Page 65 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 6: Demographic Features and Indicators of Development

social implications. For instance, it creates pressure on the job market. As persons reaching retirement Notes
age remain fit to work, they seek extension of their jobs or fresh employment. Moreover, as the
elderly continue to live longer, the number of joint or multi-generational families tends to increase.
But we know that the average size of households has not increased significantly over the last five
decades and the total number of households has risen sharply for the period.
Age and Sex Composition : The consequence of past trends in fertility and mortality is reflected in
the age and sex composition. If high birth and death rates persist for a fairly long time it would result
in a bottom-heavy age pyramid. For India, the age distribution indicates that every one person, on an
average, has to earn for himself and for one dependent also. Here, the dependency ratio of the
population is about 64.07%. A high dependency ratio acts as a serious drag on production and
improvement of living standards of the population.

The difference between the birth rate and the death rate measures the growth rate of
population.

Literacy
A person may be called literate if he or she can read and write with understanding in any language.
In India, a substantial progress in literacy has been made during the 1951-2001.
At the same time, sex differentials in literacy rates are narrowing down. For instance, in 1951, the female
literacy rate as a percentage of male literacy rate was about 33 which has gone upto 71.40 in 2001.
6.2 Nature of the Population Problem in India

India has a large population and is densely populated. Moreover, since the 1950s, the growth rate of
population has been consistently high. It is due to persistence of high fertility and declining mortality.
Apart from this, persistence of high birth and death rate for fairly long time has resulted in a bottom-
heavy age pyramid; the dependency ratio in the economy has been very high. Further, the country
shows a rising masculinity with the proportion of women in the total population gradually falling.
The rural sector dominates the economy. Finally, about one-third of the total population is illiterate.
Effects on Economic Development : The fast growth of population in India has caused a number of
problems as given below :
1. Coale and Hoover’s Argument : Coale and Hoover say that the GNP per capita would be lower
under higher fertility than under lower fertility. Undoubtedly, per capita product in India is
lower than it would have been had population been growing more slowly, because of three
reasons given below :
• Due to the smaller number of workers, the amount of capital per worker would have been
greater.
• The labour force would have been little smaller in size in case the fertility had been lower
for a longer period. However, the number of people it had to support would have been
much smaller during the period.
• If the effect of diminishing returns in agriculture was equivalent to a lower average
productivity of capital, the capital itself would have been more productive.
2. Cassen’s Argument : According to R.H. Cassen, there are two main relationships through
which population growth affects the economy : savings effect and composition of investment
effect.
(a) Savings Effect : According to this, savings are reduced by population growth because of
the increase of burden of dependency. As all must consume while relatively fewer produce,
consumption per head rises and savings per head falls.

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