India's Demography at 2040: Planning Public Good Provision for the 21st Century PDF

India's Demography at 2040: Planning Public Good Provision for 07 CHAPTER the 21st Ce...

India's Demography at 2040: Planning Public Good Provision for 07 CHAPTER the 21st Century India is set to witness a sharp slowdown in population growth in the next two decades. Although the country as a whole will enjoy the “demographic dividend” phase, some states will start transitioning to an ageing society by the 2030s. It will surprise many readers to learn that population in the 0-19 age bracket has already peaked due to sharp declines in total fertility rates (TFR) across the country. The southern states, Himachal Pradesh, Punjab, West Bengal and Maharashtra now have fertility rates well below the replacement rate. TFR in Bihar, Uttar Pradesh, Jharkhand, Chhattisgarh, Rajasthan and Madhya Pradesh are above the replacement rate but are also experiencing significant declines. As a result, the national TFR is expected to be below replacement level by 2021 (adjusted for the skewed gender ratio, it may already be there). The age distribution, however, implies that India's working-age population will grow by roughly 9.7mn per year during 2021-31 and 4.2mn per year in 2031-41. Meanwhile, the proportion of elementary school-going children, i.e. 5-14 age group, will witness significant declines. Contrary to popular perception, many states need to pay greater attention to consolidating/merging schools to make them viable rather than building new ones. At the other end of the age scale, policy makers need to prepare for ageing. This will need investments in health care as well as a plan for increasing the retirement age in a phased manner. I. RECENT DEMOGRAPHIC this period; the slowdown in states with TRENDS historically high population growth such as Bihar, Uttar Pradesh, Rajasthan and Haryana 7.1 Population growth in India has been is particularly noteworthy. Population is now slowing in recent decades from an annual growing below 1 per cent in the southern growth rate of 2.5 per cent during 1971-81 to states as well as West Bengal, Punjab, an estimated 1.3 per cent as of 2011-16 (Figure Maharashtra, Odisha, Assam and Himachal 1). All major states have witnessed a marked Pradesh1 (Figure 2). deceleration in population growth during ___________ 1 In the figures, abbreviations used for states are as follows. AP: Andhra Pradesh, AS: Assam, BR: Bihar, CG: Chhattisgarh, DL: Delhi, GJ: Gujarat, HP: Himachal Pradesh, HR: Haryana, JH: Jharkhand, JK: Jammu & Kashmir, KA: Karnataka, KL: Kerala, MH: Maharashtra, MP: Madhya Pradesh, OR: Odisha, PB: Punjab, RJ: Rajasthan, TL: Telangana, TN: Tamil Nadu, UK: Uttarakhand, UP: Uttar Pradesh, WB: West Bengal.  India's Demography at 2040: Planning Public Good Provision for the 21st Century 129 Figure 1: Annual Population Growth Rate in India (per cent) 2.5 2.0 1.5 1.0 0.5 0.0 1941-51 1951-61 1961-71 1971-81 1981-91 1991-01 2001-11 2011-16 Source: Census 2011, International Institute for Population Sciences (IIPS) estimates. Figure 2: Annual Population Growth Rate by State during 2011-16 (per cent) 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 PB WB TL TN MH MP RJ BR AS HP KL AP KA CG OR JK DL HR GJ UK JH UP Source: Census 2011, IIPS estimates. 7.2 A key driver of this trend has been halved from 4.5 in 1984 to 2.3 as of 2016 the steady decline in India’s total fertility (Figure 3 and Figure 4). rate2 (TFR) since the mid-1980s. Though the decline in India’s TFR has been more 7.3 The replacement level fertility3 is gradual when compared to the experience of usually marked at 2.1 but, as discussed in other emerging economies, it has nonetheless the next section, India’s TFR may already ___________ 2 Total fertility rate refers to the total number of children born or likely to be born to a woman of child-bearing age in her lifetime. 3 TFR of 2.1 children per woman is called the replacement level fertility, which is the average number of children a woman would need to have in order for the population to replace itself 130 Economic Survey 2018-19 Volume 1 Figure 3: Number of Years Taken for TFR to Decline from over 4.0 to India’s TFR of 2.3 25 20 15 10 5 0 Sri Lanka Thailand Brazil China Bangladesh S.Korea Turkey India Singapore Hong Kong Source: World Bank, Sample Registration System. Figure 4: TFR in India 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 Source: Sample Registration System. be close to the effective replacement level is now below replacement level fertility in 13 fertility after accounting for its skewed out of the 22 major states (Figure 6). In fact, sex ratio. Interestingly, India has reached TFR has reached as low as 1.6-1.7 in states the current TFR of 2.3 at a relatively low such as Delhi, West Bengal, Tamil Nadu, per capita income when compared to the Andhra Pradesh, Telangana, Punjab and experience of major developed economies Himachal Pradesh. Even high fertility states but similar to that of other Asian countries such as Bihar, Jharkhand, Rajasthan, Madhya (Figure 5). Pradesh, Chhattisgarh, Uttar Pradesh and 7.4 Note that there is a wide variation in Uttarakhand have seen a sharp decline in the experience of different Indian states. TFR TFR over the years.  India's Demography at 2040: Planning Public Good Provision for the 21st Century 131 Figure 5: Real Per Capita GDP when TFR Reached 2.3 25000 real per capita GDP (PPP, 2011 $) US Australia 20000 Canada France New Zealand Belgium UK 15000 Italy Hong Kong Turkey Austria 10000 Brazil Singapore India 5000 S.Korea Thailand Sri Lanka Bangladesh China 0 1960 1970 1980 1990 2000 2010 2020 year when TFR reached 2.3 Source: World Bank, Penn World Table. Figure 6: TFR by State in 2016 3.4 3.2 3.0 2.8 2.6 2.4 2.2 Replacement level fertility = 2.1 2.0 1.8 1.6 1.4 1.2 1.0 WB TN MH PB TL KL MP BR DL JK HP AP KA UK CG OR GJ HR AS JH RJ UP Source: Sample Registration System. 7.5 These developments suggest that India age-structure, and the ageing phenomenon has entered the next stage of demographic already underway in some states. The transition with population growth set to slow southern states, Himachal Pradesh, Punjab, markedly in the next two decades along with West Bengal and Maharashtra are already a significant increase in the share of working- quite advanced in the demographic transition, age population (the so-called “demographic with (i) TFR already well below replacement dividend” phase). level fertility; (ii) population growth mainly 7.6 However, national-level population due to momentum; (iii) more than 10 per cent trends mask the significant heterogeneity of the population over the age of 59; and (iv) across states in terms of fertility, mortality, at most one-third of the population below the 132 Economic Survey 2018-19 Volume 1 age of 20. In contrast, states such as Bihar, chapter. However, as an illustrative exercise, Uttar Pradesh, Jharkhand, Chhattisgarh, Section III looks at some policy implications Rajasthan and Madhya Pradesh are still in the for health care provision, elementary school early stages of demographic transition. facilities and retirement age. 7.7 In light of continued urbanization, II. PROJECTING NATIONAL AND improvements in health care, increase in STATE LEVEL POPULATION female education, and other socio-economic drivers of demographic change, Section II 7.8 Population and its age structure are forecasts demographic metrics at the national projected at the national and state level up to and state level up to 2041. Such an exercise 2041 following the methodology outlined in would enable us to understand the pace of Box 1. For the purpose of analysis, Section II demographic transition at the national and and III focus on 22 major states, which account state level and assess which states are likely to for 98.4 per cent of India’s population as per experience significant ageing. The projected Census 2011. population and age-structure over the next two (i) Declining Fertility Rates decades has several implications for policy, inter-alia for the (i) provision of health care, 7.9 Projected values for 2021-41 suggest (ii) provision of old-age care, (iii) provision that TFR at the national level will continue to of school facilities, (iv) access to retirement- decline rapidly and will lie below replacement related financial services, (v) public pension level fertility at 1.8 as early as 2021 (Table 1). funding, (vi) income tax revenues, (vii) In line with the fertility patterns witnessed in labour force and labour participation rates, other countries, TFR is expected to stabilize and (viii) retirement age. Detailed analysis thereafter for some time around 1.7. Such of these issues is beyond the scope of this fertility levels would be close to the TFR Table 1: TFR for India and Major States, 2001-2041 States 2001 2011 2016 2021 2031 2041 INDIA 3.1 2.4 2.3 1.8 1.7 1.7 Andhra Pradesh 2.3 1.8 1.7 1.5 1.5 1.5 Assam 3.0 2.4 2.3 1.8 1.8 1.8 Bihar 4.4 3.6 3.3 2.5 2.0 1.8 Chhattisgarh 3.9 2.7 2.5 1.8 1.8 1.8 Delhi 2.1 1.9 1.6 1.5 1.5 1.5 Gujarat 2.9 2.4 2.2 1.9 1.8 1.8 Haryana 3.1 2.3 2.3 1.8 1.8 1.8 Himachal Pradesh 2.2 1.8 1.7 1.6 1.6 1.6 Jammu & Kashmir 2.5 1.9 1.7 1.5 1.5 1.5 Jharkhand 4.4 2.9 2.6 1.8 1.8 1.8 Karnataka 2.4 1.9 1.8 1.5 1.5 1.5  India's Demography at 2040: Planning Public Good Provision for the 21st Century 133 Kerala 1.8 1.8 1.8 1.8 1.8 1.8 Madhya Pradesh 3.9 3.1 2.8 2.0 1.8 1.8 Maharashtra 2.4 1.8 1.8 1.5 1.5 1.5 Odisha 2.6 2.2 2.0 1.8 1.8 1.8 Punjab 2.4 1.8 1.7 1.6 1.6 1.6 Rajasthan 4.0 3.0 2.7 1.9 1.8 1.8 Tamil Nadu 2.0 1.7 1.6 1.5 1.5 1.5 Telangana 2.3 1.8 1.7 1.6 1.6 1.6 Uttar Pradesh 4.5 3.4 3.1 2.0 1.8 1.8 Uttarakhand 4.5 3.4 1.9 1.6 1.6 1.6 West Bengal 2.4 1.7 1.6 1.5 1.5 1.5 Source: Census, Sample Registration System, IIPS projections. Note: Projected values for 2021-41 are based on fitted model values from 20-year trends of TFR based on estimates from Sample Registration System. Before 2016, the values of Andhra Pradesh are assigned to Telangana. Box 1: Methodology for Population Projections Using the 2011 Census data as baseline, population is projected by age-structure up to 2041. These projections are undertaken both at the national level and for 36 states and Union Territories (UTs). The cohort-component methodology (Cannan, 1895 and George et al, 2004) is followed for population projections at the national level and for 22 major states that account for 98.4 per cent of India’s population using assumptions for fertility, mortality, life expectancy and sex ratio at birth. These assumptions at the national level are derived using the assumptions for states weighted by their share in national population. No inter-state migration is assumed since the Census 2011 data on net inter-state migration by age-structure has not been published. International migration is not taken into consideration. The age-sex population is smoothened and adjusted for the population category of “age not stated” using a point formula similar to the methodology used in government’s official projections (Office of Registrar General of India, 2006). Population Projections for Smaller States and UTs: The eight smaller states (Arunachal Pradesh, Goa, Manipur, Meghalaya, Mizoram, Sikkim, Nagaland and Tripura) and six UTs (Chandigarh, Puducherry, Daman & Diu, Dadra & Nagar Haveli, Lakshadweep and Andaman & Nicobar) account only 1.6 per cent of India’s population. Due to constraints in obtaining reliable estimates for long-term trends in mortality and fertility, the ratio method (Pittenger, 1976 and U.S. Census Bureau, 1952) is used for population projection. The ratio of the small area (say a small state) to the larger area (say India) is calculated and assumed to remain constant up to 2041. For each year, this ratio is multiplied by the projected population of the larger area, as derived using the cohort-component methodology, to obtain the population projections for these states and UTs. 134 Economic Survey 2018-19 Volume 1 Mortality Rate: A log-linear model is used to project mortality using life expectancy at birth for 1970-2016 from the Sample Registration System’s Life Tables, fitted separately for male and female4: for females , for males Life expectancy is projected to continue to rise during the projection period from 67.2 years in 2016 to 71.4 years in 2041 for males, and more significantly, from 70.3 years in 2016 to 75.3 years in 2041 for females5. Fertility Rate: TFR is projected up to 2041 using the Gompertz method (Gompertz, 1825) based on the lower (L) and upper (U) limits of TFR and the base period TFR, where the latest available TFR is inserted: The lower limit (L) of TFR is taken between 1.2-1.8 for different states, and the upper limit (U) of TFR is taken to be the value of TFR in the base period, given that TFR across states is on a downward trend currently. TFR for time period t is projected using the estimated parameters a and b using the Ordinary Least Squares (OLS) regression. Sex Ratio: Both sex ratio at birth and sex differentials in survival probability are taken into consideration to determine the sex ratio of the population. Sex ratio at birth is assumed to remain constant at the 2014-16 levels since it already stands below 1.10 in 12 out of the 22 major states and is not expected to decline significantly in the next two decades in the remaining 10 states. currently seen in countries such as China, Maharashtra and Himachal Pradesh, are Belgium, Netherlands and Brazil. expected to see TFR decline further by 2021, reaching as low as 1.5-1.6 and stabilizing 7.10 At the state level, those already thereafter. Even states lagging behind in the below replacement level fertility, including fertility transition are expected to see TFR the southern states, West Bengal, Punjab, fall significantly below replacement level ___________ 4 Since Life Tables for Delhi and Himachal Pradesh are not available for longer periods, appropriate increment in life expectancy at birth for male and female are applied to the UN (2017) forecasts to project life expectancy at birth up to 2041. 5 Since Kerala already has high life expectancy at birth, the maximum life expectancy at birth is assumed to be equal to the current life expectancy at birth of Japan.  India's Demography at 2040: Planning Public Good Provision for the 21st Century 135 to 1.8. This would be as early as 2021 in (ii) Population Growth Trajectory Jharkhand, Haryana and Chhattisgarh, and by 2031 in Uttar Pradesh, Rajasthan and 7.13 Demographic projections show that Madhya Pradesh. In fact, by 2031, all states India’s population growth will continue to would see below replacement level fertility. slow rapidly over the next two decades, growing less than 1 percent during 2021- 7.11 This is in line with expectations of 31 and under 0.5 per cent during 2031-41 further decline in fertility for females in the (Table 2). Such population growth rates 20-30 age-group, driven by rising female would be close to the trend currently seen education, postponement of marriage, access in countries such as Germany and France. to family planning methods, and continued In fact, with TFR projected to fall well decline in infant mortality. While family below replacement level fertility by 2021, planning programs have played a major positive population growth in the next role in reducing fertility in India in the past two decades will be due to population decades, these socio-economic changes have momentum and the continued rise in life manifested over the last 10-15 years. expectancy. 7.12 The projections for TFR in Table 1 7.14 Given state-level differences in initial are based on the assumption that sex ratio at fertility levels, mortality and age composition, birth will remain at current levels over the both the trajectory of population and population next two decades. As of 2014-16, sex ratio growth will continue to vary across states. States at birth remains higher than the normal range ahead in the demographic transition will see a of 1.02-1.076 at the national level and in 17 continued deceleration in population growth out of 22 major states. Thus, there are more and reach near-zero growth rates by 2031-41. men than women in the population when With population peaking by 2031, Tamil Nadu’s compared to the natural level. This implies population growth will start declining during that the required replacement level fertility 2031-41 unless offset by inward migration. at the national and state level is higher than Population growth will be close to zero in the usual benchmark of 2.1, i.e., due to the Andhra Pradesh and as low as 0.1-0.2 per cent skewed sex ratio, a woman would have to give in Karnataka, Kerala, Telangana, Himachal birth to more than 2.1 children in order for Pradesh, West Bengal, Punjab and Maharashtra. the population to replace itself. Our estimates suggest that the effective replacement level 7.15 States lagging behind in the fertility after taking into account the skewed demographic transition will also witness sex ratio could be around 2.15-2.2 for India a marked slowdown in population growth with a sex ratio of 1.11; around 2.2-2.25 for during 2021-41. Population growth will halve states such as Haryana, Uttarakhand and over the next two decades in Chhattisgarh, Gujarat with the sex ratio as high as 1.15- Uttar Pradesh, Rajasthan and Madhya 1.20; and between 2.1-2.2 for the remaining Pradesh. Bihar alone will have a population states with the sex ratio around 1.07-1.14. growth rate of 1 per cent. Nonetheless, Interestingly, the current TFR in 14 out of the together with Jharkhand, these states will 22 major states is already below the effective account for nearly two-thirds of the increase replacement level fertility. in India’s population during 2021-41, with ___________ 6 The average value of sex ratio at birth is around 1.05, i.e. 105 boys born per every 100 girls. 136 Economic Survey 2018-19 Volume 1 Table 2: Annual Population Growth Rate (in per cent) for India and Major States States 2001-11 2011-21 2021-31 2031-41 INDIA 1.77 1.12 0.72 0.46 Andhra Pradesh 1.10 0.65 0.31 0.02 Assam 1.71 0.74 0.77 0.48 Bihar 2.54 1.82 1.34 1.00 Chhattisgarh 2.26 1.17 0.76 0.57 Delhi 2.12 1.00 0.62 0.30 Gujarat 1.93 1.12 0.71 0.44 Haryana 1.99 1.08 0.70 0.44 Himachal Pradesh 1.29 0.64 0.57 0.24 Jammu & Kashmir 2.36 0.88 0.82 0.49 Jharkhand 2.24 1.39 0.97 0.82 Karnataka 1.56 0.75 0.36 0.10 Kerala 0.49 0.66 0.45 0.18 Madhya Pradesh 2.03 1.36 0.81 0.64 Maharashtra 1.60 0.73 0.42 0.15 Odisha 1.40 0.82 0.63 0.38 Punjab 1.39 0.71 0.42 0.11 Rajasthan 2.13 1.47 0.96 0.75 Tamil Nadu 1.56 0.56 0.25 -0.05 Telangana N/A 0.80 0.53 0.21 Uttar Pradesh 2.02 1.48 0.93 0.73 Uttarakhand 1.88 1.30 0.70 0.50 West Bengal 1.38 0.71 0.50 0.14 Source: Census, IIPS projections. just Uttar Pradesh and Bihar accounting for to decline and is projected to drop from as over 40 per cent of the increase (Table 3). high as 41 per cent in 2011 to 25 per cent by 2041 (Table 4). On the other hand, the share (iii) Changing Age Composition of elderly, 60 years and above, population 7.16 With TFR reaching low levels and will continue to rise steadily, nearly doubling longevity continuing to increase, India’s from 8.6 per cent in 2011 to 16 per cent by population at the national level and in several 2041. India’s demographic dividend will peak states will begin ageing significantly in just a around 2041, when the share of working-age, decade from now. The share of India’s young, i.e. 20-59 years, population is expected to i.e. 0-19 years, population has already started hit 59 per cent. With changing demographic  India's Demography at 2040: Planning Public Good Provision for the 21st Century 137 Table 3: Population (in millions) for India and Major States, 2011- 2041 Projected growth States 2011 2016 2021 2031 2041 during 2021-41 (%) INDIA 1210.6 1286.1 1346.9 1443.2 1510.2 12.1 Andhra Pradesh 49.4 51.2 52.6 54.2 54.3 3.4 Assam 31.2 32.2 33.5 36.1 37.9 12.9 Bihar 104.1 113.8 123.0 139.5 153.4 24.7 Chhattisgarh 25.5 27.3 28.5 30.7 32.4 13.8 Delhi 16.8 17.7 18.5 19.6 20.2 9.4 Gujarat 60.4 64.1 67.2 72.0 75.2 11.8 Haryana 25.4 26.9 28.1 30.0 31.4 11.7 Himachal Pradesh 6.9 7.1 7.3 7.7 7.9 8.2 Jammu & Kashmir 12.5 13.1 13.6 14.8 15.5 13.4 Jharkhand 33.0 35.7 37.6 41.2 44.6 18.8 Karnataka 61.1 63.7 65.7 68.1 68.7 4.7 Kerala 33.4 34.6 35.6 37.2 37.9 6.4 Madhya Pradesh 72.6 78.1 82.5 89.2 94.9 15.0 Maharashtra 112.4 117.0 120.6 125.7 127.6 5.8 Odisha 42.0 43.8 45.4 48.2 50.1 10.3 Punjab 27.7 28.8 29.7 31.0 31.3 5.3 Rajasthan 68.5 74.1 78.6 86.1 92.6 17.8 Tamil Nadu 72.1 74.5 76.2 78.1 77.7 2.0 Telangana 35.2 36.7 38.0 40.0 40.9 7.4 Uttar Pradesh 199.8 216.2 229.3 250.7 269.0 17.3 Uttarakhand 10.1 10.9 11.4 12.2 12.8 12.3 West Bengal 91.3 94.8 97.8 102.7 104.2 6.5 Source: Census, Sample Registration System, IIPS projections. composition, India’s age-structure by 2041 states, would have less than one-fourth of the will resemble that of China and Thailand as population under the age of 20 but about one- seen during the current decade. fifth or more population over the age of 59 by 2041. 7.17 All major states are projected to witness a decline in the share of young population 7.18 Even states in earlier stages of and an increase in the share of elderly demographic transition, such as Bihar, Uttar population over the next two decades. Pradesh, Jharkhand, Chhattisgarh, Madhya States ahead in the demographic transition, Pradesh and Rajasthan, will see a significant such as Himachal Pradesh, West Bengal, decline in the share of young population, Maharashtra, Punjab and most of the southern though these shares will remain relatively 138 Economic Survey 2018-19 Volume 1 Table 4: Population by Age Structure (per cent share of population) for India and Major States, 2011-2041 0-19 years 20-59 years 60 years and above States 2011 2021 2031 2041 2011 2021 2031 2041 2011 2021 2031 2041 INDIA 40.9 34.5 28.8 25.2 50.5 55.8 58.8 58.9 8.6 9.7 12.4 15.9 Andhra 34.8 28.4 24.4 21.4 55.1 59.6 60.2 58.6 10.1 12.0 15.4 20.0 Pradesh Assam 42.7 35.4 29.1 26.8 50.6 56.7 60.1 58.8 6.7 7.9 10.9 14.4 Bihar 49.4 43.5 35.1 30.1 43.2 48.9 55.9 58.3 7.4 7.7 9.1 11.6 Chhattisgarh 42.3 36.0 30.5 27.2 49.9 55.0 58.0 58.5 7.9 8.9 11.6 14.4 Delhi 37.2 29.2 23.5 20.2 56.0 61.1 61.9 58.5 6.8 9.7 14.6 21.2 Gujarat 38.7 33.2 28.6 25.1 53.3 56.8 58.2 57.9 8.0 9.9 13.2 17.0 Haryana 40.3 33.5 28.4 24.9 51.0 57.1 59.5 59.3 8.7 9.5 12.1 15.8 Himachal 35.3 29.0 24.5 22.0 54.5 58.8 59.3 56.9 10.3 12.2 16.1 21.1 Pradesh Jammu & 43.7 33.8 24.5 23.0 48.9 57.1 62.9 59.8 7.4 9.1 12.6 17.2 Kashmir Jharkhand 45.9 38.8 31.0 28.0 46.9 52.8 58.5 58.7 7.2 8.4 10.6 13.4 Karnataka 35.8 29.8 25.0 21.7 54.7 59.0 60.5 59.3 9.5 11.1 14.5 19.0 Kerala 31.3 27.6 24.9 23.3 56.2 56.2 54.7 52.8 12.6 16.2 20.5 23.9 Madhya 43.8 38.0 31.8 27.3 48.4 53.7 57.6 59.3 7.9 8.3 10.6 13.4 Pradesh Maharashtra 36.2 29.5 24.1 21.2 53.9 59.0 60.9 59.0 9.9 11.5 14.9 19.7 Odisha 38.2 32.6 28.3 26.1 52.3 56.7 58.2 57.3 9.5 10.8 13.4 16.6 Punjab 35.8 28.2 23.8 21.0 53.9 59.5 60.2 58.4 10.4 12.3 16.0 20.6 Rajasthan 45.5 38.3 31.5 27.3 47.1 53.4 58.0 59.5 7.5 8.2 10.4 13.3 Tamil Nadu 32.3 27.0 23.2 20.6 57.3 59.7 59.2 56.9 10.4 13.3 17.6 22.6 Telangana 37.0 30.0 26.0 23.0 53.8 59.4 60.5 58.8 9.2 10.6 13.5 18.2 Uttar Pradesh 47.6 39.4 32.6 27.7 44.6 52.7 57.9 60.3 7.8 7.9 9.5 12.0 Uttarakhand 42.2 35.2 29.4 24.1 48.8 55.1 58.6 60.6 9.0 9.7 12.1 15.3 West Bengal 37.1 29.1 24.2 21.9 54.4 59.8 60.6 58.4 8.5 11.1 15.2 19.7 Source: Census, IIPS projections.  India's Demography at 2040: Planning Public Good Provision for the 21st Century 139 high and as large as 30 per cent in Bihar rise through 2041 in states lagging behind by 2041. Meanwhile, the share of elderly in the demographic transition, particularly population in these states will still be below Bihar, Uttar Pradesh, Madhya Pradesh and 15 per cent through 2041. Rajasthan. In principle, the latter states with rising working-age population could meet the (iv) Implications for Working-Age labour deficit in many of the former ageing Population states. Current migration trends broadly 7.19 While most of the discussion on follow this pattern, and a study of this demographic dividend revolves around the phenomenon will be the subject of a future share of working-age population, changes Economic Survey. in the size of working-age population plays a key role in determining the size of labour III. POLICY IMPLICATIONS force and direction of inter-state labour OF AGEING migration. (i) Elementary Schools 7.20 Given changing age composition, 7.22 As of 2016, population in the 5-14 India’s working-age population will continue age-group, which roughly corresponds to the to increase through 2041, rising by 96.5 number of elementary school-going children, million during 2021-31 and by 41.5 million has already begun declining in India and during 2031-41 (Table 5). This will have across all major states except Jammu & implications for the required rate of job Kashmir. Population projections suggest that creation in the economy. As per the NSSO this trend will continue through 2041 (Table Periodic Labour Force Survey 2017-18, 6). The size of the 5-14 years population India’s labour force participation rate for the will drop sharply in Himachal Pradesh, age-group 15-59 years is around 53 per cent (80 per cent for males, 25 per cent for females). Uttarakhand, Tamil Nadu, Maharashtra, Depending on the trajectory of labour force Punjab, Andhra Pradesh and Karnataka by participation during 2021-41, additional jobs 2041. Note that it will decline even in the will need to be created to keep pace with the laggard states such as Bihar, Uttar Pradesh, projected annual increase in working-age Rajasthan and Madhya Pradesh. Overall, the population of 9.7 million during 2021-31 and number of school-going children in India will 4.2 million during 2031-41. Projecting labour decline by 18.4 per cent between 2021 and force participation is beyond the scope of this 2041. This will have very important social study, but this will be impacted by changes in and economic consequences. schooling years, age distribution and female 7.23 To understand the implications for the labour force participation. provision of elementary schools, we examine 7.21 The evolution of working-age the number of government and private population, moreover, will vary across states. schools per capita of 5-14 years population The size of working-age population will start and school enrolment at the national and to decline in 11 out of the 22 major states state level. In light of the projected decline in during 2031-41, including in the southern elementary school-going children, the number states, Punjab, Maharashtra, West Bengal of schools per capita will rise significantly in and Himachal Pradesh. On the other hand, India across all major states even if no more working-age population will continue to schools are added (Figure 7 and Figure 8). 140 Economic Survey 2018-19 Volume 1 Table 5: Population by Age Structure (in millions) for India and Major States, 2011-2041 0-19 years 20-59 years 60 years and above States 2011 2021 2031 2041 2011 2021 2031 2041 2011 2021 2031 2041 INDIA 494.7 464.2 415.8 381.0 611.7 751.6 848.2 889.7 104.2 131.1 179.3 239.4 Andhra 17.2 14.9 13.3 11.6 27.2 31.3 32.6 31.9 5.0 6.3 8.3 10.9 Pradesh Assam 13.3 11.9 10.5 10.2 15.8 19.0 21.7 22.2 2.1 2.6 3.9 5.5 Bihar 51.4 53.5 48.9 46.2 45.0 60.1 77.9 89.4 7.7 9.4 12.7 17.8 Chhattisgarh 10.8 10.3 9.4 8.8 12.7 15.7 17.8 19.0 2.0 2.6 3.5 4.7 Delhi 6.2 5.4 4.6 4.1 9.4 11.3 12.1 11.8 1.1 1.8 2.9 4.3 Gujarat 23.4 22.3 20.6 18.9 32.2 38.2 41.9 43.5 4.8 6.7 9.5 12.8 Haryana 10.2 9.4 8.5 7.8 12.9 16.0 17.9 18.6 2.2 2.7 3.6 5.0 Himachal 2.4 2.1 1.9 1.7 3.7 4.3 4.6 4.5 0.7 0.9 1.2 1.7 Pradesh Jammu & 5.5 4.6 3.6 3.6 6.1 7.8 9.3 9.3 0.9 1.2 1.9 2.7 Kashmir Jharkhand 15.2 14.6 12.8 12.5 15.5 19.8 24.1 26.2 2.4 3.2 4.4 6.0 Karnataka 21.9 19.6 17.0 14.9 33.4 38.8 41.2 40.8 5.8 7.3 9.9 13.0 Kerala 10.5 9.8 9.3 8.8 18.8 20.0 20.3 20.0 4.2 5.8 7.6 9.0 Madhya 31.8 31.3 28.4 25.9 35.1 44.3 51.4 56.2 5.7 6.9 9.4 12.7 Pradesh Maharashtra 40.7 35.6 30.4 27.1 60.5 71.2 76.6 75.4 11.1 13.9 18.8 25.2 Odisha 16.0 14.8 13.7 13.1 21.9 25.7 28.1 28.7 4.0 4.9 6.5 8.3 Punjab 9.9 8.4 7.4 6.6 15.0 17.7 18.6 18.3 2.9 3.7 4.9 6.4 Rajasthan 31.2 30.1 27.2 25.3 32.3 42.0 50.0 55.1 5.1 6.5 9.0 12.3 Tamil Nadu 23.3 20.6 18.1 16.0 41.3 45.5 46.3 44.2 7.5 10.1 13.7 17.5 Telangana 13.0 11.4 10.4 9.4 18.9 22.6 24.2 24.0 3.2 4.0 5.4 7.4 Uttar Pradesh 95.1 90.3 81.8 74.5 89.1 120.9 145.0 162.2 15.6 18.1 23.8 32.3 Uttarakhand 4.3 4.0 3.6 3.1 4.9 6.3 7.1 7.7 0.9 1.1 1.5 2.0 West Bengal 33.8 28.5 24.9 22.8 49.7 58.5 62.2 60.9 7.8 10.8 15.6 20.5 Source: Census, IIPS projections.  India's Demography at 2040: Planning Public Good Provision for the 21st Century 141 Table 6: Population for 5-14 years (in millions) for India and Major States, 2011-41 Projected change States 2011 2016 2021 2031 2041 during 2021-41 (%) INDIA 260.54 243.60 234.64 202.96 191.51 -18.38 Andhra Pradesh 8.72 7.88 7.44 6.52 5.82 -21.78 Assam 7.04 6.60 5.90 5.14 5.22 -11.47 Bihar 29.07 28.25 26.95 24.46 23.10 -14.28 Chhattisgarh 5.65 5.33 5.28 4.45 4.46 -15.60 Delhi 3.19 2.94 2.71 2.26 2.06 -24.07 Gujarat 12.03 11.41 11.29 10.11 9.42 -16.57 Haryana 5.17 4.88 4.76 4.16 3.91 -17.87 Himachal Pradesh 1.23 1.14 1.05 0.95 0.88 -16.59 Jammu & Kashmir 2.83 2.86 2.35 1.77 1.86 -20.65 Jharkhand 8.27 7.92 7.63 5.90 6.44 -15.60 Karnataka 10.99 10.34 9.95 8.32 7.46 -25.00 Kerala 5.38 5.12 4.89 4.64 4.42 -9.56 Madhya Pradesh 16.85 15.87 15.99 13.74 12.90 -19.34 Maharashtra 20.63 19.43 17.99 14.85 13.67 -24.02 Odisha 8.45 7.83 7.37 6.75 6.60 -10.43 Punjab 4.96 4.49 4.11 3.69 3.27 -20.35 Rajasthan 16.49 15.59 15.41 13.09 12.70 -17.57 Tamil Nadu 11.74 10.94 10.31 8.98 8.00 -22.40 Telangana 6.64 6.01 5.64 5.17 4.70 -16.57 Uttar Pradesh 51.35 46.06 45.62 39.36 37.45 -17.91 Uttarakhand 2.21 2.00 2.11 1.65 1.54 -26.98 West Bengal 17.43 15.78 14.05 12.38 11.55 -17.79 Source: Census, Sample Registration System, IIPS projections. 142 Economic Survey 2018-19 Volume 1 Figure 7: Number of Elementary Schools in India per 1 million of 5-14 Years Population under Status Quo 8000 250 240 7500 230 Schools per 1 million 7000 220 of 5-14 yrs population 5-14 yrs population in 210 6500 million (RHS) 200 6000 190 5500 180 2016 2021 2031 2041 Source: Unified District Information on School Education, Sample Registration System, IIPS. Note: Calculations are based on projected 5-14 years population for 2021-41 from IIPS and number of elementary schools at 2016 levels. Figure 8: Number of Elementary Schools 7.24 States such as Himachal Pradesh, per 1 million of 5-14 Years Population Uttarakhand, Andhra Pradesh and Madhya under Status Quo Pradesh have more than 40 per cent of HP elementary schools with fewer than 50 JK students enrolled (Figure 9). Similar trends UK AS Figure 9: Per cent of Elementary Schools CG MP with Less Than 50 Students Enrolled AP HP OR JK TL UK PB AP WB AS KA OR RJ 2016 MP CG MH 2041 MH TN KA JH TL UP WB HR JH 2005-06 GJ RJ KL PB 2016-17 TN BR KL DL GJ 0 3000 6000 9000 12000 15000 18000 21000 HR UP BR Source: Unified District Information on School DL Education, Sample Registration System, IIPS. 0 10 20 30 40 50 60 70 80 Note: Calculations are based on projected 5-14 years population for 2041 from IIPS and number of Source: Unified District Information on School elementary schools at 2016 levels. Education.  India's Demography at 2040: Planning Public Good Provision for the 21st Century 143 exist in Chhattisgarh, Assam and Odisha emphasis from quantity towards quality and with large number of schools per capita and efficiency of education. small school size. In fact, the number of (ii) Health Care Facilities elementary schools with less than 50 students has increased over the past decade across all 7.26 Access to health care is still a major major states except Delhi. challenge in India. If India’s hospital facilities remain at current levels, rising population 7.25 The “optimal” school size varies over the next two decades (even with slowing widely according to terrain and urban population growth rates) will sharply reduce clustering, but this sharp increase in number the per capita availability of hospital beds of elementary schools per capita needs to be in India across all major states (Figure 10). carefully studied. The time may soon come in India already fares poorly relative to other many states to consolidate/merge elementary emerging and developed economies in terms schools in order to keep them viable. Schools of per capita availability of hospital beds located within 1-3 kms radius of each other (Figure 11). can be chosen for this purpose to ensure no significant change in access. This would 7.27 States with high population growth also be in line with the experience of other (Table 2) are also the ones with the lowest per major economies witnessing a decline in capita availability of hospital beds (Figure elementary school-going population, such as 12). Hence, there is a straightforward case Japan, China, South Korea, Singapore and for expanding medical facilities in these Canada, which have implemented policies to states. For states in the advanced stage of merge or close down schools. Note that this is demographic transition, however, the rapidly not about reducing investment in elementary changing age structure (Table 5) will mean education, but an argument for shifting policy that the type of health care services will have Figure 10: Number of Government Hospital Beds in India per 1 million Population under Status Quo 500 Hospital beds per 1 million population 1550 Total Population in million (RHS) 1500 475 1450 450 1400 1350 425 1300 400 1250 2016 2021 2031 2041 Source: Central Bureau of Health Intelligence, Sample Registration System, IIPS. Note: Calculations are based on projected population for 2021-41 from IIPS and number of government hospital beds at 2016 levels. 144 Economic Survey 2018-19 Volume 1 Figure 11: Number of Hospital Beds per 10,000 Population 150 125 100 75 50 25 0 Brazil U.K. Malaysia India China Canada France S.Korea Japan Mexico U.S. Germany Source: WHO. Note: Data is as of 2011 for India, 2012 for other countries. Figure 12: Number of Government to adapt towards greater provision of geriatric Hospital Beds per 1 million Population care. A major problem with planning for the under Status Quo provision of medical facilities is the paucity of DL specific data, especially on private hospitals. HP Available data on government hospitals have KL been used here but it is clear even from basic WB JK research that it does not provide a true picture TN of the quality or quantity of health care in the KA country. UK AS GJ (iii) Retirement Age AP MH 7.28 India’s healthy life expectancy at the age PJ 2016 of 60, which is the average number of years a TL 2041 60-year old person is expected to live in OR RJ full health taking into account the impact of MP diseases and injuries, has continually increased CG over the years for both men and women. HR JH Healthy life expectancy at the age of 60 now UP stands at 12.9 years (12.5 years for males; BI 13.3 years for females), though it is still much 0 200 400 600 800 1000 1200 1400 lower than that for other major developed and Source: Central Bureau of Health Intelligence, Sample emerging economies (Figure 13). Registration System, IIPS. 7.29 Due to ageing population and increasing Note: Calculations are based on projected population for 2041 from IIPS and number of government hospital pressure on pension funding, many countries beds at 2016 levels. have begun raising the pensionable retirement  India's Demography at 2040: Planning Public Good Provision for the 21st Century 145 Figure 13: Healthy Life Expectancy at Age of 60 (years) 22 20 2000 2016 18 16 14 12 10 China U.K. Singapore Japan France Canada Australia Brazil South Africa S.Korea Turkey Malaysia India New Zealand Switzerland Germany U.S. Mexico Thailand Philippines Indonesia Source: WHO. age. Countries such as Germany, France and Table 7: Retirement Age Reforms Being U.S. have increased the retirement age. Some Implemented or Under Consideration in countries such as Australia and U.K. used Major Economies to allow women to retire earlier than men Country Retirement Age Reforms but have changed the rules to bring them at Retirement age to increase par. Many countries such as Germany, U.K. Germany gradually to 66 by 2023 and to and U.S. have signalled that they will keep 67 by 2029 increasing the retirement age according to a Pension benefit age to rise pre-set timeline (Table 7). In the U.K., for U.S. gradually to reach 67 for those example, the state pension age will increase born in 1960 or later for both men and women to 66 by October State pension age to increase 2020. The U.K. government is planning for both men and women to 66 further increases in the retirement age to 67 U.K. by October 2020, and further to spanning the years 2026-28 and to 68 during 67 between 2026-28 and to 68 2044-46. between 2044-46 Pensionable age scheduled to 7.30 Given that life expectancy for both Australia increase gradually to 67 by 2023 males and females in India is likely to continue rising, increasing the retirement age Under consideration to raise the retirement age for women by 1 for both men and women going forward could year every three years and for be considered in line with the experience China men by 1 year every six years so of other countries (Figure 14). This will be that by 2045, the retirement age key to the viability of pension systems and for both men and women would would also help increase female labour force be 65 participation in the older age-groups. Since Under consideration to raise the Japan an increase in the retirement age is perhaps retirement age to 70 inevitable, it may be worthwhile signalling Source: Country-specific pension documents and this change well in advance – perhaps a government press releases. 146 Economic Survey 2018-19 Volume 1 Figure 14: Retirement Age (years) 70 Male Female 65 60 55 50 45 40 Australia U.K. Japan Canada France India Mexico Singapore Malaysia China Thailand U.S. S. Korea Turkey Germany Source: Country-specific pension documents, OECD. decade before the anticipated shift – so that time. This is even true for a commonly the workforce can be prepared for it. This discussed topic such as the demographic will also help plan in advance for pensions dividend. It is important, therefore, that and other retirement provisions. working assumptions and projections are constantly revised in light of new evidence IV. CONCLUSION (especially in the age of big data) for areas 7.31 This chapter is not merely an attempt such as urbanization, energy requirements, to look at the changing population dynamics forest cover, water availability, climate of the country but is meant as an illustration change and other long-term factors that have of how several of the common working a large impact on the socio-economic context assumptions of economists and policy- in which government policy interventions makers need to be revisited from time to play out. CHAPTER AT A GLANCE  India is set to witness a sharp slowdown in population growth in the next two decades. Although the country as a whole will enjoy the “demographic dividend” phase, some states will start transitioning to an ageing society by the 2030s.  A surprizing fact is that population in the 0-19 age bracket has already peaked due to sharp declines in total fertility rates (TFR) across the country. The national TFR is expected to be below replacement rate by 2021.  Working-age population will grow by roughly 9.7mn per year during 2021-31 and 4.2mn per year in 2031-41.  The proportion of elementary school-going children, i.e. 5-14 age group, will witness significant declines. Contrary to popular perception, many states need to pay greater attention to consolidating/merging schools to make them viable rather than building new ones.  At the other end of the age scale, policy makers need to prepare for ageing. This will need investments in health care as well as a plan for increasing the retirement age in a phased manner.  India's Demography at 2040: Planning Public Good Provision for the 21st Century 147 REFERENCES Transactions of the Royal Society of London (1825). Brass William, Ansley J. Coale, Paul Demeny, Don F. 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