Home / Opinion / Columns /  The devil is in our demographics, not population growth

A few days ago, Uttar Pradesh (UP) unveiled a population policy seeking to lower the state’s total fertility rate (TFR), and maternal and infant mortality rates. The state also unwrapped a draft population control bill, promising incentives for households with only two children and punitive exclusionary measures for those with more than two. Assam’s chief minister has also made statements about adopting a two-child policy in his state. Unsurprisingly, both states are administered by Bharatiya Janata Party (BJP) governments, spurring some other BJP-ruled states to echo similar plans. A BJP member of Parliament has also promised to move a private member’s bill along similar lines. Ironies abound in these announcements, apart from missing the real economic challenge.

Let’s examine the ironies before moving to the economic policy consequences. First, the MP desirous of limiting everybody’s reproductive choices—Ravi Kishan Shukla, a former Bhojpuri film actor—has declared four offspring on the Lok Sabha website. A story shows that over 50% of UP’s elected legislators have more than two children; the draft population control bill, therefore, proposes to exclude those already in public office.

More incongruities can be found in the National Family Health Survey (NFHS), a large-scale government survey conducted among households through multiple rounds. NHFS-V, 2019-20, completed in 17 states and five Union territories so far, and slowed down by the pandemic, shows Assam’s TFR at 1.9 children per woman. This is below the 2.1 replacement rate at which a state’s population remains constant. NFHS-V data for UP is not yet available, but NFHS-IV data shows UP’s TFR in 2015-16 at 2.7, down from 4.1 during 1998-99.

Clearly, there is no population boom forcing these states to frame two-child policies. India’s large population is seen as a drag on development, but that is because myopic economic policy ensures limited resources are distributed unevenly and unfairly. There is no certainty that undemocratic laws can remedy that. BJP ally and Bihar chief minister Nitish Kumar has said that laws alone cannot achieve population control. The politics of these proposed laws, especially because the announcement comes months before UP elections, is important: BJP supporters have long believed, erroneously of course, that minorities with a higher TFR will soon outnumber the majority, thereby ignoring not only its mathematical improbability but also real data, which shows fertility rates declining across communities. BJP leaders do not disabuse their supporters of this delusion as long as it fetches votes.

Beyond electoral politics, though, politicians should be more concerned about a ticking demographic time-bomb.

India’s population boom of the past has endowed it with a collateral benefit: a demographic dividend. Examined through the lens of the ‘dependency ratio’—or the ratio of people not working/earning to the working/earning population—a demographic dividend promises to keep lowering this ratio as more people join the workforce. A dropping TFR over the years has been reducing the dependency ratio, as there are fewer children below working age dependent on the working population. A lower dependency ratio should ideally result in higher economic growth, as a larger percentage of the population is expected to be working/earning and thereby consuming and saving.

But demographic dividend has no value if at least 60-70% of the population in the 20-60 age group is not gainfully employed. Sadly, a large section of our working population is dependent on the informal economy, where income streams are patchy and unpredictable. Given the continuing economic stagnation and rising unemployment rates over the past decade, India’s demographic dividend looks like a missed opportunity.

At the same time, improving living standards and medical advances over the past 40-50 years have prolonged life spans, thereby threatening to skew the dependency ratio at the other end of the age spectrum. According to the United Nation’s 2015 World Population Ageing report, the number of people over 60 years in India is expected to increase from 116.55 million in 2015 to over 330 million by 2050.

If there are fewer people saving currently, they will have fewer resources to support their golden years, or non-working years. Plus, with dropping fertility rates, there will be fewer people joining the workforce over the next few decades, thereby providing fewer resources to the government to finance rising social expenditure.

This is bad news for the economy. An increasing number of 60-plus people without access to adequate savings is like a future flashpoint; over 330 million is a significant vote bank and the government of the day will be under tremendous political pressure to re-route expenditure towards old age income security, thereby forcing government once again to choose between various deserving beneficiary groups. There is another sobering data point to consider: falling death rates, dropping faster than the birth-rate fall, has led to increased life expectancy, thereby requiring governments to provide safety nets for longer periods.

The agenda for these governments is unambiguous: they must urgently drum up employment opportunities, rather than hollow populist sentiments.

Rajrishi Singhal is a policy consultant, journalist and author. His Twitter handle is @rajrishisinghal.

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