Looming Demographic Shift, Transformation from Young Nation to Ageing Society

India’s significant demographic transformation highlights its shift from a young nation to an aging society. The key driver is a plummeting fertility rate. The Lancet report predicts a drastic decline in the total fertility rate (TFR) to 1.29 by 2050, which is well below the replacement rate. This means, on average, each woman will have fewer children than needed to maintain the current population level.

India’s Approaching Age Wave

The ramifications of this trend are stark. The UN Population Fund estimates a staggering doubling of the elderly population (above 60) by 2050. One in five Indians will be a senior citizen, placing immense strain on social security and healthcare systems. Learning from the global experience is crucial. China’s economic boom coincided with a large working-age population. However, their recent fertility decline threatens future growth, highlighting the importance of capitalizing on the demographic dividend.

India is on the brink of a significant demographic shift, transitioning towards an aging society within the next three decades. Reports from renowned sources like the Lancet and the UN Population Fund (UNFPA) India highlight the impending increase in the elderly population, projecting a substantial rise from 149 million in 2022 to 347 million by 2050. This shift brings to light several challenges and opportunities that India needs to address proactively.

The article proposes a multi-pronged approach to navigate this demographic shift:

• Seize the Demographic Dividend Window: India has a limited window, peaking in the late 2030s, to leverage its young workforce. Proactive measures are essential to maximize this opportunity.
• Invest in Skill Development: Bridging the skill gap is critical. The workforce needs to be equipped for the knowledge economy to ensure continued economic development.
• Create Formal Sector Jobs: The focus should shift towards generating sustainable, formal sector jobs outside of agriculture to improve living standards and national productivity.
• Prepare for an Ageing Population: Robust social security and healthcare systems are necessary to support the growing elderly population and ensure their well-being.
• Adapt Policies to Regional Variations: TFRs vary significantly across Indian states. Policymakers need to adopt adaptable strategies to address the diverse pace of aging in different regions.

Navigating Demographic Transitions: Insights from China and India:

China’s experience offers valuable insights into demographic shifts and their economic implications. With its working-age population surpassing 50% in 1987, China witnessed remarkable economic growth. However, recent years have seen a sharp decline in the total fertility rate (TFR), leading to a significant decrease in the working-age populace despite government efforts to boost population growth. This trend mirrors challenges observed in developed nations when fertility rates dip below replacement levels.

India’s TFR, currently standing at 1.9, is slightly below replacement level. According to UNPF projections, India’s working-age population is set to peak in the late 2030s to early 2040s. This presents policymakers with a critical window to optimize India’s demographic dividend, echoing China’s strategy from the late 1980s to the early 2000s. Urgent action is required to address skill shortages, strengthen the knowledge economy, and prioritize job creation beyond agriculture, particularly in the formal sector.

In conclusion, the article emphasizes the urgency for Indian policymakers to acknowledge and prepare for this significant demographic change. A proactive approach that invests in skilling the youth, creating quality jobs, and strengthening social security nets will be paramount in ensuring India’s future prosperity as its population ages.

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