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India has been witnessing significant demographic changes due to decades of family planning policies. This has led to declining fertility rates in certain States, particularly in the southern and smaller northern regions.

Introduction: Demographic Shift in India

• Southern States’ Fertility Trends: States like Tamil Nadu, Kerala, Andhra Pradesh, and Telangana have fertility rates below the replacement level (around 1.4–1.5), while Bihar, Uttar Pradesh, and Madhya Pradesh have higher fertility rates (2.6–3).
• Ageing Population: Southern States face the challenge of an ageing population, with Kerala projected to have 22.8% of its population aged 60+ by 2036, while Bihar will have only 11%.

Economic and Health Impact of Population Decline

• Economic Consequences:
  • Dependency Ratio: The old-age dependency ratio (the number of elderly for every 100 working-age individuals) has increased significantly in some States. Kerala, for example, had a ratio of 26.1 in 2021, signaling a crisis point.
  • Loss of Demographic Dividend: States with declining fertility rates face the loss of a demographic dividend, i.e., the economic benefit from a large working-age population, which is increasingly burdened by elderly dependents.
  • Health Expenditure: Rising healthcare costs, especially for cardiovascular diseases in southern States, will strain public health systems. The southern States, although comprising one-fifth of India's population, spent 32% of the country’s total out-of-pocket expenditure on cardiovascular diseases in 2017-18.
• Challenges of Low Fertility:
  • Declining Labour Force Participation: Policies encouraging higher fertility may also reduce women’s labour force participation, undermining the economic growth of these States.
  • Economic Pressures: Southern States, despite higher tax contributions, face a diminished share of central resources due to slower population growth. This is a point of concern in inter-State fiscal relations.

Political Implications of Uneven Population Growth

• Impact on Federal Structure:
  • The uneven population growth across States will lead to significant changes in the delimitation of constituencies after the current freeze on seat allocation in Parliament expires in 2026.
  • Redistribution of Lok Sabha Seats: Northern States like Uttar Pradesh and Bihar will likely gain more seats, while southern States like Tamil Nadu, Kerala, and Andhra Pradesh will lose seats due to their declining population shares.
• Challenges in Federal Relations:
  • Southern States’ economic contributions through taxes are disproportionate to the resources they receive from the central pool, leading to growing tensions between high-growth and slow-growth regions.
  • The shift in political power post-delimitation could increase regional disparities, potentially leading to political tensions between States.

Solutions and Policy Recommendations

• Pro-Natalist Policies:
  • Southern States are considering pro-natalist policies to incentivize higher fertility rates. However, such measures have been largely unsuccessful internationally, especially when women’s economic independence and educational choices are restricted.
  • International Experience: Attempts to incentivize childbearing, without addressing broader socio-economic factors like gender equality, have generally failed in other nations. Maternity benefits, gender-neutral parental leave, and childcare support are key to increasing fertility sustainably.
• Gender Equity and Work-Family Balance:
  • Work-family policies that support paid maternity and paternity leaves, affordable childcare, and gender-neutral employment policies are essential to empower women to balance family and career.
  • Studies indicate that countries with higher gender equity have better fertility rates because women are less likely to forgo childbearing for career reasons.
• Increasing Retirement Age:
  • One way to reduce the old-age dependency ratio is to increase the retirement age, which would allow older workers to remain employed longer and support a sustainable economy.
  • Social Security and pension reforms should also be considered to accommodate the ageing workforce and reduce the economic burden on younger generations.
• Managing Migration:
  • Migration policies should be adjusted to manage the influx of economic migrants into southern States, who contribute to the economy but continue to be counted in their home States for fiscal and political purposes.
  • Migration-based policy reforms could address the challenge of an ageing population in states with declining fertility while ensuring equitable resource distribution across States.