The trajectory of India's demographic landscape is rapidly changing, with profound implications for our society and economy. The recent study by Lancet on global fertility rates has sounded the alarm, highlighting the concerning decline in India's total fertility rate (TFR) over the past century. From 6.18 children per woman in 1950 to a projected 1.29 children per woman by 2050, the numbers paint a picture of a nation on the cusp of a major demographic transition. Notably, India has already fallen below the replacement level of fertility required for a population to sustain itself, with its TFR reaching 1.91 children per woman in 2021 – below the necessary replacement fertility level of 2.1.
The rise of female literacy and women’s participation in the workforce coupled with changes in the inter-generational wealth has led to the slowing down of the Total Fertility Rate (TFR) particularly in Urban areas with the average age of first pregnancy shifting from the mid-20s to the mid to late 30s. As a case in point, the increasing demand for In Vitro Fertilisation (IVF) treatments indicates the growing prevalence of infertility issues. Projections indicate that the IVF market could surge to Rs 30,000 crore by 2030, a significant rise from Rs 6,400 crore in 2020. The varied Total Fertility Rate (TFR) across Indian states poses a twist to this challenge for the country's planners. There are now only five states that have a TFR above the replacement level of fertility of 2.1 children per woman: Bihar (2.98), Meghalaya (2.91), Uttar Pradesh (2.35), Jharkhand (2.26), and Manipur (2.17). Evidence suggests that certain regions in South and West India are ageing at a faster rate compared to those in the North.
Policymakers must grasp the complexity of this demographic shift and prepare accordingly.
With more households increasingly turning nuclear, the issues of gender disparities in household responsibilities to enable women to balance careers with motherhood effectively need prime focus. Given India’s low female workforce participation, the ability to bring women in the formal economy is critical to address the sustainability of Indian economic development. It cannot happen just as “men and machines”, for it needs women in the overall nation building narrative. Greater male engagement in household activities is crucial for creating an environment where women can pursue their professional ambitions without sacrificing family life and also underscore the need for targeted interventions to support families prime amongst which is childcare and taking care of the elderly.
Drawing from the historical context of developed nations, it's evident that once fertility rates dip below the replacement level, reversing the trend becomes immensely challenging. With India's TFR currently hovering at 1.9, just below replacement, urgent policy development is required. According to UNPF estimates, the share of India's working-age population will peak in the late 2030s or early 2040s. Policymakers must seize this critical window to maximise India's demographic dividend, to proactively address the challenges posed by an ageing population and declining fertility rates.
In the coming three decades, India's demographic makeup will additionally undergo a significant shift, transitioning from a demographic dividend to a silver economy. In the future, India is set to be a country with a large number of geriatrics. A latest analysis by US non-profit Population Reference Bureau’s projects that between now and 2050, India’s population aged 65 and older will grow by 14.4 crore. Currently, almost 68 per cent of Indians fall within the age group of 15-64 years. With the peaking of population growth by 2050, a lot many more of us will be in the bracket of Senior Citizens and above. This projection comes with several challenges prime amongst which is geriatric care and availability of adequate healthcare facilities. It is also a forecast that with increasing urban migration, many more Indians will be residing in metros adding to this challenge and that with non-communicable diseases, such as diabetes, cardiovascular diseases, and cancer rising, there will be additional strain on healthcare and family support both. Yet again we see varying ageing population across Indian states: By 2036, one in five people in India’s southern states will be elderly. These have implications on the economic contribution of those who age, and the duty of the state to care for its aged, and the non-productive labour population.
While the challenges of a growing ageing population may seem distant, it is crucial for the nation to proactively prepare for them now. Despite the declining fertility rates, the United Nations anticipates India's population to surpass 1.6 billion by 2050. While a large population poses its own set of challenges, policymakers have long recognised the economic advantages of India's youthful demographic, commonly referred to as the demographic dividend.
However, there exists an urgent need to capitalise on this advantage to avoid falling into the middle-income trap. The consequences of inaction are dire. A shrinking workforce, coupled with an ageing population, threatens to strain our economy and social fabric. Already, signs of demographic shifts are evident, with certain regions greying faster than others.
Policymakers must anticipate these changes and develop comprehensive strategies to mitigate their impact. Key among these interventions are economic policies that stimulate growth and job creation. As India's demographic dividend transitions into a silver economy over the next three decades, it is essential that we invest in sectors that will provide opportunities for our youth and support a thriving workforce. Moreover, geriatric healthcare and support systems, social security, pension reforms are essential to ensure the well-being of our ageing population and alleviate the burden on future generations.
Each of these policies are long-gestation for their development and positive impact. That is why the polity and policy makers must act decisively, now, to harness India's demographic potential and pave the way for a stronger, more resilient society. The time to act is now – for the future of India depends on the decisions we make today.
Dakshita Das, Policy expert & former civil servant
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Dr. Srinath Sridharan, Policy Researcher & Corporate advisor
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