From population explosion to population decline

With fertility falling below the replacement level and states like Andhra Pradesh offering cash incentives for a third child, India is confronting a very different reality — how to manage an ageing society, a shrinking workforce and a shifting political balance before it becomes old without becoming rich

At Independence, India had only 360 million people, and the population was multiplying fast, with a total fertility rate (TFR) of about 6. Today, the population has swelled to 1.45 billion, but the average TFR is down to only 1.9, below the replacement level of 2.1. The TFR also shows wide regional variations: from 1.2 in Delhi and 1.3 in Tamil Nadu and West Bengal to 3.0 in Bihar, 2.9 in Meghalaya, 2.4 in UP, and 2.3 in Jharkhand, the only states with a TFR above the replacement level. In these states, too, fertility has been coming down, albeit slowly. With only 2.4 per cent of the world’s landmass, India accounts for 18 per cent of its population. Only a few years back, states like Assam and UP were contemplating punitive measures against families with more than two children, and many states still have a two-child policy in force, including Telangana, Gujarat, Maharashtra, Odisha and Uttarakhand. They penalise members of families with more than two children in some way, sometimes debarring them from contesting local elections and sometimes denying them government benefits or employment. Now the clock is turning full circle-in May 2026, in Andhra Pradesh, Chandrababu Naidu announced a payout of Rs 30,000 to couples who have a third child. Evidence from across the world suggests that such incentives barely work in encouraging couples to opt for more children.

According to most estimates, India’s population will peak around 2050 at about 1.6 billion and then fall as fast as it grew, to only 1 billion by the end of this century. Given our labour force participation rate of about 43 per cent and our median age of 29, it means our labour force will continue to grow for another 30 years or so, after which the demographic dividend will taper away. Thus, there may not be enough time for India to become a rich country unless growth remains steady at 8 per cent for the next three decades, a near impossibility. Just as China, South Korea and Japan are now trying to arrest their fast-declining populations, which are causing them anxiety, India is also getting worried that it will become old before it can become rich.

The worries are visible among the southern states, which have the lowest TFRs. Kerala has a little less than a fifth of its population covered under some form of pension against the national average of 12 per cent; it has now opened a “Department for Ageing”. It is already closing schools and importing workers from outside. Other states are also catching up. Demographic theories teach that low fertility starts only when a country reaches a per capita income of around $7,000 in purchasing power parity (PPP), and women become educated and join the labour force, when they have a decisive voice in the family and want to balance work with childbearing and child-rearing. India’s PPP per capita is almost double this threshold, and the falling fertility may reflect a surge in girls’ enrolment in school since the 1990s. But 90 per cent of Indian women get married and only 33 per cent work, yet the TFR has been falling. Gen Z clearly seems to prefer dogs over kids.

Parents today prefer quality over quantity-the proportion of children in fee-paying schools rose from 31.7 per cent in 2015 to 38.8 per cent in 2025, and even in poorer states like Bihar and UP, this trend is visible. Also, about 70 per cent of Indians live in nuclear families due to urbanisation and labour market demands, which disincentivise larger family sizes. Further, Indian parents’ obsession with a boy child also seems to be weakening, and many parents are now content with having only a girl. The Economist points out that parents’ thinking is also reinforced by culture, which in turn is shaped by changes in technology and access to information through the deep penetration of smartphones in rural India. The combined impact is that “having fewer children has become aspirational”. Contraction in population is now beyond any dispute; the only question is how to manage it.

The declining TFR is already causing social, economic and political strains. Southern states have always relied on labour from the northern and eastern states like Assam, UP, Odisha and Bihar, traditionally in hotels and restaurants. Now migrants are increasingly providing workers for factories, construction, caregiving, nursing, warehousing and logistics, food delivery, e-commerce, domestic work and security jobs. Southern states cannot possibly survive without migrants, but higher migration has the potential to create resentment among the local population; there are already complaints in some states about the influx of outsiders who cannot speak the local language, as seen in demands in Karnataka for greater use of Kannada in workplaces and on public signage. Rapid population growth in cities such as Bengaluru, Chennai, Hyderabad, Kochi and Coimbatore is also creating pressure on urban infrastructure, affecting the quality of public service delivery. Ten per cent of Kerala’s population are migrants, and there are growing demands for low-cost housing and primary healthcare, which has forced the Kerala government to launch a special health insurance scheme for migrants. Bengaluru has grown from about 6 million people in 2001 to around 15 million today, and the strain on urban infrastructure is visible in water scarcity, interminable traffic congestion, rising rents, and increased pressure on sewage and public transport systems. It is the same tale with other southern cities.

The strains are also visible in public finance: the last two Finance Commissions have used the 2011 population instead of the 1971 population as one of the parameters for determining the states’ share, and the southern states have been the losers, while the Hindi-belt states have gained on this account. This has caused significant resentment among the southern states, which feel they have been penalised for controlling their populations.

Now the impending exercise of delimitation has turned into one of the most politically sensitive issues, with the southern states suspecting that they would be penalised for implementing national family-planning goals, while the northern states argue that democracy requires equal representation. Both have valid logic: the current distribution of Lok Sabha seats is still largely based on the 1971 Census, even though India’s population has more than doubled since then. The five southern states, with about 20 per cent of the population today, account for 24 per cent of Lok Sabha seats while contributing more than a third of the country’s GDP and a disproportionately large share of its tax revenues.

A population-based delimitation would inevitably increase the representation of the faster-growing Hindi-speaking states while reducing the South’s share of seats, giving it a much-diminished voice and influence in central policymaking. To resolve this imbroglio, the BJP came up with a formula for a substantial expansion of the total number of Lok Sabha seats so that every state would gain seats and none would lose in absolute terms, but it could not be carried through for want of the requisite parliamentary support.

The task before the government now is to balance the need for equal representation with federal fairness through consensus, so that no state feels left out. The stakes are enormous, but India’s federal compact has weathered difficult tests before. There is no reason why a solution cannot be found through consensus again.

According to most estimates, India’s population will peak around 2050 at about 1.6 billion and then fall as fast as it grew, to only 1 billion by the end of this century. Given our labour force participation rate of about 43 per cent and our median age of 29, it means our labour force will continue to grow for another 30 years or so, after which the demographic dividend will taper away

The writer, a former Director General at the CAG of India, is currently a Visiting Professor at IIM Calcutta; Views presented are personal.