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India - demographics - Part 1
1.0 INTRODUCTION & DEFINITIONS
The population of India as on 1st March, 2011 was 121,01,93,422 compared to a total of 102,87,37,436 in 2001, according to the provisional population totals of Census 2011. In absolute terms, the population of India has increased by more than 181 million during the decade 2001-2011. The absolute addition to the population during the decade 2001-2011 is slightly lower than the population of Brazil, the fifth most populous country in the world!
However, the total fertility rates across states in India have dropped sharply over the past 15 years, and India is on the verge of reaching the replacement fertility rate of 2.1, by 2021. India is also blessed with a demographic dividend today, where the working age population is more than the dependant population. In this lecture, we will study all social, technical and economic aspects of Indian demography to understand it in totality.
1.1 Demographic indicators
Demographic indicators of a country reveals its population size, decadal growth rate of population, territorial distribution, gender composition, changes therein and the components of changes such as nativity, mortality and social morbidity. Demographic indicators can be divided in two parts – Population Statistics and Vital Statistics.
Population Statistics deals with size and growth of population, sex ratio, density of population etc. while Vital Statistics deals with birth rate, death rate, and natural growth rate, life expectancy at birth, mortality and fertility rates. State/UT wise performance of these indicators helps us to identify areas that need policy and programme interventions, setting near and far-term goals, and deciding priorities, besides understanding them in an integrated structure. Data in this section has been taken mainly from the “Census of India”.
1.2 Definitions
To under demographic issues, certain technical concepts are frequently used. We will learn about those now.
A.Crude Birth Rate (CBR) : The crude birth rate is the number of live births occurring among the population of a given geographical area during a given year, per 1,000 mid-year total population of the given geographical area during the same year. Formula for CBR = (Number of live births in a year / Mid year population) x 1000 Example: If a country has a population of 1 crore, and 1,50,000 babies were born last year in that country, the crude birth rate is 15 per 1,000. (or 1.5 %) The crude birth rate is called "crude" because it does not take into account age or sex differences among the population. In our hypothetical country, the rate is 15 births for every 1,000 people, and it is possible that around 500 of those 1,000 people are men, and of the 500 who are women, only a certain percentage are capable of giving birth in a given year. Crude birth rates of more than 30 per 1,000 are considered high, and rates of less than 18 per 1,000 are considered low. The global crude birth rate in 2016 was 19 per 1,000.
B.Crude Death Rate (CDR) : The crude death rate is the number of deaths occurring among the population of a given geographical area during a given year, per 1,000 mid-year total population of the given geographical area during the same year. Formula for CDR = (Number of deaths in a year / Mid year population) x 1000 Example: If a country has a population of 1 crore, and 1,10,000 people died last year in that country, the crude death rate is 11 per 1,000. (or 1.1 %) Crude death rates of below 10 are considered low, while crude death rates above 20 per 1,000 are considered high. Crude death rates in 2016 ranged from 2 in Qatar, the United Arab Emirates, and Bahrain to 15 per 1,000 in Latvia, Ukraine, and Bulgaria. The global crude death rate in 2016 was 7.6, and in the United States, the rate was 8 per 1,000. The crude death rate for the world has been on the decline since 1960 when it came in at 17.7. Global trend - Crude death rate has fallen around the world (and dramatically in developing economies) due to longer life spans brought about by a better food supplies and distribution, better nutrition, better and more widely available medical care (and the development of technologies such as immunizations and antibiotics), improvements in sanitation and hygiene, and clean water supplies. Much of the increase in world population over the last century overall has been attributed more to longer life expectancies rather than an increase in births. The hype surrounding need of a "population control law" in India gets punctured if this simple fact is considered!
C.Natural Growth Rate (NGR) : The rate of natural increase refers to the difference between the number of live births and the number of deaths occurring in a year, divided by the mid-year population of that year, multiplied by a factor (usually 1,000). It is equal to the difference between the crude birth rate and the crude death rate. Formula for NGR = CBR - CDR
D.Total Fertility Rate (TFR) : The total fertility rate in a specific year is defined as the total number of children that would be born to each woman if she were to live to the end of her child-bearing years and give birth to children in alignment with the prevailing age-specific fertility rates. It is calculated by totalling the age-specific fertility rates as defined over five-year intervals. Assuming no net migration and unchanged mortality, a total fertility rate of 2.1 children per woman ensures a broadly stable population. Together with mortality and migration, fertility is an element of population growth, reflecting both the causes and effects of economic and social developments. The reasons for the dramatic decline in birth rates during the past few decades include postponed family formation and child-bearing and a decrease in desired family sizes. This indicator is measured in children per woman.
E.Age Specific Fertility Rate (ASFR) : The age-specific fertility rate measures the annual number of births to women of a specified age or age group per 1,000 women in that age group. An age-specific fertility rate is computed as a ratio. The numerator is the number of live births to women in a particular age group during a period of time, and the denominator an estimate of the number of person-years lived by women in that same age group during the same period of time. It is expressed as births per 1,000 women. The following seven five-year age groups by age of mother at time of birth are presented in the data base: 15 to 19; 20 to 24; 25 to 29; 30 to 34; 35 to 39; 40 to 44; and 45 to 49.
F.Replacement Fertility Rate (RFR) : Replacement level fertility is the level of fertility at which a population exactly replaces itself from one generation to the next. In developed countries, replacement level fertility can be taken as an average of 2.1 children per woman. In countries with high infant and child mortality rates, however, the average number of births may need to be much higher. When a country reaches replacement level fertility, other conditions must be met for zero population growth to also be attained. Replacement level fertility will lead to zero population growth only if mortality rates remain constant and migration has no effect.
G.Life expectancy at birth : Life expectancy at birth indicates the number of years a newborn infant would live if prevailing patterns of mortality at the time of its birth were to stay the same throughout its life.
H.Working Age Population (WAP) : It is the number of people in a population aged 15 to 64 years. These are supposed to be economically active people, who will sustain the growth of the country.
I.Dependant Population (DP) : It is the number of people in a population below 15 years and above 64 years. These are supposed to be economically inactive people, who will be sustained by the Working Age Population (WAP).
J.Dependency Ratio (DR) : The dependency ratio is a measure of the number of dependents aged zero to 14 and over the age of 65, compared with the total population aged 15 to 64. It shows the number of people of nonworking age, compared with the number of those of working age (15 to 64). As the overall age of the population rises, the ratio can be shifted to reflect the increased needs associated with an aging population. Formula for DR = Number of dependents (below 15 and above 64) / Working Age Population x 100
K.Demographic Dividend : When Working Age Population (WAP) exceeds the Dependent Population (DP), a nation enters the phase of demographic dividend. Thus, WAP > DP. It can enjoy rapid economic growth in this phase. India's demographic dividend started 2018 and will last till 2055 (total 37 years). This stage arrives when Total Fertility Rates (TFR) decrease substantially.
L.Labour Force Participation Rate (LFPR) : Labour force participation rate is the section of working population (age group of 16-64 years) currently employed or seeking employment. People who are still undergoing studies, housewives and persons above the age of 64 are not reckoned in the labour force.
This is an important metric when the economy is not growing or is in the phase of recession. During a recession, the labour force participation rate goes down, due to lower economic activity. When there are fewer jobs, people are discouraged to focus on employment which eventually leads to lower participation rate.
2.0 DEMOGRAPHIC TRANSITION - FIVE STAGES MODEL
Demography in any country broadly moves through five stages (Blacker, 1947). In the first stage, a country experiences high birth rates and death rates leading to stagnant population with low life expectancy. As the country’s morbidity burden falls, falling crude death rate (CDR) and high crude birth rate (CBR)1 mark the beginning of the second phase of demographic transition, characterised by a bulgingdependent population in the form of children in the age group of 0-14 years. Slowly, with improved education, fertility rates decline and a country experiences an expansion in the group of economically active adult population in the third stage. In the next stage, the average longevity of the population gradually rises and the population stabilises with the birth rate and death rate tending to equalise. Decline in population in response to death rates exceeding birth rates marks the final stage of demographic transition.
Malthus (1798) suggested that economic growth would fail to match up to the sustained rapid increase in world population, leading eventually to scarcity of resources and a doomsday scenario. However, as technological innovations enabled higher agricultural production and robust economic growth, there emerged a group of demographic optimists who advocated the idea that population growth could be an asset for an economy.
There are several channels through which demographic changes can impact macroeconomic outcomes. First, the age profile and the growth rate of the population directly impact the availability of labour – a key factor input in the production process. Second, Life-cycle hypothesis suggests that the age structure of the population operates through the saving-investment channel. People start as net borrowers during their youth, become net savers during working years, and eventually turn dis-savers after retirement. Thus, an increase in the working age population can increase the level of aggregate savings in an economy, expanding the availability of domestic financing for growth. Third, demographic changes can influence growth (and inflation) through the aggregate demand channel. The growth of a young population in the second stage and economically active population in the third stage of demographic transition leads to an increase in aggregate demand. Fourth, demographic factors have important implications for Government finances. Life cycle models predict that higher tax revenues and increased public saving help improve the fiscal position during the middle stages of demographic changes. A relatively faster ageing country will experience an improvement in its current account balance due to a decline in domestic investment demand that is greater than the reduction in national saving. Thus, in fifth stage, population aging may lead to international capital flows from countries with an aging population to countries with a relatively younger population such as newly industrialised and developing countries.
3.0 DEMOGRAPHIC TRANSITION IN INDIA
Throughout the world, there was a dramatic rise in population during the 20th century, where the population rose from 3 to 6 billion between years 1960 and 2000, and for India specifically, the population had increased to around 336 million by 1950. In India, there was a considerable delay between the occurrence of a sustained fall in the death rate and start of a major decline in birth rate. Between 1960 and 2000, global population grew at roughly 2% per annum which was an unsustainable rate in the long term because it translated that the global population would double every 35 years. India's population growth had peaked during the late 1970s at about 2.3% and currently, India's population is growing at a rate of 1.4% per year, a level that is still higher than China's 0.7%.
Census data from India (i.e. Registrar General of India) suggests that population growth is on the decline since 1991. The average number of children a woman expected was 3.8 in 1990, and this has fallen to 2.7 children per woman today. Even though the fertility and population growth rates are declining, India's population is projected to increase from 1.2 billion today to an estimated 1.6 billion by 2050 due to the population momentum and this figure is based on UN's medium-fertility scenario (Planning Commission, 2008). Population momentum refers to a situation where the large cohort of women of reproductive age will fuel population growth over the next generation, even if each woman has fewer children than previous generations did. Additionally, the drop in crude death (CDR) and birth rates (CBR) for the past four decades indicates that India is progressing towards a post-transitional phase. From 1950 to 1990, the drop in CBR was less steep than the drop in the CDR. However, during 1990s the decline in CBR has been steeper than the decline in CDR, which has resulted in an reduced annual population growth rate of 1.4%.
India's demographic transition is also visible through population pyramids which provide data on a nation's age structure. The pyramid helps portray the share of population in each age group, and in 1950, India had a very young population with many children between the ages of 0-15, while there were very few elderly people. This gave India a typical pyramidal shape where the large base of young children indicated an overall young population (Bloom, 2011). Moving forward in time to years 2030 and 2050, United Nations' projections show that with the declining CBR and population growth, the base of the population pyramid will shrink as the number of working-age individuals will increase relative to the children and the elderly. As of 2010, there are still a sizeable number of children in the age-group of 0-15 years, which is a result of the population momentum.
3.1 Age Structure
During the demographic transition, the changing age structure of a population has a large effect on economic growth, especially when the shift is due to baby booms and busts and their echo effects. Like other nations, India also experienced a delay between the occurrence of a sustained fall in the death rate and the start of a major decline in the birth rate. Due to this delay, India experienced a transitional period of rapid population growth and it is this period which is often the focus of economists and demographers.
With population growth, age structure of the nation is also transformed as a consequence of transition. At the beginning of a transition, there is baby boom that occurs which is not caused by an increase in births, but due to the sharply reduced rates of infant and child mortality. This baby boom has a higher survival rate because of an increased access to vaccinations, antibiotics, safe water and sanitation. Due to babies surviving, fertility subsequently decline when couples start to recognize that fewer babies are needed to reach their targets for ideal family size. Baby booms or growing number of children can have economical consequences because the presence of more children requires that there be adequate resources for food, medical care, housing, and schooling. Those resources must be diverted from other economically generating uses such as building factories, establishing infrastructure, and investing in research and development.
Babies and children between the ages of 0-14 are referred to as the dependency load because they consume more resources than they generate, in comparison to the working age individuals who have an input in the economy and little consumption. The diversion of resources to current consumption for the baby boom can temporality slow the process of economic growth. Babies born in such a boom will eventually reach working ages within a period of 15-25 years and when this happens, the productive capacity of the economy expands on a per capita basis and a demographic dividend may be within reach.
India's 37-year demographic dividend
(2018 - 2055)
- Since 2018, India’s working-age population (people between 15 and 64 years of age) has grown larger than the dependant population — children aged 14 or below as well as people above 65 years of age.
- This bulge in the working-age population is going to last till 2055, or 37 years from its beginning.
- Many Asian economies — Japan, China, South Korea — were able to use this ‘demographic dividend’, defined by the United Nations Population Fund (UNFPA) as the growth potential that results from shifts in a population’s age structure.
- This transition happens largely because of a decrease in the total fertility rate (TFR, which is the number of births per woman) after the increase in life expectancy gets stabilised.
- Japan was among the first major economies to experience rapid growth because of changing population structure. The country’s demographic-dividend phase lasted from 1964 to 2004. An analysis of the first 10 years showed how in five of these years, Japan grew in double digits; the growth rate was above 8% in two years, and a little less than 6% in one. Growth slid below 5% in only two of these 10 years.
- China entered this stage in 1994 — 16 years after Deng Xiaoping’s economic reforms started in December 1978. Although its growth accelerated immediately after the reforms, the years of demographic dividend helped sustain this rate for a very long period. In the 16 years between 1978 and 1994 (post-reform, pre-dividend) China saw eight years of double-digit growth. In the 18 years since 1994 there have been only two years when China could not cross the 8% growth mark.
- Change in population structure alone cannot push growth. A nation needs good health, quality education and decent employment.
- In the late 20th century, demographic dividend in Asia resulted in a seven-fold increase in the GDP of many countries. In Latin America the growth was only two-fold, the UNFPA (UN Population Fund) points out.
- India faces the huge challenge of ensuring good skilling, education, health and employment to the bulging working age population. Otherwise it risks losing any possible advantage it may have.
3.2 Demographic Dividend
Demographic Dividend is a phenomenon where the falling birth rate and the consequent shift in the age structure of the population towards the adult working ages and is also referred to as the demographic gift/bonus or the demographic window. The beneficial aspect of this population growth is that rise in the rate of economic growth due to a rising share of working age people in a population. There has been optimism surrounding the demographic dividend where researchers have pointed to East Asian countries where the rapid decline in fertility evolved the age structure in such a way that has been beneficial for economic growth.The "demographic transition"-the transition from a largely rural agrarian society with high fertility and mortality rates to a predominantly urban industrial society with low fertility and mortality rates. At an early stage of this transition, fertility rates fall, leading to fewer young mouths to feed. During this period, the labor force temporarily grows more rapidly than the population dependent on it, freeing up resources for investment in economic development and family welfare. Other things being equal, per capita income grows more rapidly too. This dividend period is quite long, lasting five decades or more, but eventually lower fertility reduces the growth rate of the labor force, while continuing improvements in old-age mortality speed growth of the elderly population. Now, other things being equal, per capita income grows more slowly and the first dividend turns negative.
The concept of demographic dividend has been applicable to India, where the three phases of the demographic transition have created three unique age structures. In the first phase, the fertility is very high and mortality begins to drop, which we know was the case in India during the 1960s and 70s (with growth rate at 2.3%). In the second phase, the fertility starts to decline at a fast pace leading to a reduction in the child population and one can see this trend occurring in India for the last four decades. However, due to the higher fertility of the past, India's population would continue to grow and will reach 1.6 billion by 2050 (population momentum). This period will include a large working age population and a lower dependency load. During the third phase, the dependency ratio will begin to rise as a result of higher old age population (60 & above), which also consumes resources in the form of health care, pension etc. The dividend is a term used to understand better the second phase of the age structure where the working age population will be higher than the growth of infant and child population growth, resulting in a reduced dependency ratio. By the year 2020, a large section of the population will reach prime years of working and saving.
3.3 Summary of India's demographic indicators
This data is for 2020, as per latest National Health Profile publication.
- India’s population, as per census 2011 was 121.085 crore (6232.7 lakhs males and 5875.8 lakhs females).
- Only in 1911-21, the Average Annual Exponential Growth Rate has been negative, due to great influenza epidemic and two successive bad harvests in West Bengal.
- The sex ratio of India during 1901 was 972 females per 1000 males. Since then, it has continued to decline decade over decade to 926 females against 1000 male in 1991 (except in 1981). The sex ratio has further improved from 1991 it was 933 and 943 female against 1000 female in 2001 and 2011 respectively.
- The highest sex ratio of 1084 females per 1000 males was reported by State of Kerala followed by Puducherry (1037/1000), Tamil Nadu (996/1000), Andhra Pradesh (993/1000), Chhattisgarh (991/1000) and Meghalaya (989/1000). The lowest sex ratio of 618 females per 1000 males was reported by the UT of Daman & Diu followed by Chandigarh (818/1000), NCT of Delhi (868/1000), Andaman & Nicobar Islands (876/1000), Haryana (879/1000), Jammu & Kashmir (889/1000), Sikkim (890/1000) and Punjab (895/1000).
- The highest population density of 11320 populations per square kilometre was reported by NCT of Delhi whereas Arunachal Pradesh has reported the lowest population density of 17.
- Approximately 27% of the total estimated population in 2016 was below the age of 14 years and majority (64.7%) of the population were in the age group of 15-59 years i.e. economically active population and 8.5% population were in the age group of 60 to 85+ years.
- The estimated Birth Rate, Death Rate and Natural Growth Rate in India - There has been consistent decrease in the Birth Rate, Death Rate and Natural Growth Rate in India since 1991 to 2017.
- As on 2017 India has registered Birth Rate of 20.2 per 1000 populations and Death Rate of 6.3 per 1000 populations while the Natural Growth Rate was 13.9 per 1000 population in India.
- The Birth Rate in Rural was higher than in the Urban. Similarly, the Death Rate and Natural Growth Rate were also higher in rural as compared to the Urban.
- The population continues to grow, as the decline in the birth rate is not as rapid as the decline in the death rate. So, despite a rapid fall in total fertility rates across regions and communities, population continues to grow due to fall in death rates (people are living longer now).
- The Life Expectancy at Birth has increased from 49.7 years in 1970-75 to 68.7 years in 2012-16. For the same period, the Life Expectancy for Females is 70.2 years and 67.4 years for Males.
- Infant Mortality Rate has declined considerably (33 i.e. Per 1000 Live Births in 2016), but differentials of rural (37) & urban (23) are still high.
- The Maternal Mortality Ratio is highest in Assam & lowest in Kerala.
- The Age-specific death rate is declining over the years; the rural-urban differentials are still high.
- The Total Fertility Rate (TFR) for the country was 2.3 whereas in rural areas it has been 2.5 and it has been 1.8 in urban areas during 2016 as per the latest available information. It has continued to decline rapidly till date, with many states falling below the replacement rate of 2.1 already.
4.0 INDIA IN WORLD POPULATION
The estimated global population in 2010 was 6908.72 million. Population of the top 10 countries have all grown over the last decade, except in Russian Federation, which has declined. At present, these ten countries account for nearly three-fifth of the world population. The three most populous ones, namely, China, India and USA, together account for four of every ten persons of the world. At present, a little more than one out of every six persons in the world is from India.
The gap between China and India, the countries with the largest and second largest population in the world has narrowed from 238 million in 2001 to nearly 131 million in 2011. On the other hand, the gap between India and the United States of America, which has the third largest population, has now widened to about 902 million from 741 million in 2001.
In 1950, China with a 22 percent share of the world population was the world's most populous country, followed by India, which had a share of 14.2 percent. The population of India in 2011 was almost equal to the combined population of USA, Indonesia, Brazil, Pakistan, Bangladesh and Japan put together - the population of these six countries totals 1214.3 million!
While India accounts for a meagre 2.4 percent of the world surface area of 135.79 million square kms, it supports and sustains a whopping 17.5 percent of the world population. In contrast, the USA accounts for 7.2 percent of the surface area with only 4.5 percent of the world population. As such, among the ten most populous countries of the world, only Bangladesh has a higher population density compared to India.
The world population grew at an annual rate of 1.23 percent during 2000-2010 as estimated by the United Nations. China registered a much lower annual growth rate of population (0.53 percent) during 2000-2010, as compared to India (1.64 percent during 2001-2011). In fact, the growth rate of China is now third lowest among the ten most populous countries, behind Russian Federation and Japan and it is substantially lower than the USA (0.7 percent). With a definite slowing down of population growth in China, it is now estimated that by 2030, India will most likely overtake China to become the most populous country on the earth with 17.9 percent population living here.
Transformation of the world population took place in the 20th century as technological and social changes brought steep declines in birth rates and death rates around the world. The century began with 1.6 billion people and ended with 6.1 billion, mainly because of unprecedented growth after 1960. The momentum created by this population growth has carried the world population past 7 billion in October 2011. It is almost certain that nearly all future population growth will occur in the developing regions of the world. Urban areas in these regions will absorb most of the additional people.
In the developing countries, a "youth bulge" ensures that the absolute number of births will rise even as couples are having fewer children. At the other extreme, most countries in Europe now have a "youth dearth" after decades of low fertility. Stagnant growth or even population decline is challenging more countries as fewer workers must support expanding pension and social security systems for their aging citizens. Governments have crafted a range of population policies to address these and other issues over the last half-century.
5.0 POPULATION GROWTH: INDIA 1901 TO 2011
The population of India, at the turn of the twentieth century, was only around 238.4 million. This increased by more than five times in a period of one hundred and ten years to reach 1210 million in 2011. Interestingly, the population of India grew by one and half times in the first half of the twentieth century, while in the later half it recorded a phenomenal three-fold increase. Some other indicators of growth rate such as decadal growth rate, change in decadal growth, average annual exponential growth rate and progressive growth rate over 1901 during each decade have also been presented.
One of the important features of the present decade is that, 2001-2011 is the first decade (with the exception of 1911-1921) which has actually added lesser population compared to the previous decade. This implies that as a result of the combination of population momentum and somewhat impeded fertility, although India continues to grow in size, its pace of net addition is on the decrease.
In absolute terms, the population of India has increased by about 181 million during the decade 2001-2011. Although, the net addition in population during each decade has increased consistently, the changes in net addition has shown a steady declining trend over the decades starting from 1961. While 27.9 million more people were added between the decade 1981-1991 than between 1971-1981, this number declined to 19.2 million for the decades between 1981-1991 and 1991-2001. The provisional results of 2011 shows that between 2001 and 2011, the net addition is less than that of the previous decade by 0.86 million.
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