New Delhi: India’s population is ageing sooner than expected, and by the middle of the next decade, the country’s demography will see a significant shift, according to a report by a United Nations (UN) body.
The shift, when it happens, will have significant implications for policymakers as well as businesses in a country that touts its ability to reap a so-called demographic dividend of a young population as one of its competitive strengths.
The report by the United Nations Population Fund (UNFPA) has projected a rapid increase in India’s median age to 31 years in 2026 (it was 20 in the 1980s). It has also projected a 326% increase in the number of people aged between 60 and 80 by the year 2050 (from the year 2000); a 700% increase in the number of people older than 80; and a 55% increase in the country’s overall population. It didn’t provide absolute numbers for the estimates.
Subrata Mukherjee, a former professor in the department of political science at the University of Delhi, expects the shift in demography to have social, political and economic implications.
And according to Santosh Desai, managing director and chief executive officer of Future Brands Ltd, a branding consultancy, the market for products and services aimed at people over the age of 45 is under-serviced and companies could leverage the change to their advantage.
The UNFPA report attributes the demographic transition to declining fertility in the reproductive age group and increased longevity. UN projections suggest that India is “gradually but surely transitioning away from a young age structure with the elderly population soon outnumbering children in India”.
Yet, the fine print of the report belies some widely held perceptions about the elderly.
“Some of the findings in this report are unexpected. The report indicates that over 50% of the elderly contribute to the household income,” said P.M. Kulkarni, a professor at the Centre for the Study of Regional Development at Jawaharlal Nehru University. “This indicates a dual dependence between elderly and children.”
The report should make interesting reading for policymakers, although, as B.D. Ghosh, a senior fellow at the Kolkata-based Institute of Social Sciences, points out, India has never factored demography into its policymaking. “Even states which have considerable greying population like Kerala have not taken this into consideration while formulating policies,” he added.
Indeed, Kerala, the other southern states, and Punjab and Himachal Pradesh saw the most greying between 1961 and 2001.
Kannan Sitaram, platform chief executive officer for consumer goods at India Equity Partners, a private equity fund, admitted that the South seems to have a population that’s ageing faster—maybe because of lower birth rates.
There are several retirement homes in and around Chennai, Coimbatore and Madurai, he added.
“There is a market for golden oldies. Unlike elders in the past, people who are retiring now or have retired a few years ago—depending on their socio-economic backgrounds—have made their pile. Besides, they are not shy of spending. Earlier people put money in fixed deposits. Now the consumption culture has taken off,” Sitaram said.
Sitaram sees a similarity between what’s happening in India now, and will happen with increasing frequency in the future, with what happened in Europe a few decades ago. People had money and time on their hands, and marketers made the most of it, he said.
The bigger challenges, however, will be at the social level.
“In the social scenario, where the joint families are breaking down, old people’s health, security issues and psychological issues have to be handled. The government will face a situation where it pays more pension than salary,” said Mukherjee of the University of Delhi.
And political parties will have to start thinking about reaching out to the emerging demographic segments, too, he added.
The UNFPA report also emphasized the need for pension payments, income security and geriatric services.
Several companies seem to have realized this.
“We have aggressively started looking at this new life stage, i.e. post 58-60 who have another 15-20 years of life ahead of them,” said Anisha Motwani, director and chief marketing officer at Max Life Insurance Co. Ltd. With people living to well over 80, “non-earning years are today half of one’s earning years”, she said.