Healthcare costs are likely to rise significantly in countries with aging populations. File | Photo Credit: The Hindu
The story so far: The Chief Ministers of Andhra Pradesh and Tamil Nadu expressed concern over the low fertility rates in their states recently. Andhra Pradesh Chief Minister N. Chandrababu Naidu has said that he plans to introduce legislation to incentivize more children per family.
What is the current demographic situation, especially in the southern states?
After decades of family planning policies trying to slow population growth, India has woken up to the fact that the policy’s success has also led to an aging population. This is not a uniform phenomenon – southern states, as well as smaller northern states, have experienced sharper declines in fertility rates, defined as the average number of children born to women during their childbearing years. Tamil Nadu and West Bengal, for example, recorded a fertility rate of 1.4 between 2019 and 2021, according to data from the Office of the Registrar General of India, while Andhra Pradesh, Telangana, Kerala, Punjab, and Himachal Pradesh had a fertility rate of 1.5. At the other end of the spectrum are Bihar, with a fertility rate of 3, Uttar Pradesh (2.7), and Madhya Pradesh (2.6). Countries with lower fertility rates have grown faster, but now face the specter of rapidly aging populations.
The Aging India Report published by UNFPA last year used data from the Ministry of Health to show that the share of India’s elderly population is expected to increase from 10.1% in 2021 to 15% in 2036, a further demographic transition in some countries. In Kerala, senior citizens will account for 16.5% of the population in 2021, a figure that will rise to 22.8% in 2036; TN’s elderly will make up 20.8% of the population by 2036, compared to 19% in Andhra Pradesh. In Bihar, on the other hand, only 7.7% of people are elderly in 2021, and this is expected to be only 11% in 2036.
What is the likely economic impact?
“India’s demographic transition is ahead of socio-economic transition… To understand its impact, the most important indicator is not the proportion of the elderly population, but the old-age dependency ratio, that is, how many elderly people there are for every 100 people of working age, between 18 and 59 years,” said Srinivas Goli, Associate Professor at the International Institute of Population Sciences. “If this ratio exceeds 15%, that is when you have an aging crisis.” Some states have passed this point, according to the forecast of the National Commission on Population, Kerala will have an old-age dependency ratio of 26.1 in 2021, followed by Tamil Nadu (20.5), Himachal Pradesh (19.6), and Andhra Pradesh (18.5). This means that the window of opportunity for these countries, to generate the demographic dividend of economic growth from many young workers who are not burdened by the economic and health demands of many small dependents or the elderly, has closed.
Health care costs are likely to rise significantly in countries with aging populations. One NSSO data analysis, in a study on demographic diversity by KS James of Tulane University and IIPS scholar Shubhra Kriti published by The India Forum, shows that the southern states, with only one fifth of India’s population, spend 32% of the country’s total. Out-of-pocket expenditure on cardiovascular diseases in 2017-18, while the eight states of the Hindi belt with half the country’s population, spent only 24%.
The solution proposed by the Chief Minister to increase the fertility rate can also reduce the participation of women in the workforce, which will also harm the economy. Southern politicians have also been concerned with the Finance Commission that when the successful economy has pumped in more tax revenues for the central pool, they get a diminishing share of the central source pie due to slow population growth.
What are the political implications?
Uneven population growth is set to shake up the federal structure, with the current freeze on the number of seats in Parliament expiring in 2026, after a new delimitation exercise will change state representation in the Lok Sabha. A study by James and Kriti estimates that Uttar Pradesh will gain 12 seats, followed by Bihar (10) and Rajasthan (7), while Tamil Nadu will lose nine seats, followed by Kerala (6) and Andhra Pradesh (5). ), due to its declining share in the national population.
What are the solutions considered?
Southern CMs seem to encourage pro-natalist policies by incentivizing women to have more babies. “This has not been a successful approach internationally. Educated women know that they are not reproductive machines, and forced fertility will not work, nor is there any incentive to not know what their families need,” said Dr. Goli. They recommend changes in work-family policies, with paid maternity and paternity leaves, accessible childcare, and employment policies that reduce the “motherhood penalty”. He noted that States and countries with better gender equality are better able to maintain fertility rates at a sustainable level, because women are more likely to have children if they are not deprived of economic independence in doing so.
Another approach is to increase the working age and reduce the old-age dependency ratio. Southern countries have become magnets for economic migrants. However, Dr. Goli pointed out that while these migrants make demands for social security in their countries of destination, they remain considered in their countries of origin for political and financial distribution purposes, making it difficult for the southern states.
Published – 10 November 2024 03:50 IST
