Economy

Celebrations of India’s Demographic Dividend Ignore its Evergrowing Elderly Population

A new report shows that a considerable portion of India’s population aged in the last sixty years, and experts are saying that the government must find ways of gainfully engaging senior citizens in the economy.

Credit: Reuters/Reinhard Krause.

Credit: Reuters/Reinhard Krause.

While talking about India’s potential for economic growth Prime Minister Narendra Modi never tires of referring to the country’s demographic dividend.

Essentially, this is a reference to the population of 356 million between in the ages of 10 and 24, the highest of its kind in the world. Modi believes that it can chauffeur the Indian economy to desired goalposts, provided the people in this age bracket are given adequate skills.

Modi is not alone in promoting this idea. In fact, it was the earlier UPA-led dispensation that posited India’s demographic dividend as the possible panacea of the country’s economy. The fact that India will become the world’s youngest country by 2020, with a median age of 29, has prompted the Modi government to set up the Ministry of Skill Development, which has become the nodal ministry of flagship initiatives like Skill India. Launched in July 2015, it is aimed at training 500 million youth for various employment opportunities by 2020.

However, data provided in a recent report by Modi’s government shows that even though India may have the “demographic gift” of a young population, the bigger picture is more complicated when one takes the rise of the country’s elderly population into account.

The report titled Elderly In India: Profile and Programmes 2016 was put together by the Central Statistics Office (CSO) under the Ministry of Statistics and Programme Implementation (MOSPI) and put up on the ministry’s website earlier this week. It uses data collated from various census reports and reveals that a substantial percentage of the population experienced ageing in the last 60 years.

Source: Ministry of Statistics and Programme Implementation, Government of India.

Source: Ministry of Statistics and Programme Implementation, Government of India.

A dip into the data shows that the share of the elderly in the population as a whole has risen from 5.5% in 1951 to 8.6% in 2011. Between 2001 and 2011, there has been a 35.5% increase in that bracket (from 7.66 crores to 10.38 crores).

Source: MoSPI.

Source: Ministry of Statistics and Programme Implementation, Government of India.

The United Nations Population Fund (UNFPA) defines demographic dividend as “the economic growth potential that can result from shifts in the population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older).” This means, as the UNFPA says, it is “a boost in economic productivity that occurs when there are growing number of people in the workforce relative to the number of dependents”. 

However, the CSO report shows that the old-age dependency ratio in India is on an upward curve – it climbed from 10.9% in 1991 to 14.2% in 2011. This is the ratio of the number of people aged 60 years and above to the number of people aged between 15 to 59 years.

Source: Ministry of Statistics and Programme Implementation, Government of India.

Source: Ministry of Statistics and Programme Implementation, Government of India.

It is true that the size of the population of working age in India has increased by 30 crores between 1991 and 2013, according to UNDP’s latest Regional Human Development Report. However, the elderly population has also increased steadily, from 57 million (excluding Jammu and Kashmir) in the 1991 census to 8.6% of the total population by 2011.

Source: Ministry of Statistics and Programme Implementation, Government of India.

Source: Ministry of Statistics and Programme Implementation, Government of India.

By 2021, this figure is likely to jump to a whopping 20%, according to the 2014 State of Elderly in India report released by Helpage India.

“The CSO report states data which is already four years old. Considering that 10,500 new people enter the bracket of 60 and above in India everyday, you can imagine how much that number has risen by now,” says Himanshu Rath, founder of the Delhi-based senior citizens’ rights organisation Agewell Foundation.

Rath does a quick decoding of the 2011 data to hold up the futility of depending upon the demographic dividend, “As per the latest census, 36% of the population is below the age of 18. Add to it the nearly 9% elderly population, which together makes about 44%. So 44% of the population is presently economically non-productive. Let’s divide the rest of the 56% into two halves – men and women. Let’s say all men are earning members of their families, but not all women are. So it basically shows a small percentage of people is taking care of a large population. With the fertility growth dipping in India, one can clearly see that the number of senior citizens is only going to grow.”

Professor Moneer Alam of the Population Research Centre at the New Delhi-based Institute of Economic Growth agrees. “The failure to look into the structure of population from the point of ageing must be attributed to our development economists. Most define the structure using usual parameters like the male/female ratio, size of the population, etc. So the development issues pursued by both the previous and the present government have also neglected important demographic parameters like decline in the fertility rate, rise in life expectancy, dip in adult mortality rate, etc., and how they can dictate the economy in coming years,” says Professor Alam.

Here, Japan presents itself as a relevant example to the world. After having reaped the benefits of a young population in the 1960s and the 1970s, Japan is today the world’s oldest nation with 25% of its population aged 65 and above. By 2040, the percentage of its greying population is expected to rise to 36%. It now stares at an imbalance between its shrinking working population and a rising elderly population. Among various suggestions mooted in an article published in the March 2015 edition of McKinsey Quarterly on how to narrow the gap, one is the need to help seniors to go on working. It mentions Japan’s Ministry of Health, Labour and Welfare findings which reveal that “the biggest labour shortage lies in the welfare sector.”

“11% of seniors who want to continue working said they would be willing to do this kind of job, according to a 2013 survey by the Japanese Government. If, say, 10% of the currently employed seniors in the 65-74 age range worked several days a week as nursing-care staff, Japan could have 7,00,000 additional caregivers by 2025,” the article says.

According to a UN study from last year, India will surpass China as the world’s most populous country in 2022. Rath points out, “This should not make the government think that a population larger than China will invariably be an advantage for us. The government should see how much of it will become non-productive by that year. Considering the government has no plan in place to gainfully utilise the senior citizens who are in good health, it will not be that easy for India even if it wins the tag of the world’s most populous country from China.” Alam, who has been researching the link between development and demographic change, suggests, “The first corrective measure should be for the government to recognise the problem instead of running away from it. Secondly, it should find ways to make this large chunk of the population economically viable. This section of people can certainly bring more dynamism to the Indian labour market, a factor which is often overlooked even by economists. Recently, the Chief Justice of India suggested bringing in retired judges to address the issue of three crore pending cases. There can be so many other ways of utilising the experience of the greying generation.”

Rath’s Foundation runs what is perhaps the only employment exchange for senior citizens in the country. “Besides helping retired people get jobs, we have also devised training programmes on how to become home tutors, barefoot photo journalists, barefoot social auditors, etc. Presently, about a half a million retired people are engaged across the country as tutors thanks to our employment exchange.”

He adds, “However much we do, it will still be a drop in the ocean. What is required is a formal policy decision. The government should not make the mistake that the Chinese did. China brought in the one-child policy for so many years but didn’t think about what to do with its greying population. India should concentrate on training youth but should also impart skills to the retired so that they end up contributing to economic growth instead of becoming a disadvantage for the country in the future.”