In a bid to maximise gains from a large working-age group, the Centre's proposed committee on population is likely to focus on two related issues -- elongating the current demographic dividend India enjoys, and measures to tackle rapid ageing in the country, a government official said.
A country with both increasing numbers of young people and declining fertility has the potential to reap a ‘demographic dividend’ – a boost in economic productivity that occurs when there are growing numbers of people in the workforce relative to the number of dependents, as described by the United Nations Population Fund.
In the interim Budget for 2024-25, Finance Minister Nirmala Sitharaman said that the central government will form a high-powered committee for an extensive consideration of the challenges arising from fast population growth and the resulting demographic changes. Though no further details were provided in the annual financial statement on the mandate of the panel, the official said that deliberations on “fast population growth” largely refers to steps that can be taken to arrest a fast ageing population.
At a time when India is aiming to be the third largest nation by 2027-28 with a $5-trillion economy, sustaining this young demographic dividend is key. According to this official, "there are concerns that since the demographic transition is already underway, by 2055, the country may lose the population advantage. So, we need to make the best of these 25-30 years that we have."
The longevity of the demographic dividend is one issue, and ageing is another that the committee will address, which is in line with India's vision to plan for the end of Amrit Kaal, the official added.
India surpassed China to become the world's most populous nation in 2023, based on United Nations (UN) projections. The country's population is now at 1,428.6 million people.
Around 68 percent of India's population belongs to the 15-64 years category, and 26 percent in the 10-24 years group, making India one of the youngest countries in the world.
India's current median age, at around 29 years, is at least a decade younger than China and other advanced economies, and this relative position is likely to be similar in 2030. Furthermore, by 2030, India's population pyramid will show a bulge in the 25-45 age group – the key consuming demographic – which has historically coincided with consumption booms in other economies with similar demographic profiles. China's age composition, on the other hand, is skewing towards an older profile, Barclays said in a research report last year, citing UN forecasts.
At the same time, Barclays warned that the country is also approaching the period of its peak demographic dividend: as a proportion of the total population, India's working-age population is expected to peak by 2030. And while the number of births will likely outpace deaths in the very long term, the rate of increase in net population is slowing as India's fertility rate is already below the replacement level of 2.1.
"Thus, the window for reaping the demographic dividend for India will not be open indefinitely. At the same time, India's demographics are not uniform across states. States with higher per capita incomes have fertility rates at levels similar to those seen in advanced economies (below replacement rates), while states with lower per capita incomes have higher fertility and higher population growth rates – implying that the opportunity for reaping the demographic dividend is also distributed unevenly," the report said.
The fertility rate in India has been on a steady decline. The National Family Health 5 Survey (2019-21) found that India's Total Fertility Rate at 2.0 children per woman is currently below the replacement level of 2.1 and lower than 2.2 in 2015-16.
Total Fertility Rate refers to the average number of children a woman would have by the end of her childbearing years if she bore children at the current age-specific fertility rates.
The committee may also look at fertility patterns across states to target incentives to those areas that exhibit a lower rate of childbirth, this official said.
The 2019-21 survey showed that while the average Total Fertility Rate in the central states of Chhattisgarh, Madhya Pradesh, and Uttar Pradesh stood at 2.05 children per woman, in the Southern provinces, including Tamil Nadu and Karnataka the rate was lower at 1.43.
Among states, the highest fertility rate was recorded in Bihar with 2.98 children per woman, whereas Sikkim at 1.05 was at the lowest.
And, unsurprisingly, there are no plans to discuss measures aimed at curbing population in any way along the lines of what was implemented by the former most populous nation China with their one-child policy, the official said.
The official added that though the Centre has announced the proposal to form this committee on population, the panel is unlikely to be functional before the full Budget is presented around July after general elections in the country scheduled in April-May 2024.
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