Context

Recent results from National Family Health Survey-5 (NFHS-5) suggest that we are entering an era where we will have to tackle these challenges.

A milestone in India’s demographic history: TFR at 2.0

• NFHS-5 places the total fertility rate (TFR) at 2.0.
• With two parents having two children, we have reached a replacement level of fertility.
• Due to many young people, the population will continue to grow, but the replacement level fertility is a significant milestone in India’s demographic history.
• This decline is spread evenly across the country, with 29 states and UTs having a TFR of 1.9 or less, with seven below 1.6.
• All southern states have a TFR of 1.7-1.8, similar to that of Sweden.
• Even states that have not reached replacement fertility — Bihar and Uttar Pradesh — seem to be headed in that direction.
• Part of the original coterie of lagging states, Madhya Pradesh and Rajasthan both have achieved TFRs of 2.0.

Challenge: Supporting the ageing population

• Supporting ageing population: As fertility declines, the proportion of the older population grows, and societies face the challenge of supporting an ageing population with a shrinking workforce.
• This challenge is greater for leaders at the beginning of the demographic transition — Kerala and Tamil Nadu.
•  Interestingly, these are also among the more prosperous states in India, whose economic activities increasingly rely on migrant labour from other states.
• Many industries such as auto parts manufacturing and construction in southern states rely on semi-skilled migrants, often transported under contractual arrangements, from northern and eastern states, particularly Bihar, Uttar Pradesh and Odisha.

Rethinking the critical dimension of Indian federalism

• Dependence on migrat workforce: Many industries such as auto parts manufacturing and construction in southern states rely on semi-skilled migrants, often transported under contractual arrangements, from northern and eastern states, particularly Bihar, Uttar Pradesh and Odisha.
• Allocation of political power: While the Indian constitution mandates allocation of Lok Sabha seats across states in proportion to their population via the Delimitation Commission, the Emergency-era 42nd amendment froze seat allocation to the population share of states in the 1971 Census.
• Equity consideration in central allocation to states: The division of central allocation to states is another area where population concerns have dominated equity considerations.
• Much of the Centre-state revenue sharing occurs through recommendations of various Finance Commissions.
• The sixth to fourteenth Finance Commissions allocated resources between states using the 1971 population shares of various states.
• The Fifteenth Finance commission used Census data from 2011, but it also added the criteria of demographic performance, rewarding states with lower TFR.

Type of demographic policy India needs to pursue

• Pursue policy followed by China? Does India want to pursue China’s route of sharply lower fertility, with a large number of families stopping at one child, or are we content with moderately below replacement fertility of about 1.7-1.8?
• If the latter, we are well-positioned to head in this direction.
• Issues faced by China: while very low fertility provides a temporary demographic dividend with a reduced number of dependents to workers, the increased burden of caring for the elderly may become overwhelming over the long term.
• Advantage of Regional demographic variation in India: India is fortunate that its demographic dividend may be smaller, but is likely to last for a more extended period due to regional variation in the onset of the fertility decline.
• As southern states struggle with the growing burden of supporting the elderly, northern states will supply the workforce needed for economic growth.
• Economic expansion: The increasing pace of migration may help shore up economic expansion in the south with its shrinking workforce augmented by workers from other states.

Consider the question “Examine the influence of regional demographic variation on the fedaralism in India? How such variation can help India?”

Conclusion

The Sixteenth Finance Commission and the next Delimitation Commission must be freed from the burden of managing the demographic transition, focused on carrying out their tasks in the best interests of Indian federalism.

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