July 11 is observed as World Population Day. The theme for the current year is “Realising the hopes and aspirations of young people-today and for the future”. Does the world population reality and global demographic trends align and resonate with this theme, is a matter of utmost concern. There is a stark contrast between the aspirations about the productivity of global demography and the reality. Most advanced economies are today entangled in ageing crises, earmarked with shrinking workforce, reduced productivity, soaring burden on the state exchequer pertaining to healthcare, pension etc., which is ultimately derailing the growth prospects of the global economies.
Meanwhile, India’s population trends speak differently. It is full of aspirations, energy and a strong demographic dividend that is set to scale the country as the world’s third largest economy in the near future. Being the world’s most populous country, with 1.4 billion people, India has a strong labour force, its manufacturing sector is booming and most importantly Indians are also nourishing the global economy by forming the world’s largest and strongest diaspora network with globally renowned skilled workforce potential.
India’s demographic window driving its growth
India is not just the world’s most populous country, but is beaming with the world’s most youth population. It has a favourable age structure that drives the economic growth as more than 65 per cent of the population is aged between 15-64 years. The median age of the country is 28 years. Thus, the demographic dividend of India forms one of the world’s largest workforce. It leads to nourishing a world class demand-driven and manufacturing oriented market, that attracts and yields global investment.
This solid workforce in turn leads to increased propensity to consume with greater household consumption and more disposable income to save. This later helps to fabricate higher investment and capital formation, thus fueling India’s global growth story in the 21st century, as the world’s fourth largest economy that is set to scale as the world’s third largest economy in the near future. India’s humongous population is thus its strategic and economic advantage, indeed a human resource and not a burden.
India enjoys this demographic window till 2055. Thus, Prime Minister Narendra Modi has phrased the coming decades as Amrit Kaal, which also aligns with the centenary celebrations of Independence from British imperialism. The government has also articulated the Viksit Bharat goal for 2047, the year upto which India cherishes its demographic dividend. Thus, in this Amrit Kaal, India aims to reap maximum benefit of its demographic dividend that will glorify the country as a developed nation, with holistic growth.
In this direction, the government is accelerating a strong policy push in terms of skill development, employment, expanding the manufacturing sector with Make-in-India vision, strengthening the MSMEs, reforming the education sector with NEP and upgrading the defence & national security paradigm which are rooted in the principle of self-reliance or Atmanirbharata. With this comprehensive policy push, India is aiming to nourish its demographic dividend and seal the country as a prosperous ecosystem and epicentre for global growth.
Post 2050, the demographic window will shrink gradually. The ageing population will rise, workforce strength diminishes and Total Fertility Rate(TRF) falls, which has hitherto reached the replacement level. Thus, the next couple of decades is considered as pivotal and critical in India’s growth story. In this direction, the government is heralding overarching measures, to fully utilise the incredible strength of the youth populace.
Ageing population of advanced economies, falling fertility rate & an economic burden
While India is cherishing a favourable age structure, the global demographic trends don’t align with this. The global population is ageing rapidly and fertility rates are drastically falling. Especially in the advanced economies, the percentage of dependent population is spiking. This ageing crisis is leading to economic burden and growth stagnation.
For example, China faces one of the world’s most severe ageing crises, where its workforce is shrinking at a rapid scale and TFR remains at 0.98. Driven by its decades on one child policy and other authoritarian measures, the population which boomed the country as a global manufacturing hub, is now turning into a burden, with mounting pension shortfalls and healthcare burden. The labour intensive manufacturing sector of China will suffer a lot as an impact of the ageing crisis.
Despite the latest push by the communist government of China and incentives to bear more children, the Chinese are mentally unwilling to have kids. Thus, China’s ageing crisis has reached an irreversible peak. With reduced workforce and manufacturing crunch in China, as an impact of an aged population, the global supply chain can be disrupted. Here, India can position itself as a strong and credible manufacturing hub and consolidate its footprint in the global supply chain, by harnessing the full potential of its demographic dividend and youthful workforce. New Delhi is indeed marching in this direction, with greater policy importance given to the growth of the manufacturing sector.
Similarly, the US population is also ageing rapidly with a declining fertility rate. Currently, more than 18 per cent of the US population is aged 65 and above. Meanwhile, Japan has one of the oldest populations in the world. More than 29 per cent of its citizens are aged above 65. It has record low birth rates, however, life expectancy is rising, leading to a sheer burden on the economy. Despite technological superiority and sustainable, healthier lifestyle, Tokyo is unable to get rid of its ageing crisis and labour shortage.
South Korea, yet another advanced economy, is also grappling with one of the world’s fastest ageing crises. Analysts call South Korea as a “super-aged society”, with more than 20 per cent of the population aged above 65. South Korea also has record-low fertility with a 0.7 birth rate. Meanwhile, the European continent which once beamed as an economic superpower, technological epicentre and as the strong economy is currently trapped in a massive ageing crisis. In 2024, more than 21 per cent of Europe was aged above 65 and this figure is estimated to reach 30 per cent by 2050, thus causing a severe strain on the economy and growth momentum. The Western European countries such as Italy, Germany and also Portugal, Greece are suffering from a rapid rise of dependent population and decreased fertility rate. In France, just 24 per cent of the population is young.
As per, Organisation for Economic Cooperation and Development(OECD) report, the old-age dependency ratio or the number of people aged 65-plus, relative to those aged 15–64 has risen sharply across advanced economies in recent decades and is projected to continue to jump for the foreseeable future. OECD also raised concerns about the growing burden on GDP, as an impact of reduced workforce and increased dependent population.
The world population trends and demographic fundamentals are thus witnessing a structural transformation, with gravity shifting towards India and other economies of the Global South, that have the highest demographic dividend and human resource. In this direction, India as the world’s fourth largest economy & strong voice of Global South, is advocating the priorities and aspirations of these countries at global platforms, to harness demographic window, drive economic engine and champion world prosperity.
