Economy

Faltering steps of toddlers

Harish Damodharan K. R. Srivats | Updated on February 09, 2011 Published on February 08, 2011

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For first time, Census might show dip in 0-4 population

The demographic implication of this famous line from William Wordsworth's The Rainbow is that tomorrow's population size is a function of the number of children living today.

The 2001 Census estimated India's toddler population — those in the 0-4-year age group — at about 110 million. Between 1991 and 2001, this population rose by just over seven million against the 17-million increase registered during the preceding decade.

The 2011 Census is likely to reveal — for the first time — a decline in the country's toddler numbers, mirroring a general drop in fertility rates. Indications of it are there in the United Nations' latest ‘World Population Prospects', which projects a 1.4 million reduction in India's population below four years between 2000 and 2010, and even sharper falls thereafter (Chart).

The toddler de-growth phenomenon is, in fact, not new at an individual State level. Kerala and Tamil Nadu reported it even in the 1991 Census. The subsequent Census saw Andhra Pradesh, Karnataka, Punjab, Himachal Pradesh, West Bengal, Orissa and Tripura, too, recording absolute dips in their 0-4 age cohort populations during 1991-2001. The 2011 Census may show more States — Gujarat, Maharashtra and Haryana, among others — joining the league, resulting in an overall national-level decline.

Given that the children born in the last four years will form the mainstay of the parental base a couple of decades from now, their diminishing numbers hold great significance for population stabilisation. India's population is reckoned to stabilise at around 1650 million by 2060, when the fertility rate (the average number of children a woman expects to deliver in her lifetime) would have settled below 1.9, from the existing 2.6 and 3.8 in 1990.

Linked to this is a second virtuous phenomenon — that of declining dependency ratios.

In 2001, for every 100 working adults in India – those in the 15-64 years' age group – there were some 59 children (below 14 years) and 8 elderly people (above 65 years) to be supported, adding up a dependency ratio of 67 per cent.

With toddler numbers coming down and exerting downward pressure on succeeding age cohorts as well, the ratio of dependents to the working age population is expected to fall to 56 per cent in 2010 and to below 50 per cent by 2020 — where it will remain for the next three decades (Table).

A dependency ratio of less than half offers huge potential for economic growth: Not only are there more breadwinners here, but the fact that their earnings support relatively fewer people translates into higher disposal incomes as well as savings. Countries experiencing high-growth phases – Japan through the seventies and eighties or China since the nineties — have all benefited from sub-50 per cent dependency ratios.

Many economists believe that it is India's turn next to reap the so-called demographic dividend, more so after 2030. By then, China would start facing problems of an ageing population pushing up the dependency ratio again – something that the US, Japan and much of Europe are already beginning to encounter now. This renewed increase, owing to an explosion in the elderly rather than children's population, will take place in India only well after 2050.

While declining dependency ratios present an economic opportunity, they also pose a potential threat in the form of angry young people not finding jobs or having the right skills to get one. In the event, ‘demographic dividend' may yield more of Egypt and Tunisia and less of China or pre-1990s Japan.

Published on February 08, 2011
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