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A recent study conducted by Lancet on worldwide fertility rates has predicted a decline in India's total fertility rate (TFR).

Key Highlights of the Study on Global Fertility Trends and India's Declining Fertility Rate

Global Trends in Total Fertility Rate (TFR)

• By 2050, it is estimated that 155 out of 204 countries (76% of the world) will fall below the replacement level of fertility.
• The projection extends further, indicating that by 2100, the number of countries and territories below replacement level will increase to 198 (97%).
• This highlights a global trend towards declining fertility rates, with populations in these areas expected to shrink unless balanced by immigration.

Decline in India’s Fertility Rate

• India has witnessed a significant decline in its Total Fertility Rate (TFR) over the decades.
• In 1950, India's TFR stood at 6.18, which reduced to 4.60 by 1980, demonstrating a steady decline.
• The most recent data from 2021 reveals a TFR of 1.91, which is notably below the necessary replacement level of 2.1.
• Projections indicate a further dip in India's TFR to 1.29 by 2050 and a strikingly low 1.04 by 2100.
• This indicates a substantial shift in demographic patterns in India towards significantly smaller family sizes, raising concerns about potential economic and social impacts.

Live Births in India

• The decline in fertility rates is reflected in the number of live births in India over the years.
• In 1950, India witnessed over 1.6 crore live births, which increased to over 2.2 crore by 2021, indicating population growth.
• However, projections suggest a decline in the number of live births, with expectations of around 1.3 crore by 2050.
• This decline in live births aligns with the decreasing fertility rates, indicating a fundamental shift in demographic dynamics in India.

What are the reasons behind the decrease in fertility rates in India?

The decline in fertility rates in India can be attributed to several interrelated factors

• Delay in Marriage and Pregnancy

• The trend of delaying marriage and childbirth has become more prevalent, especially among urban populations. 
• Factors such as pursuing higher education, career aspirations, and financial independence contribute to this delay. 
• As a result, women are opting to have children later in life, typically in their mid to late 30s, instead of their mid-20s.

• Increase in Female Literacy and Workforce Participation

• Higher levels of education among women, coupled with increased participation in the workforce, have led to a shift in priorities. 
• Women are now more inclined to pursue careers and personal aspirations before starting a family. This shift in mindset often results in smaller family sizes as women prioritize their professional development and personal fulfillment.

• Urbanization and Busy Lifestyles

• Urbanization has brought about significant changes in lifestyle patterns, with urban areas characterized by busy, fast-paced lifestyles and high-stress jobs. 
• The demands of modern urban living, coupled with career aspirations, may dissuade individuals from having children or opting for smaller family sizes to maintain a balance between work and personal life.

• Economic Viability

• Economic factors play a crucial role in shaping fertility decisions. Rising living costs, including housing expenses, education costs, and healthcare expenditures, pose significant financial challenges for families. 
• Many couples find it economically challenging to support larger families, leading them to opt for smaller family sizes for better financial stability and a higher standard of living.

• Social Changes

• Evolving social norms and values regarding family size and dynamics also influence fertility patterns. Traditional beliefs that emphasized large families for social security or as a source of labor force contribution are gradually fading. 
• Instead, there is a growing acceptance of smaller family units as individuals prioritize quality of life, education, and opportunities for their children over sheer numbers.

Implications of Low Fertility for the Economy

Ageing Population

• With declining fertility rates, India is on track to experience a significant demographic shift towards an aging population.
• This demographic transition poses challenges for public services, particularly healthcare and pension systems, as there will be fewer working-age individuals to support the growing elderly population.
• The strain on healthcare services may result from increased demand for elderly care and medical services, leading to higher healthcare costs and potential resource shortages in hospitals and care facilities.

Labour Force Shortages

• Reduced birth rates translate into a smaller pool of young individuals entering the workforce.
• This trend could exacerbate existing labor force shortages across various sectors, including manufacturing, agriculture, and services.
• Shortages in the labor force may hamper productivity and economic growth, as industries struggle to meet their manpower requirements.
• The shortage of skilled workers may also lead to increased competition for talent, potentially driving up labor costs for businesses.

Economic Productivity

• A declining workforce resulting from lower fertility rates can have adverse effects on economic productivity.
• With fewer individuals contributing to the labor force, there may be a slowdown in overall economic output and growth.
• Reduced productivity could hinder India's ability to compete globally and achieve its economic development goals.
• The decline in productivity may also impact innovation and technological advancement, as there are fewer workers available to drive research and development efforts.

Pension Systems

• Lower birth rates mean fewer individuals entering the workforce to support social security and pension systems.
• This poses significant challenges for the sustainability of pension systems, as there may not be enough contributors to fund benefits for retirees.
• Government budgets may come under strain as they grapple with increased pension obligations and reduced revenue from payroll taxes.
• Reforms to pension systems, such as increasing the retirement age or adjusting benefit levels, may be necessary to ensure their long-term viability in the face of demographic changes.

Policy Reforms

• Addressing the implications of declining fertility rates requires proactive policy interventions aimed at incentivizing family formation and supporting working parents.
• Policymakers may need to implement measures such as affordable childcare, parental leave policies, and tax incentives for larger families to encourage fertility and workforce participation.
• Investing in education and training programs to upskill the existing workforce can help mitigate the impact of labor shortages and enhance economic resilience.
• Additionally, policies that promote immigration and attract skilled workers from abroad may be necessary to supplement the domestic labor force and support economic growth.

Way Forward

Learn from Scandinavian Nations

• Scandinavian countries like Sweden and Denmark offer valuable lessons in promoting gender parity and supporting working parents.
• India can emulate their strategies by investing in healthcare, providing affordable childcare, and implementing programs aimed at engaging men in caregiving and household responsibilities.
• By adopting such measures, India can create a more supportive environment for women to balance their professional careers and parenthood effectively.

Promote Gender Equality in Caregiving

• Encouraging men to take on a greater share of caregiving and home responsibilities is essential for achieving gender equality.
• Initiatives that challenge traditional gender roles and promote active involvement of men in childcare can help create a more equitable division of labor within households.
• By fostering a culture of shared responsibility, India can empower women to pursue their career aspirations while also fulfilling their roles as parents and caregivers.

Economic Measures for Growth and Job Creation

• In addition to social security and pension reforms, India needs to implement economic measures that stimulate growth and job creation.
• Policies aimed at fostering entrepreneurship, attracting investments, and enhancing the business environment can create opportunities for employment and economic advancement.
• Supporting small and medium enterprises (SMEs), investing in infrastructure development, and promoting innovation and technology adoption are crucial for driving economic growth amidst demographic challenges.

Investment in Education and Skill Development

• Investing in education and skill development is vital for preparing the workforce to adapt to changing economic realities.
• Enhancing access to quality education and vocational training programs can equip individuals with the skills needed to succeed in emerging industries and occupations.
• By investing in human capital development, India can ensure that its workforce remains competitive and resilient in the face of demographic shifts and evolving labor market demands.

Collaboration between Government, Businesses, and Civil Society

• Addressing the challenges posed by lower birth rates requires collaborative efforts between the government, businesses, and civil society organizations.
• Governments need to formulate inclusive policies and provide regulatory support to facilitate the implementation of family-friendly workplace practices by businesses.
• Civil society organizations can play a vital role in raising awareness, advocating for policy reforms, and providing support services to families.
• By working together, stakeholders can create an enabling environment that promotes sustainable economic growth, gender equality, and social well-being in India.