"Changing demographics and lifestyle - An impending crisis in India"
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Over the last 63 years after independence, India has been making giant strides in almost every field that was considered a monopoly of the west. Be it textiles, agriculture, manufacturing and of late, IT and ITES, India is pitching hard as a worthy contender for international recognition and status of a superpower. The economic reforms spearheaded by the government in 1992 accelerated this growth to newer pastures like bio tech, renewable energy, medical research and eco tourism. These achievements were possible because of our biggest asset – man power. With a 1.18 billion strong population and no dearth of opportunities in a flat global village, we are poised to achieve greater heights and glory. In contrary to the Malthusian view that population growth would put pressure on scarce resources and impede growth, many south Asian counties, including India have accelerated growth by judicious and effective use of human capital as an engine for growth in the last 30 years. Gone are those days when India was stricken with poverty and malnourishment. Children died in large scale famines and life expectancy numbers were abysmally low. In 1920s, India had an astonishingly equal birth and death rates – 48 per thousand. The raging WW-II didn’t make things any better for India. Since then, our population has virtually exploded to touch 1 billion in 2001. Fast forward to the 2009 – Due to improvement of living standards and advancements in medical field the same figures stand at 22.22 births and 6.4 deaths per 1000. Average life expectancy is a tad less than 70 years now. Amidst all the brouhaha that a country that has 65% of its population below 35 years of age would take the entire world by sheer numbers, there is an uncomfortable demographic shift that’s happening in India and most of us are oblivious about it. We are facing a huge “age-quake” that threatens to erode hard earned wealth of nations The U.S.A, given the boom it post WWII is now facing challenges to provide social security for its aged and disabled. Statistics tell us that “baby boomers” (born between 1945 and 1962) are retiring now and is eating a huge chunk of U.S spending on social security. A concept called “Spending wave” suggests that once a generation of people age and move into their unproductive years, they tend to burden the economy and increase costs for the state to maintain them. AARP (American Association of Retired Persons) has been frantically lobbying for higher spending for retirees. As we speak, the nation is today facing a huge pension crisis with an estimated shortfall of $1.5 trillions. Take Japans case- Japan had a boom in population in 1930-1940s when 37% of population was under 14 years of age. When this generation eventually retired en-masse in 1990s, Japan faced a huge deficit in allocation for the aged and disabled. How does all this affect us? Or rather why are such things being discussed when things back in India are hunky dory? If one watches closely, India is also facing a similar “demographic time bomb” waiting to explode and take down the economy with it. The massive economic growth that’s been talked about in India comes with a price tag -The price we pay for medical care when this booming generation retires. If one notices, the following has happened to our society in the last 20 years 1. Emergence of nuclear families 2. Lifestyle disorders arising due to an unhealthy lifestyle 3. Ever widening gap between haves and have nots 4. An intent to break away from shackles and social taboos In a way, parallels can be drawn between the baby boomers of the U.S and the current Indians who were born between 1975 and 1990. This generation was the first to taste the fruits of economic reforms and grabbed opportunities that came their way. This cohort considers itself different from all the previous ones. They also carry a distinct cultural identity that emphasizes on individuality and freedom. This is the generation that would retire in the next 40 years. The number of elders (>60 years) would increase from current levels of 7% to about 25% by 2050. Also, by 2050, it is estimated that the number of people below 15 years of age would be same as that of those above 60. This is really alarming for the following reasons 1. A nuclear family structure means that the elderly would have to fend for themselves or depend on caretakers 2. A flat world with opportunities means that the younger lot may feel its burdening and emotionally taxing for them to take care of elders India, traditionally never had an institutionalized social security in place. The current public health insurance and old age pension schemes in India are woefully inadequate. However, all these years, the joint family system has been of immense support as far as elderly care is concerned. Are we prepared to face this eventuality? Many demography experts are of the opinion that the elderly, once out of their productive years may start draining resources of the family. This might eat away hard earned wealth of the nation thereby applying the brakes on growth. Thus, average productivity of the Indian work would fall substantially as the worker ages and also takes the burden of elderly care. Estimates suggest that dependency ratio (the ratio of elderly dependent on the young) would zoom to 23% by 2050 The current social security system in India is woefully under prepared to face such a calamity. Given that 80% of these elders would dwell in villages and a major proportion of them being widows/widowers, it shudders to think how the government would come up with a system that gives them a right to dignified living. Also, Insurance companies are reluctant to cover people beyond 60 years as they carry huge risk of falling sick and needing emergency care. Given that India doesn’t have a history of affordable geriatric care, things don’t seem positive in the long run. The need of the hour If we wish to tackle this demographic shift, a four prong strategy is required that ropes in Insurance companies, tertiary care centers, Geriatric specialists and Pension regulators and forges a partnership between them. 1. Hybrid products that can tie up with tertiary care centers would definitely augur well for the elderly. 2. Also, pension regulators need to popularize NPS (New pension scheme) and set aside a corpus every year that would pay them a defined amount apart from the actual pension drawn by the elderly. 3. The role of geriatrics would move from curing the elderly to caring for them to enable a dignified living. As of now, geriatricians are a rare breed in India. Government must allot subsidy for doctors who wish to take up geriatrics. 4. Budget allocation on health (which stand woefully at 1-1.5%), along with tertiary care centers in villages would help alleviate this problem. 5. NHRM (National rural health mission) lists about 15 programmes. Would be great if they can include elderly care too Hope India wakes up to this challenge posed by demographic change and tackles it with vigor, determination and a sense of compassion for our elderly!!

About the author: Salar Mohamed Bijili is a Contributing Editor for TradeBriefs and an MBA graduate in Marketing from SIIB. He writes on economy, finance and Insurance. He can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
 

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