The case for incentivising population growth
Andhra Pradesh’s move to incentivise population growth reflects that demographic challenges are regional and require localised responses
Are populous nations better off than those with a smaller population is a question that is not easy to answer. Generally speaking, a large population is difficult to manage and has its downsides, as it puts pressure on resources, the environment and governance. As more people compete for limited resources, conflict is inevitable. However, on the other hand, many nations are struggling with sluggish or negative population growth and are even inviting people from outside to settle. Even China, which we have replaced as the most populous nation, is reeling under the negative impacts of pursuing an aggressive population control regime. In India, we have charted a cautious course. While public campaigns like ‘Hum Do Hamare Do’ and many incentives for having small families have been offered, it has never been coerced, and the choice has by and large remained voluntary, except for a brief period during the Emergency in the 1970s when it was aggressively pursued by Indira Gandhi’s government. The result was resentment, and the government fell. However, now it appears that views on population growth have come full circle, and Andhra Pradesh is now actively promoting larger families.
The Andhra Pradesh government’s decision to incentivise larger families marks a sharp shift in India’s long-standing population policy. With the State’s Total Fertility Rate (TFR) falling to 1.5 — well below the replacement level of 2.1 — concerns are growing over an ageing population and a declining young workforce. Under the proposed “Pillale Sampada” initiative, families opting for a third and fourth child may receive financial incentives. The concern is not merely statistical. Falling fertility rates eventually reshape economies, labour markets and social structures. A shrinking young population means fewer workers, lower productivity, reduced tax revenues and increasing pressure on welfare systems. As elderly populations grow, governments face mounting healthcare and pension burdens without a sufficiently large workforce to sustain them. This is precisely the demographic trap confronting countries such as Japan, South Korea, Italy and Germany. Even China, once synonymous with strict population control through its one-child policy, is now struggling with rapid ageing and declining productivity.
However, what is right for Andhra Pradesh at the moment may not be suitable for the rest of the country. India has a largely unemployed population, and pressure on resources is immense. It would be difficult to join the club of developed nations if population growth is not checked. Encouraging larger families without simultaneously expanding social infrastructure could deepen economic inequalities. Moreover, demographic realities differ sharply across India. Northern States such as Uttar Pradesh and Bihar continue to record relatively high fertility rates, while southern States are ageing faster due to better literacy, urbanisation and healthcare outcomes.
The larger lesson is that population is neither a burden nor an asset in isolation. Its value depends on how effectively governments invest in education, healthcare, skill development and employment generation.
