India’s People Problem! We are not far from the day when we will be short of people!

MOHAN GURUSWAMY:

India’s People Problem! We are not far from the day when we will be short of people!

The demographic dividend might just end up as a demographic nightmare. I have long been speaking and writing about the demographic dividend. Politicians and their hucksters have latched on to this term without quite understanding what it implies. The challenges are on hand. 

India, with a population of 1.34billion is now the most populous country in the world. But India was not always as large as it is now, both in terms of population or economy. The year 1921, known as the “Year of Great Divide”, is regarded as most important in the demographic history of India. It marked a drastic fall in mortality and the swing from a pattern of a relatively stable population to one that was rapidly increasing. The population grew very slowly from 1801-1921 from about 200 million to 220 million.  It is then our population really took off to reach the stratospheric levels of today 

The population growth rate reached a high in 1981, touching 2.22 percent, a trend that has since been on a decline. Over the span of just about one century, India’s population increased by as much as six times. Estimates suggest that India has added approximately 200 million people since the turn of the last century. We can look forward to another 2-300 million by midway this century.

Medium variant projections proposed that during 2005-50, India’s population will increase by approximately 45 percent.  The proportion of aged persons (over 65 years old) will increase from the 5 percent to 14.5 percent in 2050, which in absolute numbers would imply a change from 57 million to 240 million. From the experiences of advanced ageing nations we can infer that a growing old age population will require us to plan our policies on taxation, social security and healthcare to provide for them, among other things.  Old people cost more.

Another major area of concern is the fast increasing population density. This is estimated to go up from 345 per sq. km in 2005 to 504 per sq. km in 2050. Juxtaposing this with the increasing urbanization trend   indicates a plethora of problems in the years to come. In 2000, only 28.7 percent or approximately 300 million people lived in urban areas; whereas, it is projected to go up to 40.7 percent of the population or approximately 600 million persons by 2030. 

This huge increase in not only urban centre’s but also urban population, particularly given the rising economic power of the middle and working classes, will require provisioning for substantially enhanced housing and urban infrastructure such as water, sewage, mass and rapid transit, traffic management and parking, energy and a much increased consumption of food items such as milk, milk products, processed food and horticultural produce and their efficient distribution. Given the present state of housing and infrastructure in our urban cities, providing for a hugely increased urban middle-class cohort will be a massive task that will call for strong and imaginative forward looking policies and purposeful decision making. Urban development is capital intensive.

The 15-64 years age group is projected to increase from 62 percent in 2005 to about 67.3 percent in 2050, which in numbers means 700 million to 1120 million. India is at present adding 12 million people to the work force every year. This accretion to this age group will be rapid till 2030, after which it begins to decline so much so that during 2045-50 there is hardly any increase, signalling a stabilization of the 15-64-population cohort and subsequent aging. This is the natural cycle as the population stabilizes. The immediate challenge of the next three decades is to create tens of millions of jobs and then to cope up with a sharpen decline in workers. As China is experiencing now.

The demographic definition of population stabilization means constant birth and death rates over a period of time. More specifically, a population will be termed to attain stability if it achieves replacement level of fertility of 2.1.  The NPP 2000 envisages that India should achieve a stable population by the year 2045; a goal based on the assumption that the country would have had reach the population replacement level TFR 2.1 by the year 2010. We missed that. Recent data on TFR however indicates a postponement of this target and the health ministry is now looking at 2060 as a plausible target for population stabilization. It would be pertinent to mention here that attaining demographic stabilization comes much after reaching the replacement level fertility.  

An exercise carried out by the Technical Committee on Population constituted by the Planning Commission in 1996 reveals that India will reach replacement level fertility only by 2026. Amongst the Hindi speaking states Bihar would reach replacement levels only by 2039, Rajasthan by 2048 while Madhya Pradesh would go beyond 2060 and Uttar Pradesh beyond 2100. We should not expect national population stabilisation before 2060 or 2070.

These regional disparities manifest themselves in the alarming growth of projected populations in these states Out of the addition of 773 million to India’s population during 1991-2050, Uttar Pradesh alone would account for a huge 198 million, which is about a fourth of the entire national population increase. Bihar, Madhya Pradesh and Rajasthan cause density rates to hike and are hence expected to cause population pressures in major migration destinations, mainly the metropolitan cities and where there are concentrations of industry. Clearly, something needs to be urgently done to check population growth in these states. Given the condition of the governments in these states, this is easier said than done.

Let us take a peek into how the per capita GDP will look in the years to come. In a 2005 paper “Will India Become an Economic Superpower, Does It Matter & What Might Prevent It?”, Stephen Howes, Lead Economist (India) at the World Bank, makes per capita income projections to 2050 on the basis of historic growth rates. This indicates that Bihar, Orissa, UP, MP and West Bengal will have incomes of less than US$1000 in 2050, which is less than the current per capita GDP and definitely well lower than what will be in 2050. Not surprisingly these are the states that will see surging populations. This differential in incomes across the states will have serious implications on redistribution policies and, going by present experience, might cause civil unrest as people move from relatively poor to relatively richer states

In 2020, India had more than 245 million people in the 15-24 age segments. If savings rates hold and with productive potential at its peak in 2020, we will have a great window of opportunity to make it as a developed and prosperous economy by 2050 if we are able to educate and empower the masses. Such a demographic constellation will never appear again. If we have to break out of the poverty trap in the next half a century, the time to make major investments in human and economic development is now. But there is no sign of that. 

Mohan Guruswamy

Email: mohanguru@gmail.com