With 1.4 billion people, the size of India’s population is second to only that of China. It is on track to become the most populous country in the world. This of course presents both opportunities and challenges. On the one hand, a large workforce means cheaper labour which can boost economic output but on the other, there needs to be enough growth to sustain the size of the population. For the first time since records began, the country’s fertility rate has fallen below the replacement level. This means that the population will begin to shrink at some point sooner than economists initially thought.
This must be a good thing, right? The word ‘overpopulated’ is the most commonly used term to describe the number of people in India. We do not have an efficient enough economy to provide for the 1.4 billion who live here. The cities are overcrowded and there aren’t enough jobs. Social programs can’t possibly reach everyone in need and all in all, there simply aren’t enough resources. A smaller population would be easier to manage.
When the country gained independence, the fertility rate was 6. That’s 6 children being born to every woman. From the very beginning the government started targeting a lower rate but this was difficult to achieve. It gradually declined to 5 in the 70s and reached 3 only in the 90s. The replacement rate, which refers to the number of children that need to be born to exactly replace the previous generation, is 2.1. Some states like Kerala achieved this in the early 90s, but it has taken until only very recently for the national average to reach 2.1. The latest data shows that we have now fallen below that.
What this means is that the size of our population will peak at 1.6 billion around 2050. Until now, it was believed that the peak would touch 1.7 billion in 2060. Once we reach 1.6 billion, the size will gradually begin to reduce and the once seemingly eternal growth of India’s population will come to a halt. We will start becoming a country of older people and as a result economic growth will slow down too. This is because the size of the workforce will reduce but there will simultaneously be an aging population that needs to be looked after. This has been the case in most of the developed world.
What India has now is the largest youth population in the world which means that soon, we will also have the largest workforce. During the early part of the current century, this was something to look forward to. Economic growth had really begun to take off and it seemed as though the influx of young people into the labour force would further propel that growth and take India to the ‘next level’, i.e a fully developed economy. These people would be educated and healthy and they would have access to the best infrastructure that the country had ever seen. The trajectory of growth could only point upwards. After all, this is what happened in China, a country with a comparable population size.
A new book titled, ‘What Millennials Want’ documents the opinions and aspirations of this young country. The author travelled across India asking people what they thought of their country and how they expected their lives to turn out. Worryingly, what he found was that the expectation of India moving to the ‘next level’ was now passed on to the next generation. This generation, the one that was expected to successfully carry that burden, does not believe it can do so.
We know that over the last decade or so economic growth has plateaued. The country’s youth, who were expected to largely go into the manufacturing sector and turn India into a hub similar to that of China, have by and large found themselves working in services. These are low-skilled and low-productivity services jobs as well, so their contribution to the economy isn’t a lot and at the same time the livelihoods of the workers aren’t being greatly improved. India hasn’t been able to capitalise on its large and young workforce by generating employment in manufacturing. These jobs would be more productive and better paying, which would have a better impact on the economy as a whole. It has also not been able to move away from the agricultural sector by a large enough volume.
These issues mean that the country will not have achieved the kind of growth that should have been possible, given the size and age of the population. Of course, there is still time for India to make changes that would maximise the remaining potential, of which there is a lot. It is not to say that when the population growth begins to plateau that growth will suddenly stop, but the maximum potential will be lower. This translates to a missed opportunity. India and China are routinely grouped together because of the many similarities that we share, and this country was expected to replicate China’s achievements. The fact that this has not been the case translates to a missed opportunity