang arrived in New Delhi for a series of meetings with Indian Prime Minister Manmohan Singh. The visit is Keqiang's first outside of China since assuming power in March.
From our archive:
Purna Basnet discusses Chinese engagement in Nepal vis-a-vis security issues in Tibet and broader geo-strategic plans in Southasia (April 2011).
Fatima Chowdury relates the story of Calcutta's Indian Chinese community through the lens of political and economic upheavals in Southasia and China (May 2009).
Simon Long notes the importance of the Sino-Indian relationship for the rest of Southasia (September 2006).
J.N Dixit ruminates on the strategic concerns of the 'Middle Kingdom' in the wake of India's 1998 nuclear tests (June 1998).