The economics of India’s population growth

Some years ago, while speaking at the release of the book Religious Demography of India by the Center for Policy Studies, an Indian think-tank affiliated to Rashtriya Swayamsevak Sangh, former RSS head K S Sudarshan exhorted Hindus to have larger families. He urged them to have no fewer than three children and encouraged them to have as many they could afterward (teen se kam nahi, aap jitna jyaada kar sakein utna acha!).

The immediate provocation for this drastic remedy to what Sudarshan obviously considers a serious national problem is the rates of population growth of Muslims and Christians in India. That the Muslim population is growing at a faster rate than Hindus’ in India is well known. It has been so since 1951.

In the decade 1951-61, the number of Muslims grew by 24.9% while that of Hindus grew by 18.6%. In 1991-2001, the population growth rate of Muslims after adjusting for the exclusion of Assam and Jammu and Kashmir in the 1981 and 1991 censuses was 29.3%, while that of Hindus was 20.0%.

Not surprisingly, the ruling Bharatiya Janata Party (BJP) and its like-minded allies have tried to stoke fears about Hindus being swamped by Muslims. That, of course, is a ridiculous notion, not only will present trends not continue, demographers predict that population growth of all groups in India will cease by around the end of this century.

It has been calculated that even if present trends continued it would take 247 years for Indian Muslims to catch up with Hindus in terms of numbers. It’s not as if the RSS is not capable of getting its math right, but logic is not the issue.

To support its distorted inferences, the RSS has, for a start, considerably enlarged what is known as India. This one sentence in the preface of the book is a dead giveaway: “When we look at the data for the whole of India, including the Indian Union, Pakistan and Bangladesh, the new data only confirms the distinct possibility that Muslims and Christians together shall become the majority in the Indian region early in the second half of the 21st century.” So their India now includes Pakistan and Bangladesh. Then why not Nepal? And even Sri Lanka?

The then-chairman of the All-India Muslim Personal Law Board, Maulana Rabey Hasni Nadwi, has categorically stated, “There is no room for family planning in Islam.” He obviously is not inspired by the fact that in most proclaimed Islamic republics like Iran, Indonesia, Egypt, Pakistan and Bangladesh, the governments actively encourage family planning.

Most demographers project that India’s population growth will taper off around 2060. But the growth of population in the BIMARU belt (the states of Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh) will continue until 2091. The Muslim growth will also level off around then and by that time they will constitute a good 18.8% of India. Given its political implications this could be a matter of concern in some quarters.

But what should equally be a matter of concern is the consequent implication that if the BIMARU population keeps growing until near the end of the 21st century, then the proportionate populations of other regions will actually be contracting. This may have even graver political consequences. But this does not seem to concern the Hindu nationalist Sangh Parivar, a vast network of affiliate organizations. They seem only perturbed about Muslim fecundity.

Decades after liberalization not much has changed in India. About a third of its billion-plus population lives below the poverty line. And mind you the Indian poverty line, because of its emphasis on daily caloric intake, is really the hunger line; it’s not a poverty line that takes into account basic human needs.

The gross domestic product of India in the 2004-05 fiscal year was 27,600 billion rupees (US$395 billion at current exchange rates), compared with 89.7 billion rupees in 1950-51. This phenomenal growth also saw the share of agriculture decline from 55.8% to 17.32% of GDP, while that of industry grew from 15.2% to 29.02% and the service sector from 29.0% to 53.66%. It made it seem that India is emerging as a post-industrial society without having real industrialization.

We know from experience that redistribution policies do not work well in practice. In 1994, almost a full quarter-century after Indira Gandhi’s slogan “Garibi Hatao” (“eliminate poverty”) became the leitmotif of India’s economic policies, the Gini coefficient, which is the measure of income inequality, remained almost the same as in 1971 at 0.345. In 2003, the Gini deteriorated to 0.378. Urban and rural inequality has also worsened.

Worse, the inequality between the regions is alarming. There is a very clear divide apparent now in India with the Hindi-speaking and eastern region quite visibly left behind.

The BIMARU population is also growing at a much faster pace than elsewhere in the country. The growth of population of the four southern states is less than half that of the BIMARU states. True, the populations of Punjab, Haryana, Gujarat and Maharashtra are also growing at rates comparable to those four states in poor economic conditions, but their growth in per capita income is comparable to that of the southern four.

Don’t jump to conclusions that if the population growth were to have slowed their per capita income growths could have been quite spectacular. On the face of it, that may appear so, but it doesn’t work that way.

At a macro level, both China and India have had a phenomenal expansion of population combined with economic growth. Quite clearly population growth is not necessarily a brake on economic growth. On the other hand, there is much to suggest that population growth contributes much to economic growth.

The critical factor here is the dependency ratio, which is the ratio of dependent people aged 0-14 and 65-plus against productive people in the 15- 64-years age group. The lower the dependency ratio the better. China currently has a more favorable dependency ratio of 450 per 1,000 while that of India is closer to 650 per 1,000. But by 2020 the Indian dependency ratio should become the lowest in Asia, giving it the first real demographic opportunity to better the performance of today’s high fliers.

Japan now is in the most difficult stage of its demographic transition. By 2020, the biggest segments of the Japanese population will be in the above-65-years age group, with close to 15 million people in just the above-80 age group, making it the largest segment. To compound matters, Japan’s population will begin contracting.

Much of Europe will face similar problems. By 2050 Russia will contract from 145 million now to about 90 million, whereas Italy will shrink to fewer than 40 million from 58 million now. It seems that among the major developed economies, only the US will continue to have favorable demographics and economic growth. But by then the US will be a nation where Hispanics, blacks and Asians will constitute the overwhelming majority – which might even make it a better country, who knows?

By 2020, India will have more than 270 million people in the 15-35 age segment, when productivity and economic contribution is the highest. If savings rates hold and with productive potential at its peak in 2020, India will have a great window of opportunity to make it as a developed and prosperous economy by 2050 if it is able to educate and empower the masses. Such a demographic constellation will never appear again. It’s just too bad India’s leaders are preoccupied with their individual constellations, and not the nation’s.

There are other trends, some disquieting, also visible now. The foremost of these is the sharp increase in the numbers of agricultural laborers. This is the classification reserved for “the poorest of the poor.” Their numbers rose to 106.8 million in 2001, posting a decadal growth of 43.16%; almost double the 23.51% of the previous decade.

This is a severe indictment of the policies pursued in the decade after the so-called liberalization. During this period the entire political spectrum enjoyed power and each formation equally vigorously endorsed the so-called liberalization. Naturally we will see no fingers pointed inwards.

But not all the RSS’s concerns are unfounded. If economic conditions determine population growth, we must wonder why the growth of the Scheduled Caste (SC) and Scheduled Tribe (ST) segments has remained below the Muslim growth trend. As opposed to the 29.3% decadal growth between 1991 and 2001 of Muslims, the decadal growth rate of SCs and STs was 20.55% and 24.45% respectively. The household annual incomes as well as per capita incomes of the SC and ST groups are lower than that of Muslims. Muslims, in turn, are generally poorer than caste Hindus.

Quite clearly there are segmental attitudes impacting population growth. Literacy levels of both rural and urban Muslims are lower than Hindus’, but not by very much. Perhaps what is more significant is that as a percentage, more than twice as many uneducated Hindu women – 44% compared with 18% – are employed than similarly disadvantaged Muslim women.

The economic plight of rural Muslims is quite similar to that of rural Hindus. As a percentage, more rural Hindu households (51.2%) are landless than rural Muslim households (39.5%). But when it comes to larger holdings of more than 1 hectare, the incidence of Muslim households with land is over twice that of Hindus.

For instance, in the 1-2-hectare segment, 11.7% of rural Muslim households fall into this category while it is only 6% for Hindus. Even so, the distribution of rural Muslims and Hindus by household monthly per capita expenditures remains about the same. It is only in the urban areas that the Muslims fare really poorly. About 40% of Muslim households have a per capita expenditure of less than 425 rupees per month. At the upper end, 17.1% of Hindu households have per capita expenditures of over 1,120 rupees per month as opposed to 5.8% for Muslims.

Finally here’s something that should worry the Sangh Parivar to no end. The proportion of caste Hindus has been steadily dropping since 1961 when it was 61.97%. It is 56.05% now.

This article appeared previously on the author’s blog.