April 14, 2023 is expected to herald a watershed moment for India. That’s when the country will overtake China as the world’s most populous nation. India is currently home to more than 1.39 billion people, compared to 1.41 billion in China. But with 86,000 babies born here every day, and 49,400 in China, India is on course to seize the crown in just three months from now, per the United Nations Population Fund. The most populous nation tag has a side story too: The baby boom in the north, led by Bihar and Uttar Pradesh, will be accompanied by a rapid rise of the ageing population in the south. For any government, the twin challenge can be a nightmare, and the new year could be a good beginning to deeply introspect on the right policy framework.
Let’s consider the first. India is expected to provide more than a sixth of the increase of the world’s population of working age (15-64) between now and 2050. One in five people below 25 years in the world is from India, and 47% of Indians are below the age of 25. Conventional wisdom says this is a blessing for any country. Yet, it is clear that time is running out for India to reap a demographic dividend. If the young people do not pick up skills—the India Skills Report 2022 suggests that only 48.7% of India’s educated youth are employable—or some sort of vocation, it is hard to see how India will ever become a decent, middle-class society. Failure to do so will entail a huge economic cost; today, India’s digital skills gap poses the greatest gross domestic product (GDP) growth risk (an average of 23 percentage points every year) among the G20 countries. If the economic backbone of the country does not change to further enable entrepreneurship and promote large-scale enterprise, it will miss its last chance at mass employment. The structural unemployment problem carries within it the roots of social unrest. Allied with this is the poor state of education and healthcare, and the nutrition deficit that shows up in extensive stunting and wasting among children who are tomorrow’s workforce.
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The second aspect of the story—ageing population—also requires rigorous planning as India is expected to soon have over 10% of the population who are greying. That presents significant problems in terms of employment and social security, but most of all for healthcare, where spending is still very low. The point is that India is ageing before becoming rich. A study by the UN shows that poverty rates are higher among older persons, with a large proportion of them being economically fully or partially dependent on others for livelihood in the absence of proper social security coverage. There is a plethora of schemes for the elderly, but they are tokenistic and lack the depth and financial support needed to make any meaningful impact.
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The other dimension that needs to be looked at is urban planning. By 2035, 675 million Indians will live in cities and by 2050, more Indians will live in urban areas than villages. But India’s cities are already some of the biggest and overburdened in the world, lacking adequate basic amenities such as housing, water, transport and sanitation infrastructure. Resolving these issues require a long-term vision—but policymakers must take the first decisive steps as India steps into a new year. That will decide whether the world’s most populous nation tag is a boon or a curse.