Costs of population decline
Nov. 10, 2024

Why in news?

The Chief Ministers of Andhra Pradesh and Tamil Nadu recently voiced concerns about low fertility rates in their states. Andhra Pradesh Chief Minister announced plans to introduce legislation aimed at incentivizing families to have more children.

This initiative reflects the growing worry over demographic challenges, as both states face declining birth rates that could impact future economic growth and social stability.

What’s in today’s article?

  • India’s Shifting Demographics: Ageing Population and Fertility Trends
  • India’s Ageing Crisis and Socio-Economic Challenges
  • Alternative Approaches to Addressing Low Fertility in Southern States

India’s Shifting Demographics: Ageing Population and Fertility Trends

  • Impact of Family Planning Success on Ageing Population
    • Decades of successful family planning policies in India have resulted in slower population growth but have also led to a rapidly ageing population, especially in some regions.
    • The shift poses challenges as the elderly population grows, impacting economic and social systems.
  • Declining Fertility Rates in Southern and Smaller Northern States
    • Fertility rates, or the average number of children born to women during child-bearing years, have declined sharply in southern states like Tamil Nadu and West Bengal (1.4 between 2019 and 2021), as well as in Andhra Pradesh, Telangana, Kerala, Punjab, and Himachal Pradesh (1.5).
    • States with lower fertility rates typically experienced faster development.
  • Higher Fertility Rates in Northern States
    • In contrast, states like Bihar, Uttar Pradesh, and Madhya Pradesh still have relatively high fertility rates (3, 2.7, and 2.6, respectively), indicating a slower demographic transition and a younger population structure.
  • Projected Growth in India’s Elderly Population
    • According to the India Ageing Report (UNFPA), India’s elderly population is projected to increase from 10.1% in 2021 to 15% by 2036.
    • Kerala, Tamil Nadu, and Andhra Pradesh will see a particularly advanced demographic shift, with elderly populations expected to comprise 22.8%, 20.8%, and 19% of their populations by 2036.
    • In Bihar, however, the elderly will make up only 11% by 2036.

India’s Ageing Crisis and Socio-Economic Political Challenges

  • India’s Accelerated Demographic Transition
    • India’s demographic transition is advancing faster than its socio-economic development.
    • The key measure here is the old age dependency ratio, which indicates the number of older dependents for every 100 working-age individuals (18-59 years).
    • According to Associate Professor Srinivas Goli, an ageing crisis sets in when this ratio exceeds 15%.
  • States with High Old Age Dependency Ratios
    • Several states have already crossed this threshold, including Kerala (26.1 in 2021), Tamil Nadu (20.5), Himachal Pradesh (19.6), and Andhra Pradesh (18.5).
    • This implies that these states’ demographic dividend—the economic benefit from a younger workforce without high dependency—has largely ended, increasing pressures on healthcare and social services.
  • Healthcare Burden of Ageing Populations
    • Ageing states face mounting health expenses.
    • For instance, a 2017-18 study showed that the southern states, with only 20% of India’s population, accounted for 32% of the country's out-of-pocket spending on cardiovascular diseases.
    • On the other hand, eight Hindi-belt states, home to 50% of the population, spent only 24%.
  • Economic and Gender Implications of Increasing Fertility
    • While some state leaders propose boosting fertility rates to counter ageing, this could reduce women’s participation in the workforce, potentially hindering economic growth.
    • Southern states also argue that despite their economic contributions and higher tax revenue, they receive a smaller share of central resources due to slower population growth, raising concerns over fiscal fairness.
  • Impact of Uneven Population Growth on Parliamentary Representation
    • With the freeze on parliamentary seats expiring in 2026, a new delimitation exercise will adjust Lok Sabha representation based on population shifts, impacting the federal structure.
    • According to a study, states with higher population growth, like Uttar Pradesh, Bihar, and Rajasthan, are expected to gain seats (12, 10, and 7 respectively).
    • Meanwhile, states with slower growth, including Tamil Nadu, Kerala, and Andhra Pradesh, are projected to lose seats (9, 6, and 5 respectively) due to their declining share in the national population.

Alternative Approaches to Addressing Low Fertility in Southern States

  • Limitations of Pro-Natalist Incentives
    • Southern CMs are proposing incentives to encourage higher fertility rates. However, analysts warns that such approaches have seen limited success globally.
    • Educated women are unlikely to respond to forced fertility incentives that fail to address real family needs.
  • Recommended Policy Changes for Sustainable Fertility Rates
    • Experts advocate for work-family policies that support gender equity, including paid maternity and paternity leave, accessible childcare, and employment policies that eliminate the “motherhood penalty.”
    • These changes could help women maintain economic independence, making them more inclined to have children.
  • Alternative Solutions: Extending Working Lifespan and Migration Policies
    • Increasing the working lifespan could help reduce the old age dependency ratio.
    • Southern states, already economic hubs attracting migrants, face challenges as migrants often rely on the social services of destination states.
    • On the other hand, they are being counted in their home states for political and financial allocations, straining resources in southern states.
    • A suitable migration policy is needed to address this issue.