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The country’s demographic future will see peaking and then declining numbers driven by a sharp fertility reduction

A new study published in the highly regarded journal The Lancet and prepared by the Seattle-based Institute for Health Metrics and Evaluation (IHME) has shaken up the world of population policy. It argues that while India is destined to be the largest country in the world its population will peak by mid-century. And as the 21st century closes its ultimate population will be far smaller than anyone could have anticipated about 1.09 billion instead of approximately 1.35 billion today. It could even be as low as 724 million.

Readers who follow COVID-19 projections will remember that in March 2020 the IHME projected U.S. deaths from COVID-19 to be around 81000 by August. Deaths in the U.S. today are more than twice that number. The underlying assumptions for the initial model were not borne out. The IHME population projections are also subject to underlying assumptions that deserve careful scrutiny. They predict that by the year 2100 on average Indian women will have 1.29 children. Since each woman must have two children to replace herself and her husband this will result in a sharp population decline. Contrast this predicted fertility rate of 1.29 for India with the projected cohort fertility of 1.53 for the United States and 1.78 for France in the same model. It is difficult to believe that Indian parents could be less committed to childbearing than American or French parents.

Until 2050 the IHME projections are almost identical to widely-used United Nations projections. The UN (https://bit.ly/2PGYALh) projects that India’s population will be 1.64 billion by 2050 the IHME projects 1.61 billion by 2048. It is only in the second half of the century that the two projections diverge with the UN predicting a population of 1.45 billion by 2100 and the IHME 1.09 billion.

Part of this divergence may come from IHME model’s excessive reliance on data regarding current contraceptive use in the National Family Health Survey (NFHS) and potential for increasing contraceptive use. Research at the National Council of Applied Economic Research (NCAER) National Data Innovation Centre by Santanu Pramanik and colleagues shows that contraceptive use in the NFHS is poorly estimated and as a result unmet need for contraception may be lower than that estimated by the IHME model generating implausibly low fertility projections for 2100.

Fertility decline

Regardless of whether we subscribe to the UN’s projections or the IHME projections India’s demographic future contains a peaking and subsequently declining population driven by a sharp reduction in fertility. In the 1950s India’s Total fertility rate (TFR) was nearly six children per woman; today it is 2.2. Ironically the massive push for family planning coupled with forced sterilisation during the Emergency barely led to a 17% decline in TFR from 5.9 in 1960 to 4.9 in 1980. However between 1992 and 2015 it had fallen by 35% from 3.4 to 2.2.

What happened to accelerate fertility decline to a level where 18 States and Union Territories have a TFR below 2 the replacement level? One might attribute it to the success of the family planning programme but family planning has long lost its primacy in the Indian policy discourse. Between 1975 and 1994 family planning workers had targets they were expected to meet regarding sterilisations condom distribution and intrauterine device (IUD) insertion. Often these targets led to explicit or implicit coercion. Following the Cairo conference on Population and Development in 1994 these targets were abandoned.

If carrots have been dropped the stick of policies designed to punish people with large families has been largely ineffective. Punitive policies include denial of maternity leave for third and subsequent births limiting benefits of maternity schemes and ineligibility to contest in local body elections for individuals with large families. However as Nirmala Buch former Chief Secretary of Madhya Pradesh wrote these policies were mostly ignored in practice.

Aspirational revolution

If public policies to encourage the small family norm or to provide contraception have been lackadaisical what led couples to abandon the ideal of large families? It seems highly probable that the socioeconomic transformation of India since the 1990s has played an important role. Over this period agriculture became an increasingly smaller part of the Indian economy school and college enrolment grew sharply and individuals lucky enough to find a job in government multinationals or software services companies reaped tremendous financial benefits. Not surprisingly parents began to rethink their family-building strategies. Where farmers used to see more workers when they saw their children the new aspirational parents see enrolment in coaching classes as a ticket to success.

The literature on fertility decline in western countries attributes the decline in fertility to retreat from the family; Indian parents seem to demonstrate increased rather than decreased commitment to family by reducing the number of children and investing more in each child. My research with demographer Alaka Basu at Cornell University compares families of different size at the same income level and finds that small and large families do not differ in their leisure activities women’s participation in the workforce or how many material goods they purchase. However smaller families invest more money in their children by sending them to private schools and coaching classes. It is not aspirations for self but that for children that seems to drive fertility decline.

In language of the past

Ironically even in the face of this sharp fertility decline among all segments of Indian society the public discourse is still rooted in the language of the 1970s and on supposedly high fertility rate particularly in some areas such as Uttar Pradesh and Bihar or among some groups such as women with low levels of education or Muslims. This periodically results in politicians proposing remedies that would force these ostensibly ignorant or uncaring parents to have fewer children.

Demographic data suggest that the aspirational revolution is already under way. What we need to hasten the fertility decline is to ensure that the health and family welfare system is up to this challenge and provides contraception and sexual and reproductive health services that allow individuals to have only as many children as they want.

Sonalde Desai is Professor of Sociology at the University of Maryland and Professor and Centre Director NCAER National Data Innovation Centre. The views expressed are personal

The NCR-Mumbai route tops in performance. NCAER finds harassment of truck drivers a major hitch across the routes surveyed

The Indian economy is going through a difficult phase due to the Covid crisis. Most of the rating agencies have downgraded the economy. And with Covid slowing down the world economy as well it implies that India has to run the extra mile to get export orders. On top of this logistics management has become a challenge with containment zones — where mobility is restricted — criss-crossing the landscape. Every rupee saved in logistics matters a lot in keeping the production cost low and thereby increasing the competitiveness of the economy.

A recent NCAER study indicates that transportation accounts for around 50 per cent of India’s logistics cost. Hence keeping a tab on the transportation cost and finding ways to reduce it is in the nation’s interest.

Of late the World Bank has developed a domestic logistics performance index (LPI) across nations including India. However these indicators provide only the status of logistics for India as a whole and not at a sub-national level. Given the regional disparity in infrastructure and development across India it is crucial to capture the regional perspective of logistics.

Moreover the survey for the World Bank Domestic LPI was undertaken only at the major growth centres and therefore does not provide an insight into the regional underpinnings.

In this context an effort has been made at NCAER to understand the logistics performance pertaining to transport activities at a sub-national level with a view to providing policy recommendations. We have identified 20 major domestic routes along which the majority of cargoes are moved across India. Understandably the routes include the Golden Quadrilateral the north-south east-west transport corridors and the upcoming dedicated freight corridors.

In general the origin and destination of each route correspond to metros or Tier-I/II cities where transport/warehouse hubs and manufacturers/producers are located. These routes ] were chosen based on interaction with stakeholders — transporters and third-party logistics (3PL) players.

The indicators

In each route the following aspects pertaining to transportation activities were tracked to judge the route’s efficiency: (1) road conditions including signage; (2) harassment by police/other agencies; (3) harassment by officials of the Regional Transport Office (RTO); (4)pilferage/leakage of consignment; (5) need to pay bribes/facilitation money; (6) unavailability of inter-modal exchange points; (7) limitations in terms of rail infrastructure; and (8) limited infrastructure in terms of parking terminals with refreshment facilities for drivers.

Since roadways have emerged as the principal mode of cargo movement our questionnaire mainly focussed on this aspect of transportation. However since policy-makers are increasingly focussing on railways and multi-modal cargo movement we also attempted to encompass this aspect in our measure by including indicators (6) to (8) listed above.

For each of these indicators the respondents were asked to rank their perceptions on a scale of 1 to 10 where 1 implies that the challenge is of low intensity while 10 refers to a high-intensity challenge or problem. The sample size of the pan-India survey is about a little over observations.

A careful assessment of the eight indicators suggests that they may be grouped under two heads: ‘soft infrastructure’ and ‘hard infrastructure’. Grouping under ‘soft infrastructure’ implies that the score on these indicators may be improved with little investments.

On the other hand improving the score for indicators falling in the category of ‘hard infrastructure’ requires significant investments in terms of finance and time. Given the financial constraints during these Covid times it is unlikely that much progress would take place on hard infrastructure. So let us focus on the parameters in respect of soft infrastructure.

The Table lists the four most efficient and least efficient routes as per the perceptions of the transporters/3PL players. As this table shows the problem of harassment faced by the truck drivers from the RTO and police officials is serious irrespective of the efficiency of the routes. In fact this point has been stressed across all the 20 routes studied by us.

The NCR-Mumbai route records the best performance comparatively and the NCR-Guwahati route the worst performance. It may be noted that the NCR-Guwahati route also faces stiff challenges in terms of leakage of consignments and the ‘need to pay bribes’ along the route. In general the Mumbai-Hyderabad Mumbai-Bengaluru and Ahmedabad-Bengaluru routes entail the minimum problems with regard to the ‘need to pay bribes’. However it should also be noted that bribes are an inherent part of the system across all the routes.

In sum we find that the routes whose nodes are located in the western/northern/southern parts of India are more efficient than the others. By and large all routes for which at least one node is located in the eastern part of India score poorly in terms of our indicators. The policy measure is clear: there is need to pay greater attention to the development of soft transport infrastructure in eastern India.

Main takeaways

The key takeaways on soft infrastructure from open-ended interactions with stakeholders are the following:

There is an urgent need to train officials at check-points. As of now these officials prefer to work in the traditional way and are reluctant to accept electronic documents.

The absence of predictability in delivery is one of the major reasons that adds heavily to the logistics costs in India. The main reason for this is the prevalence of heavy traffic congestion at various bottlenecks not only in cities but also on major highways and expressways. Daily changes in diesel prices also add to variations and unpredictability in logistics costs.

Ensuring that freight trains run on schedule and operationalising modern freight terminals are critical steps for attracting rail freight.

Clearly some of these policy prescriptions are not too hard to implement even in this pandemic time.

The writers Dr Devendra B Gupta Senior Adviser and Dr Sanjib Pohit Professor are associated with NCAER. The views are personal.

The COVID-19 pandemic is preparing us to adapt to a diverse way of living with positives and major negatives that directly or indirectly affect our mental states

A recent study of the impacts of the novel coronavirus disease (COVID-19) in Odisha and Uttar Pradesh was conducted by the National Council of Applied Economic Research (NCAER).

It offered valuable insights on the social economic and health impacts faced by households that consisted of adults who suffered from chronic breathlessness children who had acute respiratory conditions and women with gynaecological problems.

A survey was carried out in four districts in Odisha (Bargarh Dhenkanal) and UP (Chandauli and Firozabad) June 9-18 2020 the second week after the lockdown to curb the spread of COVID-19 was lifted.

The sample included 2068 households that were a part of the larger NCAER-Nossal study on Health Seeking Behaviour in Four Indian States. Samples included both urban and rural residents from these districts.

Around 27 per cent and 30 per cent of the households in Odisha and UP respectively had no income during the lockdown according to the study. Urban households (43 per cent) reported more loss of income compared to their rural counterparts (24 per cent).

There was a severe impact for households that relied on casual labour or non-agricultural self-employment as their main source of income during the lockdown in UP. In Odisha the impact was felt primarily by households whose members were engaged in casual labour.

The survey also found a large majority of households — 81 per cent in Odisha and 77 per cent in UP — reported some reduction in income. In contrast 95 per cent households interviewed supported the Union government’s lockdown strategy.

Results from the study showed the impact of the lockdown to be above and beyond economic impacts. It was instead an assortment of additional societal and psychological elements.

A unique feature of the study was it tried to measure the conditions of families before and after the lockdown to understand the disruption in the social economic and health status of the respondents.

We have all observed minor behavioural vicissitudes with major after-effects on our thoughts during this stretch. While buying necessities from the market for example someone at a shop may have obtrusively encouraged you to keep distance implying you could be the bearer of the infection. You hand over your card to pay for your purchases and the shopkeeper asks you to enter the PIN by using a toothpick.

Such changes do leave some sort of impression on our minds including simply walking on the streets looking at each other’s masked faces something that brings a sense of threat that the other person could be a carrier of the virus.

These are a few instances most of us can relate to in this world of the ‘new normal’. The lockdown intensified the number of those who became frustrated and depressed. There is an upsurge in social issues including psychological disorders domestic violence suicides etc. Children are getting depressed as well.

Depression affects 264 million people around the world due to no contact with their peer groups and minimal physical activities according to a May 14 United Nations report.

This pandemic is preparing us to adapt to a diverse way of living with positives and major negatives that directly or indirectly affect our mental states. These include a risk of depression and anxiety sense of detachment loneliness fear of losing our loved ones and stressing about our futures.

Interesting results were found by the NCAER survey over this: Of all responses about 95 per cent households were afraid of being infected and worried about becoming disengaged from others.

This showed how stressed an individual can become from fewer social interactions. Though online media plays an important role in keeping social connect the absence of opportunities for physical gatherings to a large extent causes depression in a certain set of people in society.

Stress is always a result of external repercussions and is presently coming from all directions. India has a rich culture of living in a close-knitted environment. It thus gets difficult for masses to acclimatise to this kind of ethos where they are constrained to meet people.

Nobody is deprived of such adverse bearings. Pecuniary effects are prominent all over but what about psycho-social impacts?

Social-distancing and its necessary norms set a certain number of challenges within family and other people. Around 86 per cent households fear losing their lives with almost 79 per cent respondents saying they were stressed due to being isolated something that can be a chief cause of escalation in cases of anxiety and depression.

Dealing with such hard-hitting conditions it’s our human tendency to hunt for a support system care and reliability from others especially in rural India with its amalgamation of care and support from neighbours who are treated as family adherents.

This statement is well supported by the outcomes initiated in the study. During the lockdown 81 per cent of households in Odisha were concerned about the well-being of their neighbours while this was only 41 per cent in UP.

On the other hand these figures were 77 per cent for Odisha and 29 per cent for UP before the lockdown. Another major factor that came up strongly through this study was reliability on others around them.

It was found that around 84 per cent of the respondents (Odisha at 97 per cent UP at 72 per cent) could rely on at least one person for support while 81 per cent of the respondents were open to support others (Odisha at 90 per cent UP at 72 per cent).

In both circumstances Odisha seems to be more socially connected and supportive to the society at large. This indicates an inner sense of fear accumulated over months of lockdown that has affected the lives and livelihoods.

This season of insecurity has worried the populace economically socially and psychologically. The pandemic is going to influence the economy as no other time has prompting enormous psycho-social effects to us with its effect noticeable in all-inclusive areas.

Its impact on underestimated segments however primarily women and children was huge in India and globally. COVID-19 has changed the world from numerous points of view: Few ramifications on mankind have left a blemish on the lives of every individual.

The issues of well-being decline of the labour-intensive economy scarcity of drugs sanitisers destitution and joblessness has without a doubt become the overwhelming focus of each and every one.

The infection may disappear (ideally) sometime yet the effect of this doubt will pose a potential threat to social relations. Major metropolitan cities in India still struggle to contain the virus. The only feasible way of defeating the pandemic is containing and eradicating it for our survival.

There is an urgency to build a system of ‘living cooperation’ to overcome the increasing dread of social-distancing and isolation. Any human investment (or investments in human values) in these social relations will certainly change or minimise the state of socio-psychological insecurity that has entered social life today.

Views expressed are the authors’ own and don’t necessarily reflect those of Down To Earth.

Fall in income and depreciating exchange rate would have a dampening impact on imports demand while rising domestic inflation should have reverse impact.

Is a merchandise trade surplus of around USD 0.8 billion in June 2020 a first in 18 years since January 2002 a turning point in India’s trade history?  The NCAER Quarterly Review of the Economy June 2020 has documented the weakness in India’s international trade position pre-coronavirus and its collapse during the first three months of the current fiscal.  However the June numbers throw an element of surprise.

Placing it in context merchandise exports and imports’ growth rates have fallen for five consecutive quarters since Q1: 2019-20. The pace of deceleration gathered speed in Q4: 2019-20 and Q1: 2020-21 due to the lockdown associated with the novel coronavirus.  Merchandise exports grew at [(-) 12.8%] in Q4: 2019-20 and [(-) 36.6%] in Q1: 2020-21 on a year-on-year (y-o-y) basis.    Merchandise imports grew at [(-) 9.8%] in Q4: 2019-20 and [(-) 52.4%] in Q1: 2020-21 on a y-o-y basis.    The monthly data shows us that while y-o-y growth of exports and imports decelerated in June 2020 compared to April and May 2020 imports fell at a faster rate than exports.  Exports and imports for June 2020 declined by (-) 12.4% and (-) 47.6% respectively on a y-o-y basis resulting in a merchandise trade surplus in June 2020.  Overall there was a trade deficit of USD 9.1 billion in Q1: 2020-21 exhibiting a huge fall by 80.2% on a y-o-y-basis.

We examine the dynamics of exports and imports empirically to see whether there are particular changes in the composition of commodities and direction of trade geographically.  From theory we know that exports demand is a function of foreign income export prices foreign prices and exchange rate. Imports demand is a function of domestic income price of imports domestic inflation and exchange rate.  

Commodities

Non-petroleum and non-gem & jewellery exports grew at (-) 3.5% on a y-o-y basis in June 2020 and non-oil and non-gold at (-) 41.4%.  As Figure 1 shows that negative growth rates were almost similar in April 2020 and then there is a large divergence since May.  

The major components of India’s exports in June 2020 (DGCIS website) included engineering goods drugs and pharmaceuticals organic & inorganic chemicals petroleum products gems & jewellery. 

The positive y-o-y growth of organic & inorganic chemicals exports (19.06%) and drugs & pharmaceuticals (9.89%) arrested the slide in overall exports in June 2020.  Negative drivers of exports were RMG of all textiles (-34.84%) and engineering goods (-7.5%).    The role played by drugs and pharmaceuticals in arresting the slide of exports in times of pandemic was a positive signal.  

In contrast in the case of imports all the key components of imports – gold; petroleum crude & products; electronic goods and; machinery electrical & non-electrical saw double-digit fall in June 2020 on a y-o-y basis.

Role of China

The reduced imports of machinery and electronic goods can be attributed to a disruption of the global supply chain dominated by China. Imports from China accounted for 13.8% of India’s total imports in FY 2019-20 making its share the largest. India’s import basket of Chinese goods is dominated by electrical machinery and electronic goods constituting about 29.3% of total Chinese imports to India. However with the pandemic hitting the Chinese economy in November 2019 overall Chinese imports shrunk by 7.2% (y-o-y basis) during FY 2019-20 becoming the worst hit amongst India’s top 5 importers. This trend is also mirrored in the electrical machinery imports declining by 7.4% in FY 2019-20 on a y-o-y basis. 

Though the figures for India’s imports from China for April 2020 have shown improvement over the March 2020 figures it is still quite low in comparison to last year’s value. This slight improvement is also reflected in recently released figures for China’s overall trade wherein China’s exports and imports showed positive y-o-y growth – exports surged by 0.5% and imports rose by 2.7%. However as China’s exports pick up slowly compared to its imports (largely driven by pharmaceutical goods) the return to normal with regard to India’s imports from China may take longer and hence paints a favourable trade balance picture.

Overall we find that growth of exports to North-east Asia and ASEAN countries was higher in June 2020 on a y-o-y basis versus June 2019 (DGCIS website).  Trade with remaining regions is lower but there is no major change in the order of importance of regions. In the case of imports trade with all regions is lower in June 2020 versus June 2019 (DGCIS website).

Macro variables

The NCAER QRE June 20 Update simulated that the combination of aggregate demand and supply would in all likelihood result in negative output with elevated inflation.  Indian consumer inflation was 6.1% in June 2020. The rupee has depreciated against the dollar. The RBI’s Consumer Confidence Index has fallen from 115.2 in March 2020 to 97.9 in May 2020 showing muted sentiments.  The IMF World Economic Outlook June 2020 had forecasted 0.3% retail inflation for Advanced Economies 4.4% for Emerging Market and Developing Economies and (-) 4.9% growth for world output.  The rupee has depreciated against the dollar.

Fall in income and depreciating exchange rate would have a dampening impact on imports demand while rising domestic inflation should have reverse impact. The deep fall in imports reflects the impact of the former variables.  

Fall in income and relative lower inflation abroad should have a dampening impact on exports demand. We see the reverse because of a particular reason i.e. demand for Indian pharmaceuticals organics and chemicals and other food products has resulted in upward demand for Indian exports. This is inelastic demand with India playing to its comparative advantage in a world afflicted by the pandemic. While these effects may help India sustain its exports momentum and therefore trade surplus for a while but whether it translates to an overall growth engine for the Indian economy remains to be seen.

Authors are Prerna Prabhakar Associate Fellow NCAER and Bornali Bhandari Senior Fellow NCAER Views are personal.