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Fertility rates fall further – the dividend is here and now. A continuing fall in
India’s birth rate raises the possibility that India’s population may stabilize as early as
2020-22. Birth rates remain high in northern states but have fallen below the
‘replacement rate’ in southern states. This also points to the fact that the demographic
dividend has already been born. Many public policy reforms will be required—
education, health and employment reforms are required right away.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
Fertility rates have fallen – again
India’s fertility rate has fallen again as reported in the Sample Registration System (SRS)
statistical report 2013 (see Exhibit 1). Of relevance is the total fertility rate (TFR), which at 2.1,
is considered to be at ‘replacement rate’. If the TFR is equal to 2.1, the population will remain
stable over time, if TFR is greater or less than 2.1, the population will expand or shrink,
respectively. As Exhibit 1 shows, urban India TFR was around 1.8 in 2013 and rural India’s TFR
has fallen from 2.7 to 2.5 over the past three years.
A lower number of children all around
We had highlighted that data from Census 2011 pointed out that the number of children born
in the decade ending February 2011 was the same as those born in the earlier decade (~240
mn). On a higher base, hence, a lower number of children were born in the last decade. We
expect that the next set of Census figures, from 2021 will find that a progressively lower
number of children will be born in India. What this data point seems to suggest is that the
fertility rate is falling so rapidly that there is a possibility that further cohorts will be significantly
smaller.
The Ganga belt remains the most fertile
As we had noted in the note, Revitalizing the Ganga, the states in North India have among the
highest fertilities in India (see Exhibit 2). We find it interesting that the survey finds West Bengal
to have one of the lowest birth rates, meaningfully lower than the replacement rates. As with
every sample survey, we would treat the data with some caution. However, experts believe that
if this fall in fertilities sustains, India’s population may peak as early as in 2020-22.
Public policy implications of the demographic dividend having been born
A demographic dividend by definition is a cohort of young people, greater in number than the
cohort that follows them. It is hence clear that the demographic dividend of India has already
been born. This has significant implications on various aspects of public policy: (1) incrementally,
the focus has to move from primary education to secondary, tertiary and vocational education,
(2) India’s population growth will now come more from increase in life expectancy than from
children being born – and this will necessitate meaningful change in health expenditure and
(3) job creation for the demographic dividend will be critical over the next two decades – this
will require connecting the children born in the 1990s and 2000s to relevant skills and
eventually, job opportunities.
An interesting political point to consider
India’s Constitution has been amended such that the number of members of Parliament (MPs)
that each state sends will remain fixed until the Census after 2026. This means that practically
until the early to mid-2030s, the number of MPs from each state will remain the same.
Constituencies in Uttar Pradesh had, on average, 1.7 mn electors in the 2014 elections; Kerala
had 1.1 mn electors. Over the next 20 years, this divergence will only increase, thereby
changing the spirit and meaning of ‘one person one vote’.
LINK
http://www.kotaksecurities.com/pdf/indiadaily/indiadaily12012015az.pdf
Fertility rates fall further – the dividend is here and now. A continuing fall in
India’s birth rate raises the possibility that India’s population may stabilize as early as
2020-22. Birth rates remain high in northern states but have fallen below the
‘replacement rate’ in southern states. This also points to the fact that the demographic
dividend has already been born. Many public policy reforms will be required—
education, health and employment reforms are required right away.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
Fertility rates have fallen – again
India’s fertility rate has fallen again as reported in the Sample Registration System (SRS)
statistical report 2013 (see Exhibit 1). Of relevance is the total fertility rate (TFR), which at 2.1,
is considered to be at ‘replacement rate’. If the TFR is equal to 2.1, the population will remain
stable over time, if TFR is greater or less than 2.1, the population will expand or shrink,
respectively. As Exhibit 1 shows, urban India TFR was around 1.8 in 2013 and rural India’s TFR
has fallen from 2.7 to 2.5 over the past three years.
A lower number of children all around
We had highlighted that data from Census 2011 pointed out that the number of children born
in the decade ending February 2011 was the same as those born in the earlier decade (~240
mn). On a higher base, hence, a lower number of children were born in the last decade. We
expect that the next set of Census figures, from 2021 will find that a progressively lower
number of children will be born in India. What this data point seems to suggest is that the
fertility rate is falling so rapidly that there is a possibility that further cohorts will be significantly
smaller.
The Ganga belt remains the most fertile
As we had noted in the note, Revitalizing the Ganga, the states in North India have among the
highest fertilities in India (see Exhibit 2). We find it interesting that the survey finds West Bengal
to have one of the lowest birth rates, meaningfully lower than the replacement rates. As with
every sample survey, we would treat the data with some caution. However, experts believe that
if this fall in fertilities sustains, India’s population may peak as early as in 2020-22.
Public policy implications of the demographic dividend having been born
A demographic dividend by definition is a cohort of young people, greater in number than the
cohort that follows them. It is hence clear that the demographic dividend of India has already
been born. This has significant implications on various aspects of public policy: (1) incrementally,
the focus has to move from primary education to secondary, tertiary and vocational education,
(2) India’s population growth will now come more from increase in life expectancy than from
children being born – and this will necessitate meaningful change in health expenditure and
(3) job creation for the demographic dividend will be critical over the next two decades – this
will require connecting the children born in the 1990s and 2000s to relevant skills and
eventually, job opportunities.
An interesting political point to consider
India’s Constitution has been amended such that the number of members of Parliament (MPs)
that each state sends will remain fixed until the Census after 2026. This means that practically
until the early to mid-2030s, the number of MPs from each state will remain the same.
Constituencies in Uttar Pradesh had, on average, 1.7 mn electors in the 2014 elections; Kerala
had 1.1 mn electors. Over the next 20 years, this divergence will only increase, thereby
changing the spirit and meaning of ‘one person one vote’.
LINK
http://www.kotaksecurities.com/pdf/indiadaily/indiadaily12012015az.pdf
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