What are the Costs of Population Decline?

Syllabus: GS1/ Society, GS2/ Governance

Context

• The varied demographic trends across Indian states raise significant concerns about their broader implications.

Demographic Trends in India

• Total Fertility Rate (TFR): Between 2019 and 2021, Andhra Pradesh, Telangana, Kerala, Punjab, and Himachal Pradesh recorded a TFR of 1.5.
  • Conversely, Bihar (3), Uttar Pradesh (2.7), and Madhya Pradesh (2.6) had higher fertility rates.
  • A TFR of 2.1 is considered the replacement level needed to maintain a stable population.
• Aging Population Concerns: According to India Ageing Report (UNFPA) the elderly population in India is projected to increase from 10.1% in 2021 to 15% by 2036. 
  • In Kerala the elderly population is 16.5% whereas in Bihar it is 7.7%, in 2021.

Implications of Aging Population

• Economic implications;
  • Increased Public Spending on Pensions with growth in elderly population.
  • Old Age Dependency Ratio: Indicates the number of older adults for every 100 people of working age (18-59 years). A ratio exceeding 15% signals an aging crisis. Some southern states have already crossed this benchmark.
  • Reduced Consumer Demand: An aging population tends to consume less compared to a younger, more active demographic.
  • Pressure on Healthcare Infrastructure: In 2017-18, southern states accounted for 32% of India’s total out-of-pocket spending on cardiovascular diseases despite having only one-fifth of the population.
• Political Implications;
  • Interstate Resource Tensions: Southern states, despite contributing significantly to tax revenue, receive a diminishing share of central resources due to slower population growth. 
  • Delimitation and Representation: The expiration of the freeze on parliamentary seats in 2026 will lead to a new delimitation exercise that will alter state representation in the Lok Sabha, influenced by population changes.
• Social implications: The burden of supporting a growing elderly population can create tension between generations.
  • Also there will be more requirements for alternative support systems such as community-based care.

Global scenario

• In Japan the median age is over 48 years. This demographic shift has led to prolonged economic stagnation, shrinking workforce, and increased public spending on pensions and healthcare.
•  China’s one-child policy, enforced from 1979 to 2015, significantly lowered the birth rate, leading to a rapidly aging population.
• South Korea has one of the world’s lowest fertility rates, at 0.78 as of 2022. 

Way Ahead

• Policy Adjustments: Policies should focus on supporting families through paid maternity and paternity leave, and employment practices that mitigate the “motherhood penalty.”
• Gender Equity: States and countries with better gender equity maintain more sustainable fertility rates, as women are more willing to have children if they retain economic independence.
• Strategic Support: Implementing work-family policies that align with modern socio-economic expectations will support fertility rates and ensure balanced demographic and economic growth.

Source: TH