With India’s demographic transition, come challenges

Source: This post is based on the article “With India’s demographic transition, come challenges” published in Indian Express on 1st December 2021.

Syllabus: GS 1 – Population and associated issues.

Relevance: To understand the concerns associated with achieving Fertility Rate.

News: According to the latest round of the National Family Health Survey (NFHS 2019-21), India’s Total Fertility Rates (TFR) has reached 2.0 at the national level. This success, however, brings its challenge.

What are the challenges India needs to focus on?

The growing proportion of the elderly: As fertility declines and societies face the challenge of supporting an ageing population with a shrinking workforce. This challenge is greater for leaders at the beginning of the demographic transition — Kerala and Tamil Nadu.

According to the National Statistical Office, the proportion of the population greater than age 60 was 8.6% for India as a whole in 2011. It was 12.6% for Kerala and 10.4% for Tamil Nadu. But the levels are projected to increase further to 20.9% and 18.2% respectively by 2031.

Higher dependent on migrants: Ageing states, increasingly rely on a workforce from relatively younger states to maintain their economic prosperity. For instance, many industries such as auto parts manufacturing and construction in southern states rely on semi-skilled migrants from northern and eastern states, particularly Bihar, Uttar Pradesh and Odisha.

Challenges in political representation: The Indian constitution mandates allocation of Lok Sabha seats across states in proportion to their population via the Delimitation. But, the 42nd amendment froze seat allocation to the population status of the 1971 Census. This freeze was further extended until after the 2031 Census by the 84th amendment.

This has led to a much greater population per constituency in northern states than in southern states. In 2011, Uttar Pradesh had an average of 25 lakh persons per constituency, while Tamil Nadu had 18.5 lakh. Since India reached its TFR level, India has to unfreeze the seat allocation to the population.

Challenges in allocating financial resources: Much of the Centre-state revenue sharing occurs through recommendations of various Finance Commissions. The Fifteenth Finance commission added criteria of demographic performance to reward states with lower TFR.

With the overall attainment of TFR, India cannot continue the allocation of resources based on demographic performance, instead, India should focus on principles of equity. If not, then India will move in a direction of China’s route of sharply lowering fertility.

What should India do?

Focus on moderate fertility decline coupled with inter-state sharing of demographic dividend: As China’s experience shows, very low fertility rates creates an increased burden of caring for the elderly in the long term.

So, The Sixteenth Finance Commission and the next Delimitation Commission must be freed from the burden of managing the demographic transition, focused on carrying out their tasks in the best interests of Indian federalism.