‘Greying India Must Delay Retirement’

jatin
By jatin July 5, 2019 12:13

India may have to raise the retirement age as the country sees a rapid increase in the size of the elderly population over the next two decades due to the slowing down of the population growth rate, according to the Economic Survey 2018-19.

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  • It is forecast that the population rate will grow less than 1% from 2021 to 2031 and under 0.5% from 2031 to 2041.
    • This is primarily due to the fall in the total fertility rate (TFR), which is projected to decline between 2021-2041 and fall below replacement level fertility at 1.8 as early as 2021.
    • The total fertility rate of 2.1 is called the replacement level fertility below which populations begin to decline.
    • For India, the effective replacement level fertility is slightly higher than the normal benchmark due to the skewed gender ratio and is at 2.15-2.2.
    • The current TFR in 14 out of the 22 major States is already below the effective replacement level fertility.
    • At the State level, southern States as well as West Bengal, Punjab, Maharashtra, and Himachal Pradesh have below replacement level fertility and will see TFR decline to 1.5-1.6 by 2021. And by 2031, all States are likely to see below replacement level fertility.
  • The size of the elderly population, 60 years and above, is expected to nearly double from 8.6% in 2011 to 16% by 2041, whereas the population size of those between 0-19 years, which is on the decline, is likely to drop from as high as 41% in 2011 to 25% by 2041.
  • This will throw new policy challenges such as provision for health and old-age care, access to retirement-related financial services, public pension funding, and retirement age, states the survey.
    • The world’s largest retailers and technology companies have been investing in growth markets of China and India owing to their large population base.
    • But India’s demographic dividend could soon shift, with a young population giving way to an aging one in what could be a cause of concern for how companies plan their offerings around such a consumer base.
  • The survey suggests Increasing the retirement age for both men and women. This will be key to the viability of pension systems and would also help increase female labor force participation in the older age-groups
    • Many countries such as the U.S., Germany, and France have already raised the retirement age to reduce the burden on pension funding.
  • Survey also said the number of children in the 5-14 age bracket will decline significantly, leading to the need for school mergers and less focus on building new ones.
    • Already states such as Himachal Pradesh, Uttarakhand, Andhra Pradesh, and Madhya Pradesh have fewer than 50 students enrolled in more than 40 percent of their elementary schools, according to the study, which was included in the government’s annual Economic Survey.

Also read: What Does It Mean For India To Become A $5-Trillion Economy?

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jatin
By jatin July 5, 2019 12:13