Fertility Decline: A Success Story or Cause for Concern?

India's declining fertility rates, once hailed as a success of family planning policies and socio-economic progress, are now the subject of renewed debate. Recent statements by the CMs of Andhra Pradesh and Tamil Nadu and the RSS chief underscore a pressing issue: the implications of India's declining fertility for economic growth and sustainability.

- BALHASAN ALI Researcher (demography and labour), Institute of Economic Growth

Despite achieving replacement-level fertility, India now faces the challenge of below-replacement fertility, which presents new socio-economic hurdles.

India's total fertility rate (TFR) fell to 2.0 in 2019-21, below the replacement threshold of 2.1. Urban areas report a TFR of 1.6, while rural areas remain at 2.1, with only five states—UP (2.3), Bihar (3.0), Jharkhand (2.3), Meghalaya (2.9), and Manipur (2.2)—exceeding this level. Equally important is the net reproduction rate (NRR), which for India is below 1. It suggests the total population will gradually decline as there aren't enough daughters being born to replace the current generation. Can India capitalize on this change for sustainable development, or does it signal an impending crisis?

India has long been seen as poised to benefit from a demographic dividend—a youthful working-age population that could drive economic growth. However, this is contingent on policies that translate a large working-age population into actual economic participation. India's persistently low labour force participation rates pose a significant challenge. So, can India fully harness its demographic dividend when a substantial portion of its population remains economically inactive or underemployed?