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Today's young India will grow old. We must prepare for huge fiscal challenges

As per Lancet’s projections for population in the year 2100, India will still have over a billion people, while China will have slipped to third position with 730 million inhabitants making way for Nigeria with 750 million population 

January 25, 2023 / 10:35 AM IST
Preparations will have to be made for an India that pays less taxes and wants to run down savings instead of setting them aside. (Image: AP/Representative)

Preparations will have to be made for an India that pays less taxes and wants to run down savings instead of setting them aside. (Image: AP/Representative)

India is now the world’s largest country by population — or, at least, it will be at some point during 2023. While this shift has been a long time coming, it arrived sooner than anyone expected because China’s population appears to have begun shrinking in advance of projections.

Undivided India and China have vied across history for the population crown. The partition of India in 1947 appeared to put China permanently ahead in the numbers game. But India’s new position will likely last into mid-century and beyond. The Lancet’s projections for population in 2100 suggest India will still have over a billion people, while China will have slipped to third position, with 730 million inhabitants to Nigeria’s 750 million.

Moreover, this shift of demographic weight from East and Northeast Asia to the south is likely permanent. A UN report points out that in 1980, 42% of Asians lived in East Asia; that proportion will be well under a third by 2050. Indeed, by that date almost half of Asians will be South (and Southwest) Asians.

From now until 2050, therefore, South Asia should enjoy an enviable demographic dividend, boosted by a rapidly growing working-age population. Former Asian Tigers such as South Korea used this same moment very effectively to transition to rich-country status.