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Indian government warns of ageing population

THE Indian government on Thursday (4) warned in a study that its population is going to start to age and it needs to be prepared to merge schools and raise the retirement age.

While India should be set to benefit from the so-called "demographic dividend" over the next decade as its working population is set to increase by about 9.7 million a year between 2021-31, that will quickly fade as the nation's fertility rate plunges below replacement level.


The conclusions in the study, "India's Demography at 2040: Planning Public Good Provision for the 21st  Century," will have major implications for many companies, particularly those that have been eyeing consumer demand from India's young population.

It said the number of children in the 5-14 age bracket will decline significantly, leading to the need for school mergers and less focus on building new ones.

Already states such as Himachal Pradesh, Uttarakhand, Andhra Pradesh, and Madhya Pradesh have fewer than 50 students enrolled in more than 40 per cent of their elementary schools, according to the study, which was included in the government's annual Economic Survey.

It also said that policymakers need to prepare for an increasing number of elderly people, estimating there will be 239.4 million Indians over the age of 60 in 2041 against 104.2 million in 2011.

"This will need investments in health care as well as a plan for increasing the retirement age in a phased manner," concluded the study, which was authored by India's chief economic adviser Krishnamurthy Subramanian and his team of economists.

The current retirement age for most government workers in India is 60.

Meanwhile, the number of Indians aged between 0-19 has already started to decline and the proportion of the population in that age group is projected to fall to 25 per cent by 2041 from 41 per cent in 2011.

The demographic dividend that is talked about in India refers to the current situation where the nation's labor force is growing quicker than the rest of the population it supports.

If the newcomers to the labour market get well-paid jobs it boosts consumption and economic growth.

(Reuters)

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