The history and economics of India’s population growth

Source: The post is based on the article “The history and economics of India’s population growth” published in Indian Express on 3rd May 2023.

Syllabus: GS 1 – population and associated issues.

Relevance: About population growth helps economic development.

News: Despite India overtaking China in population, it still belongs to the lower-middle income category (per capita income is around $2,200) This is just one-sixth of China’s and even lower than Bangladesh’s.

How has India’s population grown over the ages?

-Around 4,000 years ago, most of the population (estimates vary between 4 to 6 million) was living in and around the Indus basin. “This was perhaps the largest concentration of human beings anywhere in the world at the time,”

-By the time the Mauryan empire flourished, most of the population had shifted to the Ganges basin. “From this time forth the Ganges basin would always contain one of the world’s largest concentrations of people.”

-The next data estimate has been arrived at by using Hsuan Tsang’s observations.

-The next milestone uses data from Ain-i-Akbari in 1595.

-Since 1871 data has become more and more precise, due to formal census and UN projections.

Does population growth help economic development or hinder it?

The starting point of this debate is Thomas Malthus’ argument in 1798 that population growth would depress living standards in the long run. Malthus suggested that the way to avoid this was to exercise “moral restraint.

During the 1950s and 60s, “the general view of economists was that high birth rates and rapid population growth in poor countries would divert scarce capital away from savings and investment, thereby placing a drag on economic development.

Between the 1970s and 1990s, economists “failed to detect a robust relationship between national population growth rates and per capita income growth”.

In the 1990’s the world was also introduced to the concept of “demographic dividend.”

Note: Demographic dividend refers to a period in an economy’s trajectory when there is a bulge in the working-age population (roughly speaking, the population between 15 and 65 years). This opens up a window of opportunity during which such a country can potentially raise its level of savings and investment.

How is population growth associated with economic growth?

The population researchers Fox and Dyson found that the period between 1950 and 1973 saw the fastest growth of population as well as GDP and GDP per capita. They also found few significant developments, a) Accelerated population growth in the post-war years was stimulated largely by the diffusion of medical knowledge, technologies, and public health initiatives, b) Between 1950 and 1973 poorer countries benefitted from a positive investment environment and burgeoning employment opportunities, c) After 1973, the decline in mortality was not due to rapid economic growth.

What will be the impact of population growth and economic development findings on India?

Not every country has managed to escape what is often called the “middle-income trap”. For instance, South Korea and Israel did, but Argentina and South Africa failed the transition.

India is a lower-middle-income country. India is already the most populous country and still expected to see a rise in total population for the next 40 years despite being below the replacement rate of fertility. We should best use India’s demographic dividend.