It’s difficult to imagine India as an ageing society, given that it has—by far—more young people than any other country on earth. Within Asia, Japan, South Korea, Taiwan and Hong Kong all have significantly greyer population profiles. Indeed, India is still at an early stage of demographic transition, with only around 10% of its population over the age of 60. But the share of the population that is over 60 is expected to almost double to nearly 1 in 5 by 2050.
Factors contributing to this pronounced ageing trends are late marriage, greater longevity and declining fertility. India’s national fertility rate has already fallen below the replacement level. Modelling carried out by the University of Washington estimates that the country’s population may peak at around 1.6 billion in 2048, when the over-60 population is expected to exceed 300 million. From that time, the country’s population is expected to decline by nearly one-third to around 1.09 billion in 2100.
What does it mean for India?
These trends have profound implications for the South Asian giant’s economy, labour force and society. Research conducted in other countries that have aged faster than India shows that older workforces are less productive on a per-worker basis, contributing to lower economic growth. India’s demographic dividend, generated by having a population with a high proportion of working-age persons, will begin to fade. The under-19 age population has already begun to decline.
To ensure sustained, inclusive growth, and a rise out of the ranks of lower middle-income countries, India needs to do more to nurture, educate and skill its young population. The country is ranked 116th in the World Bank Human Capital Index, which measures which countries are best in mobilising the economic and professional potential of its citizens. India’s public education system suffers from a lack of teachers and poor teaching and training, and there is a lack of affordable post-secondary education as reflected by a tertiary gross enrolment rate of just 25.8%. Looking forward, Indian states will feel the pressure to reduce the number of elementary schools as the number of children falls over the coming decades.
While still boasting a comparatively young population, India will have to adapt to a steady pace of population ageing that will test its resilience and social cohesion over the coming decades.
In addition to investing more in preparing the youth for a tech-infused, globally-connected economy, India needs to do more to improve its healthcare system, which was severely strained during the COVID-19 pandemic. Another priority is strengthening its social protection system to address extreme poverty and unemployment, and ensure adequate resources for its growing elderly population. According to the ILO, India has a large number of social protection schemes, both at the central and state levels, which cater to different segments of the population. However, the size, informality and heterogeneity of the workforce leads to low levels of social protection and high vulnerability among India’s workers.
Life expectancy in India increased from 56.2 to 70.8 years between 1970-1975 and 2013-2017, with women enjoying a life expectancy 2.6 years longer than men at birth. Initiatives to support the elderly need to take into account the disproportionate share of women in the older population. In addition, Indian women are less likely than men to have accumulated pensions, as their labour force participation is much lower. India’s typical retirement age of 60 will become untenable as the country ages and the dependency ratio rises. The country will need more workers contributing to pension schemes serving an enlarged population of retirees. Further, efforts will be needed to increase the female labour force participation rate, which tumbled to a record low of just 15.5% during the first few months of the pandemic.
What steps can India take?
As recommended in an IMF report on policy responses to ageing in G-20 economies, India should consider policies to increase competition and innovation, and address the fiscal impacts of ageing. Rapid adoption and diffusion of new technologies can boost productivity and facilitate mobility within the community. Measures include making public transport accessible to all, increasing the use of robots in the workplace and at home, and integrating autonomous vehicles into the transportation ecosystem. Technology can also improve access to medical and old-age care, and enhance the independence of older persons. Examples include telehealth networks, wearable devices to monitor vitals and exoskeletons.
The government is seeking to increase the responsibility placed on adult offspring to provide financial support to ageing parents, but the public sector cannot avoid taking on a bigger role in addressing needs of the elderly, particularly as family size shrinks. Striking inequalities between men and women, and people of different castes and religious groups, will be reinforced in the growing older population without more determined government action to promote inclusion.
India’s demographic dividend, generated by having a population with a high proportion of working-age persons, will begin to fade. The under-19 age population has already begun to decline.
This year marks the beginning of the United Nations Decade of Healthy Ageing, which aims to foster healthy ageing and improve the lives of older people and their families and communities. The global initiative seeks to engender fundamental shifts in actions undertaken in response to ageing societies, as well as in the way that people think about age and ageing. The four areas for action under this initiative are highly relevant for India: developing age-friendly environments, combatting ageism, offering integrated healthcare, and providing access to quality long-term care for individuals who are no longer able to care for themselves.
While still boasting a comparatively young population, India will have to adapt to a steady pace of population ageing that will test its resilience and social cohesion over the coming decades. To ensure that the older people are integrated into the country’s economic and social fabric, and that society benefits from rising productivity and inclusive growth, policymakers need to factor demographic considerations into plans for post-pandemic recovery.
Bhargavi is a second year public policy student at the Harris School of Public Policy, University of Chicago. Before this, she completed a postgraduate diploma in Liberal Studies from Ashoka University, India and a bachelor’s in economics from the University of Delhi. She has worked in the policy space of behavioural sciences, sexual and reproductive health, and criminal justice against women. Bhargavi also leads a youth collective called ‘Sang’ which is working with underprivileged communities in India to help fight poverty and injustices against women.
Bart W. Édes
Bart W. Édes is a policy analyst, commentator, and author of Learning From Tomorrow: Using Strategic Foresight to Prepare for the Next Big Disruption. He is a Professor of Practice at McGill University, and Distinguished Fellow at the Asia Pacific Foundation of Canada. Édes focuses on developing Asian economies, international trade and sustainable development, and transformative trends reshaping the world.