April 15, 2023

Early this year, India’s rising population, currently around 1.4 billion, is estimated to have overtaken that of China.

While China’s population is stagnant and rapidly aging, more than half of Indians, 52%, are below the age of 30. Officials, the media, and policy and business analysts in India, and some in the West, forecast that rising incomes of the large, growing young population will be a “demographic dividend” that will boost the nation’s economy. India is hence coveted as huge potential market for everything from consumer goods to social media platforms, say analysts.

While India and China have roughly the same population, the Chinese market is far bigger. India’s per capital income is only about a fifth of that of China – India’s Gross Domestic Product is around $3 trillion while that of China is six times larger at $18 trillion. 

Yet, over the coming decades, for Western, Japanese, and South Korean companies, India offers the only market to pursue sizeable revenue and profit growth since they are shut off from China. So, the companies strategize that, even if the overall income levels are low in India, serving just the top 10% of young income earners offers a sizeable market of 70 million consumers. Not surprising then that Facebook, Google, Disney, Fox, Twitter, and other global companies are eagerly expanding in India,  

However, India’s rising population brings with it major economic, social, and political risks. A quarter of the youth in India are unemployed, according to estimates from private surveys – the figure is higher for those with college degrees. Only a quarter of the women in India are in the workforce. A large portion of the women who do not work are in effect unemployed since they cannot find a job.

Several.studies have shown that poor families have more children since the parents view them as an economic asset. For instance, if a woman has four children, and one of them passes away in early childhood, the family still has three children who can work and bring in income.

The other major factor contributing to the rise in India’s population is the preference for male children. In many cases, a family expects a woman to keep having babies till she has one or two boys.

Based on current birth rates, India’s population is expected to rise to more than 1.6 billion by 2060. A third of the increase is expected to come from Bihar and Uttar Pradesh (U.P.). Women in Bihar, the poorest state in India, typically have more than three children.

U.P. is another northern state with a high level of poverty, especially in the eastern region. It is the most populated state and accounts for 80 of the 543 seats in parliament. The outcome in U.P. is key to winning national elections. In the 2019 elections, the Bharatiya Janata Party, which rules India with Narendra Modi as Prime Minister, won 62 seats in U.P.  

Unemployment in both U.P. and Bihar are far higher than the national average. Creating more jobs, especially for the rural poor, is crucial to reducing birth rates in India. While Modi won the past two national elections promising to create jobs, the government stopped releasing unemployment figures in 2018 apparently since the data showed a multi-decade high in the level of unemployment.

The rising population in India, a report in The Guardian notes, “will place huge pressure on India’s resources, economic stability and society, and the repercussions will reach far beyond its borders…diminishing resources such as water could become decisive factors in what India’s future population looks like.”

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