Syllabus: Inclusive growth and issues arising from it
Demographic Shifts Across States
- RBI projects Kerala and Tamil Nadu as ageing States by 2036. Elderly population will exceed 22% in Kerala and 20% in Tamil Nadu.
- Bihar, Uttar Pradesh, and Jharkhand will experience rising working-age populations beyond 2031.
- Karnataka and Maharashtra occupy a middle position between growth and ageing pressures.
RBI’s Fiscal Recommendations
- RBI advises ageing States to rationalise subsidies to manage rising pension expenditures.
- Youthful States are urged to invest heavily in human capital development.
- Southern States face reduced Central tax devolution due to population-based Finance Commission weightage.
- Upcoming delimitation exercise may further lower their parliamentary representation.
Challenges for Youthful States
- Education spending shares have stagnated or declined in high-growth population States.
- Questions persist regarding employability of the expanding workforce.
- Workers will enter labour markets during manufacturing automation and AI expansion.
- RBI’s call to boost labour-intensive sectors may risk ageing before achieving prosperity.
Gendered Impact of Ageing
- Research shows ageing disproportionately affects women with fewer financial assets.
- Many elderly women lack pensions due to absence from formal workforce participation.
- RBI’s workforce-focused model assumes continued family support systems.
- Migration and nuclear families are weakening traditional informal safety nets.
Policy Gaps and Social Security Needs
- Fiscal measures alone cannot manage demographic transition complexities.
- Large-scale job creation is needed in green energy and care economy sectors.
- Youthful States must develop healthcare and pension infrastructure proactively.
- Expansion of social pensions conflicts with RBI’s emphasis on fiscal consolidation.
- Without public investment, geriatric care access will remain limited to the wealthy.