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Will India Grow Old Before it Gets Rich?
India's population has aged faster than expected while its economic growth has slowed over the last decade. This raises the obvious questions: Will India get old before it gets rich? Is India getting poorer relative to its peers in the emerging markets?
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| India's Population Aging. Source: Semafor |
As India's birth rate declines rapidly, the proportion of people age 60 and over is rising in the general population. This is particularly true of the southern states like Kerala and Tamil Nadu. Meanwhile, the expected demographic dividend from the youth bulge in the country has yet to materialize. High youth unemployment is threatening to cause serious social instability in the world's most populous country. It is also causing a massive brain drain.
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| India's GDP Per Capita Compared to Emerging Markets Average. Source: IMF |
India is losing its best and brightest to the West, particularly to the United States, at an increasingly rapid pace. A 2023 study of the 1,000 top scorers in the 2010 entrance exams to the Indian Institutes of Technology (IIT) — a network of prestigious institutions of higher learning based in 23 Indian cities — revealed the scale of the problem. Around 36% migrated abroad, and of the top 100 scorers, 62% left the country, according to a report in the science journal Nature. Nearly two-thirds of those leaving India are highly educated, having received academic or vocational training. This is the highest for any country, according to the Organization for Economic Co-operation and Development.
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| Annual Population Growth Rapidly Falling Across India. Source: Semafor |
India has the lowest GDP per capita among the 5 BRICS nations. The country's GDP growth rate is much slower than the average for emerging markets. It means that India is becoming poorer relative to the rest of the developing world.
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| GDP Per Capita Map 2024. Source: IMF |
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| India's GDP Per Capita is Very Low. Source: BBC |
The north-side geographic divide in India is growing. The southern five of India’s 28 states (Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana) contain 20% of the population and contribute 31% of the GDP, according to The Economist magazine. Among startups, 46% of tech “unicorns” are southerners, particularly from Bangalore. The five southern states provide 66% of the it-services industry’s exports. The latest craze is for “global capability centers”, where multinationals assemble their global auditors, lawyers, designers, architects and other professionals: 79% of these hubs are in the south.
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| Indian Parliament Seats Based on Current Population. Source: National Herald |
There has always been a north-south divide in India in terms of population and wealth. The south has been wealthier and less populous than the north. But the political power is still concentrated in the poorer and more populous northern states. This situation serves Prime Minister Narendra Modi and his BJP party well. But it also creates significant resentment in southern states.
In his book "The Raisina Model", British Lord Meghand Desai says that India's breakup can not be ruled out. Specifically, he points to three issues that could lead to it:
1. Cow protection squads are killing Muslims and jeopardizing their livelihoods. The current agitation about beef eating and gau raksha is in the Hindi belt just an excuse for attacking Muslims blatantly. As most slaughterhouses in UP are Muslim-owned, owners and employees of these places are prime targets.
2. India has still not fashioned a narrative about its nationhood which can satisfy all. The two rival narratives—secular and Hindu nation—are both centered in the Hindi belt extending to Gujarat and Maharashtra at the most. This area comprises 51% of the total population and around 45% of the Muslims in India.
3. India has avoided equal treatment of unequal units. Representation in the Rajya Sabha (Upper House of Parliament) is proportional to population size. The larger states dominate both Houses of Parliament. It would be difficult for small states to object, much less initiate reform. In future, small states could unite to present their case for better treatment.
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Riaz Haq
India: Why a nation of 1.45 billion wants more children
https://www.bbc.com/news/articles/ce9088men9xo
The key challenge, according to demographers, is India's rapid ageing driven by declining fertility rates. While countries like France and Sweden took 120 and 80 years respectively to double their aging population from 7% to 14%, India is expected to reach this milestone in just 28 years, says Mr Goli.
This accelerated ageing is tied to India's unique success in fertility decline. In most countries, improved living standards, education, and urbanisation naturally lower fertility as child survival improves.
But in India, fertility rates fell rapidly despite modest socio-economic progress, thanks to aggressive family welfare programmes that promoted small families through targets, incentives, and disincentives.
The unintended consequence? Take Andhra Pradesh, for instance. Its fertility rate is 1.5, on par with Sweden, but its per capita income is 28 times lower, says Mr Goli. With mounting debt and limited resources, can states like these support higher pensions or social security for a rapidly aging population?
Consider this. More than 40% of elderly Indians (60+ years) belong to the poorest wealth quintile - the bottom 20% of a population in terms of wealth distribution, according to United Nations Population Fund (UNFPA)'s latest India Ageing Report.
In other words, Mr Goli says, "India is getting old before getting rich".
Fewer children also mean a rising old-age dependency ratio, leaving fewer caregivers for an expanding elderly demographic. Demographers warn that India's healthcare, community centres and old-age homes are unprepared for this shift.
Dec 18, 2024
Riaz Haq
IIM graduate startup CEO says 2,000 richest families own 18% of India’s wealth: ‘This is insane’ | Trending - Hindustan Times
https://www.hindustantimes.com/trending/iim-graduate-startup-ceo-sa...
The founder and CEO of Bombay Shaving Company reflected on India’s wealth inequality in a LinkedIn post, calling the gap between the rich and poor “insane.” In his critique of modern work culture, Shantanu Deshpande said economic inequality forces people into jobs they dislike. He said that the majority of Indians work not for job satisfaction but for survival.
Deshpande also claimed that 2,000 families own 18% of India’s wealth while paying only 1.8% of taxes. He said that these families are guilty of promoting the idea that hard work will lead to success because it serves their end goal. HT.com could not independently verify this data.
“Most people don't like their jobs”
“One of the tragic and late realizations I've had is - most people don't like their jobs,” the CEO of Bombay Shaving Company wrote in his LinkedIn post.
“If everyone in India was given sustenance money and financial security their current jobs give them, 99% won't show up to work the next day.”
Deshpande theorised that this dislike for work permeates class and sectors - whether it is gig workers or government employees or professionals in “fun and employee friendly startups” like his very own, most people would quit if they did not have to earn a living.
“Work is a majboori to provide for spouse, children, elderly parents, dependent siblings,” he wrote.
Questioning the inequity
Shantanu Deshpande further said that for centuries, it has been considered normal to tear people away from their families from morning to night, ostensibly to provide for these very families.
More and more, however, he has found himself questioning the logic of such a work culture.
“To usurp someone away from their homes and families all day from morning to night, sometimes for days and weeks, with a hanging carrot of a paycheck - we just assume it's alright to do that cos that's what's been happening for 250+ years.
“That's how nations have been built. So we do it. But increasingly I've found myself questioning the inequity of this,” the founder and CEO wrote on LinkedIn.
Deshpande highlighted the wealth disparity that exists within India.
On the question of wealth inequality, he provided some “insane” statistics. Deshpande said that 18% of national wealth is concentrated among the country’s 2,000 richest families.
He admitted that he was not too sure about the accuracy of the numbers but said that these families definitely don’t pay even 1.8% of taxes.
“2000 families in India own 18% of our national wealth. That's just INSANE. Not sure of the numbers but they definitely do not pay even 1.8% of the taxes,” the IIM graduate founder reflected.
“These families and other 'equity builders' like me (v v miniscule version haha) are guilty of peddling a 'work hard and climb up' narrative because it's self serving of course, but also what other option is there? We don't know any other way,” he added.
Jan 5
Riaz Haq
World of Statistics
@stats_feed
Poverty rate of South Asian countries
At $2.15/day for extreme poverty:
🇦🇫 Afghanistan: 54.5%
🇧🇩 Bangladesh: 5.01%
🇧🇹 Bhutan: 0%
🇨🇳 China: 0%
🇮🇳 India: 12.92%
🇲🇲 Myanmar: 1.99%
🇳🇵 Nepal: 0.37%
🇵🇰 Pakistan: 4.93%
🇱🇰 Sri Lanka: 0.96%
At $3.65/day for lower middle income:
🇦🇫 Afghanistan: -
🇧🇩 Bangladesh: 30.03%
🇧🇹 Bhutan: 0.47%
🇨🇳 China: 0.05%
🇮🇳 India: 44.05%
🇲🇲 Myanmar: 19.65%
🇳🇵 Nepal: 7.5%
🇵🇰 Pakistan: 39.84%
🇱🇰 Sri Lanka: 11.3%
At $6.85/day for upper middle income:
🇦🇫 Afghanistan: 99.9%
🇧🇩 Bangladesh: 74.1%
🇧🇹 Bhutan: 8.45%
🇨🇳 China: 17.03%
🇮🇳 India: 81.76%
🇲🇲 Myanmar: 68.2%
🇳🇵 Nepal: 44.07%
🇵🇰 Pakistan: 84.53%
🇱🇰 Sri Lanka: 49.35%
Source: World Bank
https://x.com/stats_feed/status/1876275565683978395
https://blogs.worldbank.org/en/opendata/a-higher-standard-of-povert...
Jan 7