India to Become Largest Populated Country | 23 Dec 2022

Why in News?

It is estimated that around April 2023, India’s 1.43 billion people will exceed China’s population.

• In 2022, China will for the first time register an absolute decline in its population.

What are the Drivers of these Shifts?

• Mortality and Fertility:
  • Crude Death Rate (CDR): The CDR — the number of persons dying per year per 1,000 population — was 23.2 for China and 22.2 for India in 1950.
    • It fell to single digits for China first in 1974 (to 9.5) and for India in 1994 (9.8), and further to 7.3-7.4 for both in 2020.
  • Life Expectancy at Birth: Another mortality indicator is life expectancy at birth. Between 1950 and 2020, it went up from 43.7 to 78.1 years for China and from 41.7 to 70.1 years for India.
  • Total Fertility Rate: The total fertility rate (TFR) — the number of babies an average woman bears over her lifetime — was as high as 5.8 for China and 5.7 for India in 1950.
    • India's TFR fell to 2 in 2019-2021, from 3.4 in 1992-93.
• Sustained Lows in TFR:
  • Populations can keep growing even with TFRs falling. De-growth requires TFRs to remain below replacement levels for extended periods.
  • The effects of that — fewer children today becoming parents tomorrow and procreating just as much or less — may reflect only after a couple of generations.
  • China’s TFR dipped below replacement first in 1991, which was almost 30 years before India’s.

What are the Challenges and Opportunities?

• Challenges:
  • Having the most people on the planet could prove to be a big negative for India unless it can provide food, education, housing, health services and jobs to its people.
  • The scale of this challenge is ­gigantic.
  • Across India, water scarcity is a chronic issue. All these needs are crucial but by far the single most important thing for India to do is to generate jobs. The scale of this ­particular challenge is truly daunting.
    • In 2020, India has 900 ­million people (67% of the total population) in the working age group of 15-64.
    • This is expected to expand by another 100 million by 2030.
• Opportunity:
  • Claim for permanent member at UNSC: If India becomes the largest country, it will give Indians a claim to be the permanent member of the Security Council.
    • New population will push its existing demand for a permanent seat on the UN Security Council.
    • The geopolitical reality has changed and new powers have emerged which deserve a place alongside the old – Russia, the UK, China, France and the United States.
  • Increase in Fiscal Space: Fiscal resources can be diverted from spending on children to investing in modern physical and human infrastructure that will increase economic sustainability of India.
  • Rise in Workforce: With more than 65% of the working age population, India can rise as an economic superpower, supplying more than half of Asia’s potential workforce over the coming decades.
    • Increase in the Labour Force that enhances the productivity of the economy.
    • Rise in Women’s Workforce that naturally accompanies a decline in fertility, and which can be a new source of growth.

What should be the Strategy of India?

• Mass Prosperity Strategy:
  • India’s large remittances from a small population overseas reinforce that our mass prosperity strategy should be human capital and formal jobs.
  • 0.8 % of software employment workers generate 8 % of GDP.
  • This case is reinforced by remittances from the overseas population of less than 2 % of our resident population crossing USD 100 billion last year.
• Qualitative Shift in Employement:
  • The qualitative shift during the previous five years from low-skilled, informal employment in Gulf countries to high-skilled formal jobs in high-income countries is significant.
    • In 2021, the US replaced the UAE as the single biggest source country with 23 % of remittances. Our rich forex remittance harvest — roughly 25 % higher than FDI and 25 % less than software exports — is fruit from the tree of human capital and formal jobs.
• Additional Jobs:
  • To absorb the influx of young people into the workplace, India would need to create close to 12 million additional, non-farm jobs every year, starting in 2023.
  • This was triple the four million non-farm jobs created annually between 2012 and 2018.
  • India would need a growth rate of 10% per annum to be able to invest in industry so that this army of young people can be absorbed.
• Investments in Education:
  • While India is expected to have a demographic dividend from this large workforce, reaping its potential benefits requires significant investments in education.

Source: IE