Learning to live together, all eight billion of us

Population growth and the changing geographic and generational balance of power

The United Nations estimates that the world population will reach 8 billion on November 15, 2022. Our minds had barely wrapped around a global population of 7 billion in 2011, and now, only 12 years later, we are looking at a population of 8 billion. To put this in historical perspective, it took from the dawn of humankind to about 1800 AD to reach a global population of 1 billion, and only 200-plus years to add the next 7 billion. If the present trends continue, the world population will probably stabilise at about 10.5 billion.

Behind this bare outline lies a vast transformation in the global balance of power. The coming century belongs to Asia and Africa if strength lies in numbers. In 1900, Europe and North America combined were home to 31% of humankind. The UN estimates that its share in the global population has declined to 14% today, and is expected to go below 12% by 2050. China, which formed 25% of the world population in 1900, will decline to 14% by 2050.

In contrast, the global population share of undivided India was 17%, while the combined population of India, Pakistan and Bangladesh is now 23%. India alone will form 17% of the global population in 2050. Global discourse has yet to recognise what demographers have long predicted: Africa’s share in the global population will rise from nearly 6% in 1900 to over 21% in 2050.

Changing centre of gravity

How this massive change in the population’s centre of gravity will change the international power balance remains open to speculation. However, one thing is clear, Asia and Africa will have an important role in determining our shared future. It would be surprising if, despite its military and economic might, the West would not feel threatened in a world where it accounts for an increasingly small proportion of the global population.

The changing age distribution complicates adjusting to this changing geographical centre of population gravity. Declining fertility in the West has led to the rapid ageing of the population. Immigration remains the only option to reduce the dependency ratio imposed by the rising proportion of the elderly and declining fertility among the native-born population. Already immigrants form a large proportion of the people in many developed countries. Nearly 30% of Australians were born in other countries, as were 21% of Canadians, and about 14% of Americans. While this gives rise to tremendous ethnic tensions, it also increases the power of minorities in these host countries. We should expect the emergence of more leaders like British Prime Minister Rishi Sunak and U.S. Vice President Kamala Harris.

This global tension between changing geographic and generational power balance is also mirrored in India. Differential population growth has led to a decline in the share of the Indian population in the southern States from 26% in 1951 to 21% in 2011. Labour force consequences of this declining population share are further aggravated by population ageing. As with the global experience, this void of workers is filled by migrants from other States with interesting consequences. For example, Chhath, a Bihari festival, leads to labour shortages in Kerala as migrant workers return home. While the proportion of migrant workers in southern States is still tiny, it can be expected to grow as the economy in South India expands and home-grown workers age.

These parallels between global and internal transformations challenge us to contemplate the implications of population change. We must first grapple with whether size has any meaning regarding power-sharing arrangements. Few Indians will question that India’s size entitles it to a permanent seat on the UN Security Council. Does the same notion of representation carry over to our internal power-sharing arrangement? Article 81 of the Indian Constitution mandated the allocation of Lok Sabha seats across States in proportion to their population. However, in 1976 the fear of overpopulation led to a constitutional amendment freezing the seat allocation based on population figures of the 1971 Census until 2001; this was further extended to 2026. Milan Vaishnav and Jamie Hintson from the Carnegie Endowment for International Peace estimate that if seat allocation were based on the Census of 2011, four north Indian states (Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh) would collectively gain 22 seats, while four southern States (Andhra Pradesh, Kerala, Telangana and Tamil Nadu) would lose 17 seats.

Adjusting to migration created by changing age composition and labour demands poses a different challenge. With a growing influx of culturally diverse migrants, host cultures find themselves between a rock and a hard place. About 22% of Germany’s population is age 65 and above, leading to labour shortages. Germany needs workers in diverse occupations that require people with high education as well as those with vocational skills like carpentry and nursing. However, far-right populist politicians continue to engage in anti-immigrant rhetoric despite this need for immigrant workers. This, too, has its parallel in locals-only legislation in Andhra Pradesh and protectionist demands in Tamil Nadu. As Chinmay Tumbe notes, Marwari merchants, moving from trade and banking to industry and cultural and educational philanthropy, played a vital role in the economy of Kolkata. Still, widespread protests led by trade unions and political interest groups drove many Marwaris away during a period that coincided with the decline of Bengali industries.

Migrants, and diasporas

Host cultures’ challenge in assimilating migrants is mirrored in how origin countries and regions capitalise on their diasporic communities. Israel is the most striking example of the soft power of its extended community. Jewish individuals worldwide, particularly in America, are seen to carry a little piece of Israel within their hearts, whether they have ever lived in Israel. Birthright citizenship and welcoming policies cement these ties. India has welcomed the philanthropic contributions of its diasporic community and its soft power in specific instances — for example, in garnering political support in the U.S. for the India-U.S. nuclear agreement. However, India’s relationship with her diaspora remains uneasy at best. Most recently, it was reflected in the comments on Indian social media questioning the Indian connection of Mr. Sunak. With population growth in Africa, it will likely emerge as a region of strategic interest. A long history of the Indian diaspora in various parts of Africa makes it imperative that New Delhi find a way of mobilising this untapped resource and overcoming its ambivalence.

These challenges suggest that we need to reflect on the implications of a world population of 8 billion and learn to address the changing geographic and generational transformations if we are to navigate our demographic destiny successfully.

Sonalde Desai is Distinguished University Professor, the University of Maryland and Professor and Centre Director, NCAER-National Data Innovation Centre. Views are personal.

Building India’s Export Competitiveness in Electronics–2025-26: From Assembly to Manufacturing Hub: Call to Action Report

The need to create a globally competitive electronics industry that meets international standards of excellence and efficiently caters to both the domestic and export markets has always been a priority for the country. Accordingly, the National Policy on Electronics (NPE), 2019, and its precursor in 2012, laid down certain goals to significantly boost domestic production by encouraging and driving capabilities in the country for developing core components and creating an enabling environment for the industry to compete globally. Against this backdrop, NPE, 2019, set an aspirational target for the electronics industry to achieve a turnover of US$ 300 billion by 2025-26, which, in turn, would entail a fourfold increase in electronics production between 2020-21 and 2025-26. In this context, NCAER, prepared a Call to Action Report, for the Confederation of Indian Industry (CII), to assess the current scenario of the electronics industry and propose recommendations for policy interventions to facilitate achievement of the NPE goals and build export competitiveness in the country in a span of 1000 days.

Air pollution is not just about PM10 and PM2.5

Exposure to nanoparticles, arising from both natural and man-made processes, can cause cardio and pulmonary problems

Another winter and the discourse invariably turns towards air pollution in Indian metros, with a focus on Delhi. Increasingly, we come across studies that estimate the number of Indians who would die early due to air pollution, or have to set aside a large part of their health budget to take care of diseases arising due to air pollution.

The rising impact of air pollution leads to increased government health expenditure in two ways: first, the form of reimbursement of costs incurred by people with insurance cover under Ayushman Bharat; and second, in government hospitals for treatment of diseases due to air pollution.

Despite the gravity of the problem, it is not well understood. The discourse on air pollution in India centres on mean concentration of particulate matter PM10 (particles smaller than 10 microns) and PM2.5 (particles smaller than 2.5 microns, about 25 to 100 times thinner than a human hair). This is solely due to the fact that the Central Pollution Control Board has the facility to monitor only PM2.5/PM10 pollutants in Delhi or elsewhere. As a result, we are probably underestimating the deleterious effects of air pollution by a big margin.

There are pollutants which are more harmful than PM10/PM2.5 in the case of air pollution, but are usually not talked about. These are nanoparticles, arising from both natural and man-made processes: soil erosion, dust storms, burning of unprocessed fuel, industrial, and mechanical processes.

Where studies have extensively researched health impacts of PM2.5 and PM10 exposure, evidence on the toxic effects of nanoparticles on human health is insufficient. Unearthing this calls for an interdisciplinary research team of scientists, health professionals, and epidemiological researchers to be convinced of the scientific composition, transmission and exclusive effects of nanoparticles on human health.

The chemically reactive nature of nanoparticles makes the risk assessment highly uncertain. Inhalation is the most common route through which people get exposed to nanoparticles. Ingestions and dermal contact of engineered nanoparticles are also popular transmission mechanisms. Inhaled particles can enter the blood circulation from where it can be carried to different organs such as heart, kidney and liver.

Suggestive evidence shows that nanoparticles accumulated in the vascular sites can clot blood vessels, increasing the likelihood of heart attack and stroke. Occupational exposure to these toxic elements can increase the risk of lung cancer.

For patients with pre-existing heart or pulmonary conditions, the situation can get worse when exposed to elevated particle concentrations. Infant mortality, neonatal complications, and birth defects are also likely to increase with ever increasing concentrations of matters smaller than 10 µm.

Incidentally, while the pollution mask provides protection against PM10/PM2.5 particulate matter, the same is not true for pollution from nanoparticles. Moreover, with no mechanism available to record the extent of air pollution arising from nanoparticles, the risk arising from same is now a black box. Thus, there is a need for the government to raise awareness on the dangers of nanoparticles. Monitoring stations should make an effort to measure the same; without quantifiable statistics, we cannot highlight the dangers involved.

The writers are respectively Senior Consultant, George Washington University and Professor, NCAER. The views are personal

Monthly Review of the Economy: October 2022

In the Review, we summarise the economic and policy developments in India; monitor global developments of relevance to India; and showcase the pulse of the economy through an analysis of high-frequency indicators and the heat map.

Click here for previous issues

Press Release: Business Expectations Survey October 2022

NCAER-NSE Business Expectations Survey for 2022–23: Q2
The Business Confidence Index is higher than it was a year ago but has softened sequentially

New Delhi (Tuesday, October 26, 2022): The National Council of Applied Economic Research (NCAER), one of India’s premier economic policy research think tanks, carried out the 122nd Round of its Business Expectations Survey (BES) in September 2022, with support from the National Stock Exchange of India Limited (NSE). NCAER has been carrying out the BES every quarter since 1991, covering 500 firms across four regions.

The NCAER-NSE Business Confidence Index (BCI) has recovered from the lows of the pandemic year and is higher at 132.5 in 2022–23:Q2 than it was a year ago at 117.4 in 2021–22:Q2. There has been some softening of sentiments sequentially in the second quarter compared to 138.5 in 2022–23:Q1.

Sentiments of three of the four BCI components softened, namely, ‘overall economic conditions will be better in the next six months’, ‘present investment climate is positive’ and ‘present capacity utilisation is close to or above optimal level’. The share of positive responses remained virtually unchanged between this round and the previous one for the component, ‘financial position of the firms will improve in the next six months’.

The latest BES Report can be accessed and downloaded from here.

Methodology: NCAER has been conducting the BES every quarter since 1991. The BES findings reported here relate to 500 firms. The survey elicits responses from firms across six cities to assess business sentiments in the four regions of India: Delhi-NCR, representing the North; Mumbai and Pune, the West; Kolkata, the East; and Bengaluru and Chennai, the South. All the industries are represented in terms of ownership type (public sector, private limited, public limited, partnerships/ individually owned firms, and multinational corporations); industry sector (consumer durables, consumer non-durables, intermediate goods, capital goods, and services); and firm size based on the annual turnovers of the firms (in the range of less than or equal to ₹1 crore, more than ₹1 crore to less than or equal to 10 crore, more than ₹10 crore to less than or equal to ₹100 crore, more than ₹100 crore to less than or equal to 500 crore, and more than ₹500 crore). The sample is drawn randomly from a list of firms in each city. A sizeable number of units taken in one round are retained in the next round to maintain continuity of the analysis.

The BCI is computed on the basis of responses from firms to four questions. Two of these questions focus on macro factors and the other two on micro factors. All the questions carry equal weight. The BCI is a simple average of all the positive responses in the case of three questions, whereas in the case of the fourth question on capacity utilisation, an average of the sum of the responses indicating ‘improvement’ and ‘status quo’ is taken. Thereafter, the BCI is compared with the base value (denoted by the value of 100 in Round 7; 1993) to determine change. An increase in the level of the BCI (that is, a larger share of positive responses) reflects optimism in the business sector about the performance of the economy.

About NCAER
NCAER, the National Council of Applied Economic Research, is India’s oldest and largest independent economic think tank, set up in 1956 to inform policy choices for both the public and private sectors. Over the past 65 years, NCAER has served the nation well with its rich offering of applied policy research, unique data sets, evaluations, and policy inputs to Central and State governments, corporate India, the media, and the citizenry. It is one of a few independent think tanks world-wide that combines rigorous economic analysis and policy outreach with deep data collection capabilities, particularly for large-scale household surveys. NCAER is led by its Director General, Dr Poonam Gupta, the institution’s first woman head, who assumed office on 1 July 2021, and it is governed by an independent Governing Body currently chaired by Mr Nandan M. Nilekani.

About NSE
The National Stock Exchange of India (NSE) is the world’s largest derivatives exchange by trading volume (as per Futures Industry Association) for the calendar year 2021. NSE is ranked 4th in the world in cash equities by number of trades (as per World Federation of Exchanges) for the calendar year 2021. NSE was the first exchange in India to implement electronic or screen-based trading. It began operations in 1994 and is ranked as the largest stock exchange in India in terms of the total and average daily turnover for equity shares every year since 1995. NSE has a fully integrated business model comprising exchange listings, trading services, clearing and settlement services, indices, market data feeds, technology solutions, and financial education offerings.

Please see the following links for the media analysis of the findings and Business Confidence Index (BCI) in the latest NCAER-NSE Business Expectations Survey:

Business Standard: Business confidence falls for second straight quarter, says NCAER survey

The Times of India: NCAER-NSE biz confidence higher in Q2

Hindustan Times Insight: The NCAER-NSE Business Expectations Survey for India: Second Quarter 2022–23

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