How global megatrends play out in India

One sixth of humanity lives in India, the most populous country on this planet. Seven of the eight billion people who live in the world today were born just in the past two hundred years. That’s how rapid the growth of the world population has been in a very short span as compared with the long time span of millennia. The world population will stabilise at around 11 billion people in the next hundred years.

Some of the megatrends regarding population are as follows: The first is the rapid fall in fertility rates. Just 50 years ago, the total fertility rate (TFR), i.e., the average number of children born to a woman of childbearing age, was 4.5. That has fallen to 2.5. This is the world average. A TFR of 2.1 is called the replacement rate, after which the population size becomes stable as the growth rate becomes zero. Rich countries have a lower TFR, while poor ones have a high one. The TFR number is as low as 0.84 in South Korea. It is 1.28 in China, 1.5 in Russia, 1.64 in the US, and 2.05 in India. Higher TFRs are mostly found in the poorer countries of Africa, with Niger at 4.6 and the Democratic Republic of the Congo at 5.8. The 54 countries of Africa together have a population roughly equal to India and a comparable economic size in dollar terms. Economic growth in Africa is around 6% and might grow in the coming years.

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The second megatrend is the increase in lifespan. While it was erroneously believed that more people are currently alive in the world than have ever been, this misconception highlights the rapid rise in population. In India, life expectancy has doubled from under 40 years before independence. However, this increase in longevity has implications for the growing elderly population. In India, where the elderly often lack income or health security in old age, this presents a significant social burden for society to bear. In developed countries, income and health security for the elderly are typically supported by their own savings and pensions, funded through their working lives. In India, these costs may have to be covered by the general exchequer, resulting in a tax burden on the younger working generation. Fortunately, India’s young-to-old dependency ratio is favourable, with roughly five working-age individuals for every retired person, compared to a ratio of 2 to 1 in Germany and other ageing societies.

The third megatrend is that of urbanisation. In 2007, an important milestone was reached when more than 50% of the world’s population lived in urban areas. In India, this number still hovers around 35%, although there is some debate due to the undercounting of the urban population in India’s census. Nevertheless, India is poised for rapid urbanisation in the coming decades, contributing to city congestion. Cities play a vital role in driving economic growth and contribute significantly to India’s GDP. However, India’s current governance model for cities lacks an adequate revenue base to meet the enormous demand for infrastructure, such as local transport (metro, buses), convention centres, schools and colleges, parks, and recreational facilities. Unlike rural areas, which receive funding through the rural development ministry of state governments, cities depend primarily on property tax or a share of the GST. This funding model must change, granting cities more autonomy and decentralised power, as envisioned by the 74th Amendment to India’s constitution.

The fourth megatrend in the world is the growing imbalance in population growth, density, and distribution. The more affluent West is ageing, while the less developed countries of Asia, Africa, and South America are younger and poorer. This imbalance is sometimes referred to as the North-South Divide, although it is metaphorical rather than strictly geographic. The imbalance also manifests as a shortage of labour in affluent nations, which could be easily filled by surplus labour from other countries. However, unlike the free flow of goods, services, financial capital, and ideas across borders, people face immigration rules and hurdles that restrict their mobility. Young workers seeking job opportunities in affluent countries are treated as potential immigrants, perpetuating the existing imbalance. Thus, population concerns are interlinked with issues of migration and the free movement of labour.

These population dynamics bring us to population issues within India. Firstly, more than half of the Indian states already have a TFR below 2.0, the replacement rate. These states are generally higher in per capita income and female literacy and are primarily located in the South or East. But some states in the Hindi belt continue to have higher TFRs, leading to an overall average of 2.05 for the country.

In the coming years, we can expect large-scale labour migration from high TFR states to lower TFR states. This freedom of movement within the country for economic opportunities is guaranteed by our constitution, and migration patterns serve to address labour shortages.

Secondly, the delimitation exercise due in 2026 will necessitate changing the size of parliament and the number of representatives across Indian states. The current representation of Members of Parliament varies drastically, with some MPs representing constituencies with populations ranging from ten thousand to ten lakh. As a result, Madhya Pradesh and Tamil Nadu, despite having roughly the same population, have significantly different numbers of MPs (29 vs 39).

Thirdly, India’s demographic advantage in terms of dependency ratio presupposes the ability to generate at least five to eight million new jobs every year for a few decades. Economic growth is both a prerequisite for and a consequence of India’s demographic dividend. The years ahead will reveal whether our young demography proves to be a boon or bane.

(The writer is a noted economist) (Syndicate: The Billion Press)