Musings on World Population Day

One sixth of humanity is in India, which is 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 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.

India’s own life expectancy has doubled from under 40 years before independence

Some of the mega trends regarding population are as follows. First is the rapid fall in fertility rates. Just fifty years ago, the total fertility rate (TFR), i.e., the average number of children born to a woman of child-bearing 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 high ones. 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 United States and 2.05 in India. Hiigher TFRs are mostly found in  the poorer countries of Africa with Niger at 4.6 and Democratic Republic of Congo at 5.8. The 54 countries of Africa together have a population roughly equal to India, and the economic size is also comparable in dollar terms. Economic growth in Africa is around 6 percent and might grow in the coming years.

The second mega trend is the increase in lifespan. It was believed (wrongly) that more people are alive today in the world, than were ever born. But this statement even though wrong, makes the point quite dramatically about the rapid rise in population. India’s own life expectancy has doubled from under 40 years before independence. This has an implication for the increase in the elderly population. In India, since the elderly have very little income or health security in their old age, it is a big social burden that we as a society have to bear. The cost of income and health security of the elderly is borne by their own savings and pensions funded from their income during their working lifetime, in developed countries. But in India it may have to be borne from the general exchequer. Which means tax burden on the younger working generation. Thankfully India’s young to old, i.e. the dependency ratio is quite favorable. There are roughly five working age people for every retired person in India (as against 2 to 1 in Germany and other graying societies).

The world has a coexistence of labour shortage in the rich countries, and job shortage in the poorer countries

The third mega trend is that of urbanisation. In 2007 the world passed an important landmark in that more than fifty percent of the world population lives in urban areas. In India this number is still closer to thirty five percent. Although there is some debate regarding the exact share, due to undercounting of the urban population in India’s census. Even then, India faces the prospect of rapid urbanisation in the coming decades, contributing to city congestion. Cities are also drivers of economic growth and have a much higher share of India’s GDP. But India’s city governance model does not have an adequate revenue base to pay for the huge demand for infrastructure, such as local transport (metro, buses), convention centres, schools and colleges, parks and recreation centres.  Unlike rural areas which get funded through the rural development ministry of the state government, the cities only depend on property tax or a share of GST. This funding model has to change. The cities must get more autonomy and decentralised power, as envisaged by the seventy fourth amendment to India’s constitution.

The fifth mega trend in the world is the growing imbalance of population growth, density and spread. The more affluent West is ageing while the less developed countries of Asia, Africa and South America are younger and poorer. It is also sometimes referred to as the North South divide, although this is metaphorical and not geographic. The imbalance also manifests as shortage of labour in affluent nations. The surplus labour contries can easily fill the gap. But unlike goods, services, financial capital and ideas which can flow freely across borders, people cannot move freely. There are immigration rules and hurdles, which prevent young workers from going to affluent countries where jobs await them. Every person going across the border to do a job or deliver a service is treated as a potential immigrant to the affluent land, and hence the imbalance continues to exist. The world has a coexistence of labour shortage in the rich countries, and job shortage in the poorer countries. Thus population concerns are interlinked with issues of migration and free movement of labour.

Cities must get more autonomy and decentralised power, as envisaged by the seventy fourth amendment to India’s constitution

Which brings us to population issues in India. Firstly, more than half of the Indian States already have a TFR below 2.0 the replacement rate, These are typically higher in per capita, higher in female literacy and mostly located in the South or East. But some of the States in the Hindi belt continue to have higher TFR leading to a countrywide average of 2.05.  In the coming years we will see large scale migration of labour 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 fill the gaps caused by labour shortage. 

Secondly the delimitation exercise is due in 2026, which will call for changing the overall size of parliament and also the number of representatives across states of India. The variation of representation of current members of Parliament is too extreme, wherein an M.P. may represent a constituency whose population can vary from ten thousand to ten lakhs. Thus Madhya Pradesh and Tamil Nadu have roughly the same population but very different numbers of M.P.’s ( 29 vs 39).  Thirdly India’s demography is advantageous when it comes to dependency ratio, but that presupposes that it is able to generate at least five to eight million new jobs every year for a few decades. Thus, economic growth is both a prerequisite as well as consequence of India’s demography. The coming years will reveal whether our young demography is a boon or bane.  Wishing all Indians a happy World Population Day!

(The writer is a noted economist)