The clock is ticking on demographic dividend

The postponement of the 2021 Census was inevitable. But the findings of the National Family Health Survey-5 are startling and the Census will be awaited with eagerness. There are intriguing claims in the NFHS-5 data suggesting long-term demographic trends have changed.

First, caveats. NFHS-5 interviewed 8,00,000-9,00,000 people across 6,00,000 households in two phases. The questionnaire for women had 1,140 questions, while the one for men had 843. This is a large sample. But it’s small as a percentage of the population and it may be biased.

The sex ratios are based on a rough-and-ready counting of the number of people present in the household on a given day. This may be misleading. Also NFHS-5 had two phases. Phase-2 coincided with the second wave of Covid-19. This could have led to errors in data collection.

The NFHS-5 claims the population gender ratio has improved from 991 females to every 1,000 males in 2015-16 (NFHS-4) to 1,020 females for every 1,000 males in 2020-21. For children under five, it is now 929 girls for every 1,000 boys, which is an improvement on the earlier 919 girls per 1,000 boys. Malnutrition remains very high at 36 per cent. The global standard is 952 female births per 1,000 male births. So the gender ratio is not, in itself, good. But if it’s true, it’s an improvement after decades of progressively worsening ratios.

Another big claim is that the total fertility rate (TFR) has dropped to 2.0 children born per female from the NFHS-4 levels of 2.2 and the 2011 Census TFR of 2.4. If true, it is huge. Demographers label a TFR of 2.1 — that is, 21 children born to every 10 women — the “replacement ratio”, where a population stabilises without either growing or falling. Natural attrition of infant mortality, accidental deaths, etc., accounts for the “extra” child. Below a TFR of 2.1, population declines.

A drop from 24 children per 10 women (TFR 2.4 in 2011) to 20 children per 10 (TFR 2.0) in the space of a decade is amazing but not impossible. Of course, it needs to be confirmed by Census data. But it does gel with the falling TFRs in Census 2001 and 2011; and for what it’s worth, it’s backed by other NFHS-5 data, which indicates the number of Indians under 15 has dropped to 26.5 per cent of the population from 28.6 per cent in 2015-16 (NFHS-4).

What does this mean? A better gender ratio could alleviate the “bare branches “problem, as the Chinese call it. China mandated one child per couple back in the day, and as a result of social preferences for male children, it ended up with a huge gender disparity. This has resulted in sociological issues of many kinds and perpetrated distortions in gender ratios. India has suffered from, and will continue to suffer from, versions of this but the suffering will be less if the gender ratio normalises.

A TFR lower than 2 should mean population decline rather than continued growth. Given that India has high, if falling levels of infant mortality, that decline could be reasonably quick. But this also means the so-called demographic dividend will disappear more rapidly.

A large number of people between 15 and 60 may result in faster economic growth. Even if per capita productivity doesn’t rise, the growth in the workforce increases output. Nations that have successfully exploited this demographic dividend to accelerate economic growth have done two key things. They have educated younger cohorts to ensure per capita productivity rises. They have also found productive work for their workforce.

India remains a young nation but it will not get younger in future, if the TFR trend is correct. However, India has not managed to noticeably improve education. Nor has it managed to create employment opportunities. The unemployment numbers and the labour participation rates have been consistently poor for the last five years, and they have gotten worse in the last two. If the TFR trends are correct, India has sadly failed to cash in on the demographic dividend.