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What is Demographic Distress?

What is Demographic Distress?

Tag: GS 3 || Economy || Structure of the Indian Economy || Population

Why in news?

  • As population growth moves past its peak, we need to be acutely aware that the population of our youth is on the decline.


  • Data from the 4th National Family Health Survey (NFHS-4) 2015-16 for the survey period 2013-15 has signaled a monumental shift in modern Indian demographics.
  • TFR: For the first time in its history, India has reached a TFR (Total Fertility Rate) of 2.18, which is below the average world replacement rate of 2.3.

Changing trends

  • For developed countries where the mortality rates of children are low due to higher health standards, the replacement rate is set at 2.1 as per the UN.
  • As the NFHS-4 was conducted back in 2013-15, we followed the trend line of the TFR to determine that India’s TFR will have fallen to about 2.0 by March 2019, well past the developed country replacement rate.
  • This is shocking and surprising and must be validated in the coming years by NFHS-5, which is being conducted currently.
  • Known for its large population, India is perceived as a country which will benefit from a large demographic dividend.
    • As population growth moves past its peak, we need to be acutely aware that the population of our youth is on the decline.
    • Population growth is past its peak. There are not enough young people coming into India to replace the current population.
  • As can be seen in the population pyramid chart, from NFHS 4, there are fewer babies being born over the last 10 years.
  • The population pyramid has inverted for the first time ever.
    • This rate of decline is only expected to accelerate in the coming years.
    • This does not mean that the country’s population has peaked as yet, because improving healthcare beckons improved longevity, which is ushering in a growing population of citizens over the age of 60.
    • The percentage of children under the age of 15 declined from 35% in NFHS-3 (2003-05) to 29% in NFHS-4 (2013-15).
    • In contrast, the population of those aged 60 years and older increased slightly, from 9% in NFHS-3 to 10% in NFHS-4.
    • India is now on the verge of becoming an older country, where we can expect the country’s average age to increase over the next few decades.
  • An important question to be raised here is will India become older before becoming richer?
    • This demographic movement is a monumental event that will significantly shape national policies in the coming decades, necessitating the government to take some difficult decisions.
  • Although India’s population skew will not happen at the pace at which it did in China, India too will need to move beyond policies for population control and towards building wealth at a brisk pace.

What should be done?

  • Increasing women’s participation in the workforce: To bolster the capacity of wealth creation of India’s working class, India must tap into the underutilised working-age women population.
    • According to a 2018 World Bank report, the labour force participation rate among females in India was 27% in 2018 while the world average stood at 48.5%.
    • According to IMF research, raising women’s participation in the labour force to the same level as men can boost India’s GDP by 27% and contribute additively to India’s GDP growth every year.
  • Improving social security: Incentivising investments in retirement schemes like pensions is paramount for India, given its changing demographic profile.
    • Of every 10 Indian workers, eight are informally employed, with limited access to retirement savings accounts.
    • Further, a growing middle-class is witnessing increasing wage rates and an improving quality of life, which will result in increased expectations for retirement income.
    • These dynamics are resulting in what the WEF predicts is the highest growth (10% CAGR) in the retirement savings gap amongst all large-population countries, as India’s social security shortfall burgeons from $3 trillion in 2015 to $85 trillion in 2050.
  • Reimagining education for tomorrow: Today’s job market is vastly different from what it was a decade back. Further, 65% of children joining primary school today will eventually work in a job that does not yet exist.
    • To meet this skills-gap, the education curriculum and delivery across a student’s lifecycle requires a significant revamp. There is also an urgent need to reskill a large chunk of population that is stuck in legacy roles.
    • The government must work towards reskilling workforces in industries where job requirements are expected to alter drastically because of the shift in India’s demographics.
  • Implementing tech-enabled healthcare: The use of technology in healthcare coverage will be necessitated with a growing older-aged population in India.
    • With a doctor-to population-density of 1/1,700, the country’s dearth of quality medical talent is not a predicament that it can soon overcome.
    • Technology can be revolutionary in delivering quality healthcare services in India by improving access, increasing efficiency of diagnosis and care, and further, reducing the cost of healthcare delivery and insurance.

Mains question

  • What is Demographic Distress? Will India get older before it gets richer?