A State Bank of India report says this will put pressure on these states’ infrastructure, and widen income distribution gap between the south and north.

New Delhi: India’s southern states need to brace for an increase in its old age population in the next three decades.

A research report released Tuesday by the State Bank of India predicts that people above 65 years of age are expected to exceed 20 per cent of the total population of these states by 2050. Overall, more than 178 crore Indians will be above the age of 65 by 2050, the report estimates.

The projected figure is 30 per cent for Andhra Pradesh and Telangana combined, 25 per cent for Kerala, 24.6 per cent for Karnataka and 20.8 per cent for Tamil Nadu.

An increase in the old-age population will encourage migration of young labour force from the northern and eastern states to these southern states. This trend of rising migration will put pressure on the existing social and physical infrastructure of these states.

The phenomenon is also expected to widen the existing income distribution gap between the more prosperous southern states and the northern states, the report points out. The per capita income of the southern states is already substantially higher compared to their northern counterparts. With population growth levels moderating in southern states, the per capita income gap is likely to further widen.

The other states whose old age population is expected to be above the all-India average of 15.1 per cent are Himachal Pradesh (17.9), Maharashtra (17.4), West Bengal (17) and Odisha (16.5).

Lower population growth

The reason for this rise in the share of old people in the population is that the southern states have successfully managed to bring down their population growth rates.

States like Bihar, Chhattisgarh and Jharkhand have the highest decadal (2000-2011) population growth rates at 25.1, 22.6 and 22.3 per cent respectively, according to the 2011 census. In comparison, southern states like (undivided) Andhra Pradesh have the lowest decadal population growth rate of 11.1 per cent.

But these lower population growth rates have caused problems on other fronts.

The 15^th Finance Commission chaired by N.K. Singh has been asked to use the population data of 2011 rather than 1971 while deciding on the states’ shares in central taxes. But the southern states are worried that the lower population levels will adversely affect their share from devolution of central taxes, thus disrupting state finances.

The SBI report also says that in the long term, an increase in the old age population could adversely impact savings rates in the states.

“As people turn older in the selected states, the savings might initially see a bulge as people start ageing and then should start declining with people living more on old age pensions and increasing health expenses,” it says.

“Such decline in savings could result in muted impact on state domestic product in such states as India’s population is expected to decline meaningfully over the next decades.”

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