By Vihan Rawat
Thomas Robert Malthus, in his work An Essay on the Principle of Population in 1798, proposed the principle that human population grows exponentially while food production grows at an arithmetic rate. Going by the above proposition, many demographers forecasted a rapid growth in the world population to over 11 billion by the year 2050. However, declining fertility rates in many countries reduced the sum to a total of 9.8 billion.
Reasons for decline in fertility rate
India, like China, had a very high fertility rate, compiled with a substantially decreasing mortality rate till the mid 19th century. However, soon after independence, population programs aimed at family planning resulted in an impressive decline in fertility rates. Female literacy is on a rise and is positively correlated with a decline in fertility rates. At the same time, a hike in prosperity due to a rise in per capita income, and government measures to reduce poverty along with improvement in the public healthcare services has also reduced the need for a larger number of children.
The Economic Survey 2016-17 findings suggest that 12 Indian states out of reporting 23 states have reached the level of fertility that are below the replacement rate, 2.1 children per woman. The remaining states are also expected to reach similar levels by the end of this decade. Replacement rate is the total fertility rate the average number of children born per woman, at which the existing population replaces itself from one generation to the next without considering the impact of migration.
This dramatic change in the demography, undoubtedly has strong implications on Indias economic growth and cultural stability. It becomes significantly important for us to analyse these demographic trends in order to design and implement the new development agenda and frame the appropriate policies. According to the UN Population Division, Indias population ageing 65 and older is expected to rise to 14% in 2050 from the current level of 5%. A Report by Arokiasamy and colleagues (forthcoming) also expects a sharp rise in the old age dependency ratio from 12% in 2010 to 31% in 2050.
Future Implications of declining fertility rate
The Indian economy is one of the fastest growing economies in the world today, with a consistently rising GDP growth rate. Growth in GDP is a cumulative impact of twin forces growth in labour input and improvement in labour productivity. Growth in the former is dependent on the growth in the proportion of population that is of working age. A decrease in the number of working class members can obstruct the pace of GDP growth of a nation. According to a report by CRISIL, a leading credit rating agency, by 2050, the number of sexagenarians (those aged between 60 and 70 years) in the country will rise to 300 million.
Another point of concern is the retirement income and the medical care of the elderly population, which is largely financed by the taxes paid by the young working population. According to sociologist Phillip N Cohen, what concerns most people is not the rate of fertility, but the change in the rate and how dramatic it is. According to him, when fertility falls, a generation is smaller than the one that came before and struggles to support retirees. This would eventually lead to a smaller tax base, thus increasing the financial burden, ultimately impacting the fiscal deficit.
The cons of conservatism
A declining fertility rate also considerably impacts the growth in scientific innovations, research, and development activities, as innovations mainly come from younger individuals. Low fertility societies also put an extra burden on the environment due to a change in the consumption pattern. A low labour force in many European countries has also increased the pace of automation in many industries. These energy intensive technologies put an extra burden on the already exploited environment.
As Indias demography changes, so does its health profile. Of particular concern is the case of Non Communicable Diseases (NCD) like cardiovascular disease, diabetes, cancer, chronic respiratory diseases, eyesight problems etc. Along with these, cases of infectious and nutritional diseases are also rising. Yet, health insurance penetration in the country is merely 17%. According to a report by CRISIL, only 8% retirees in the private sector have pension, while 9 in 10 have no health insurance or assured income.
Moreover, an increasing elderly population also highlights issues related to financial security and independence of older woman. Special attention must be imparted in ensuring a sound legal framework and proper enforcement of womens property and inheritance rights. India must prepare itself for these future challenges. Policies must be formulated to create and expand income support for the elderly, and to increase the insurance penetration in the country. American demographer David E. Bloom suggests that India should invest hugely in imparting training to todays youth so as to lay the groundwork for increased economic productivity. This would cater to the needs of the growing number of elderly Indians in the future.