Discuss the implications of inter-state variations in demographic trends in India. What policy measures should be adopted to harness demographic changes as an asset rather than a challenge?

Why?

While presenting the 2024 budget, Finance Minister promised a committee to study India’s population growth to ensure that the nation is on target to meet the Viksit Bharat goal by 2047.

Approach:

• Introduce your answer by emphasizing the necessity to comprehend inter-state demographic variations for achieving the Viksit Bharat goal by 2047.
• In the main body, discuss the demographic trends like variations in fertility rates and population growth briefly. Next list out the implications of demographic variations on population ageing, dependency burden, urbanization, economy, labour market, etc. Suggest policy measures like investments in skill development, encouraging women participation in labour force, elderly empowerment, etc.
• Conclude by stressing the importance of informed policy-making to transform demographic challenges into assets.

Answer:

India’s demographic landscape is marked by significant inter-state variations. Understanding the demographic diversity is necessary to effectively harness the potential of India’s vast human resource for achieving the ambitious Viksit Bharat goal by 2047.

Inter-state Variations in Demographic Trends in India:

• Variation in Fertility Rates:
  • Even though India’s total fertility rate has declined to 2, there are wide inter-regional variations with five states still not having achieved replacement-level of fertility of 2.1
    • Kerala achieved replacement fertility in 1998, while Bihar will get there only in 2039.
  • Population Growth: in the northern states is higher than in the southern states resulting in a demographic divide.
    • According to Census Estimates, northern states account for 43.2% of India’s population, while the southern states account for only 19.8%.

Implications of Inter-State Variations in Demographic Trends in India:

• Population Ageing: The ‘India Ageing Report 2023’ predicts that by 2050, approximately one-fifth of India’s population will comprise people aged 60 and above.
  • Southern and some northern states like Punjab and HP reported a higher share of the elderly compared to the national average in 2021, and the gap is expected to widen by 2036.
  • Bihar and UP will also see an increase, but it will remain below the national average.
• Dependency Burden: At present, states with higher fertility rates face a more significant dependency burden, with a larger proportion of children and elderly citizens.
  • In 2021, in Bihar, 44 working-age adults supported 100 dependents, while in Tamil Nadu, 50 adults supported the same population.
  • However, this will flip with the worker-to-dependent ratio changing to 47 in Bihar and 24 in Tamil Nadu by 2051.
• Differentiated urbanization patterns: A related trend where large inter-state differences are becoming noticeable pertains to the rate of urbanization across states.
  • By 2036, urbanization in Kerala, Goa, Sikkim, Nagaland would be comparable to developed countries. In Bihar, HP and Assam it would be less than 20%.
• Economic Disparities: States with a higher proportion of working-age populations can experience faster economic growth compared to states which have a higher dependency ratio.
  • Karnataka and Maharashtra have shown rapid economic progress compared to Bihar and UP.
• Inter-state Migration: lack of economic opportunities may drive migration from high-fertility to low-fertility states, impacting local economies and social structures.
• Healthcare Burden: States with a larger aging population require more healthcare resources.

Policy Measures Needed to Harness Demographic Changes as an Asset:

• Increased Investment in Education and Healthcare Infrastructure: focusing on gender inclusivity and access in rural and underdeveloped regions.
• Workforce Transition: By 2047, middle-aged workers will dominate the workforce, requiring investment in continued skill upgradation and on-the-job training for a technologically driven economy.
  • Expand Skill India initiatives focusing on state-specific needs.
• Gender Dividend Potential: Creating a welcoming labour market for women is crucial as childcare responsibilities decrease with declining fertility.
  • Improve the availability of childcare, possibly through creative combinations of Anganwadi and MGNREGA.
• Empowering the Elderly: With a growing elderly population, policies like raising the retirement age, enhancing old age pension schemes, and enabling asset monetization become imperative.
  • Japan’s successful elderly support measures can serve as a model.
• Refrain from Rapid Population Control Policies: China’s one-child policy led to an aging population and economic slowdown. India should avoid panic, let fertility decline naturally.
• Encourage Inter-state Cooperation: to address issues like unemployment in youth-dominant states and labor shortages in aging states, manage migration flows and address regional disparities.
  • Resource allocation through the 16th Finance Commission should consider these challenges.

The decision to set up a high-powered committee to evaluate the challenges posed by demographic transformation in conjunction with the 16th Finance Commission will allow its recommendations to flow into government spending priorities, creating a virtuous cycle.

‘+1’ Value Addition:

• According to Technical Group on Population Projections, by 2036, there will be a generational divide between India’s north and south.
• Tamil Nadu will be India’s oldest state, with a median age of over 40, Bihar was and will remain India’s youngest state, with a median age under 30. The median Indian will be 34.7 years of age in 2036.