Why India needs a seriously tightened population policy to reduce poverty

India has been unable to address population growth meaningfully which has prevented it from reaching global average for decline in extreme poverty

Last month, I discussed China’s control of population growth rate that enabled it to dive below India — from the late 1960s — with a concomittant increase over India in its per capita GDP growth. Those differences continued, taking China to newer heights surpassing India during the following decades in all economic and socio-economic indicators (though not, of course, human rights, a matter I have occasionally addressed earlier).

Today’s Figure 1 asks to view GDP growth rate over population growth rate— GDP per capita in a different light — and examines its behaviour. In a fashion, this variable reflects the upward pull (or downward push) of GDP growth as population is controlled (or unattended). The visual impact is immediate: While India has had a slightly upward — little better than horizontal — trend in the five decades covering 1969-2017, China’s upward pull has been phenomenal until about 2010. After 2010, China’s trend declined, due to loosened population policy. Clearly, a deliberate and meaningful population policy would assist India to thrust upward its per capita GDP and growth.

Another population reflecting indicator is taken in Figure 2, that of the Extreme Poverty Headcount Ratio (EPHR) — per cent of population living below $1.90 per day, for 1980-20151.  In 1981, 89 per cent of Chinese were living below this mark, as opposed to 57 per cent Indians, the global average being 42 per cent. Brazil, at 21 per cent, was well better than the average. The drastic improvement of China — crossing India by 2000 — is phenomenal. By 2015, the EPHR indicators had changed to 13.4 per cent for India, 3.4 per cent for Brazil, and 0.7 per cent for China, the world average being 10 per cent. Thus India remained worse than global average while China’s EPHR almost disappeared. The reversal of trends was driven by China’s economic effort as much as its harnessing population growth.

Figure 3 amplifies cross-country headcount magnitudes under EPHR during 1981-2015. Globally, there were 1.9 billion extremely poor (EPHR) in 1981 which reduced to 736 million in 2015, or a reduction of 61 per cent in 35 years. China reduced it from 878 million to 10 million — a reduction of 99 per cent, and India from 409 million to 175 million — a reduction of 57 per cent, or below average reduction. Brazil reduced it from 36 million to 7 million — a reduction of 74 per cent, or above average. It is telling that, among the three, only India’s effort was below even the world average. What explains India’s inability to reach the global average in the decline of extreme poverty. The answer lies at least partially in its inability to address population growth meaningfully.

To bring light to reality, while improvement in economic conditions at the individual level would lead to lower birth rates, in reverse, lower birth rates should also contribute to economic prosperity and poverty reduction. There is increasing cross-country research evidence of this two-directional relationship. For example, East Asia and South East Asia — including Thailand, Indonesia and the countries of Indochina — experienced impressive declines in their fertility rates during the last 25 years. Steven Sinding has confirmed that their “decline in poverty and improvement in living standards are attributable at least in part to (their) very successful fertility reduction policies”2 . Evidence proferred by other social scientists is appearing from Africa as well. Clearly, countries that are Rip Van Winkles should address their lack of population strategy verily.

India’s break from poverty could occur only through significantly deeper reductions in fertility buttressed by economic policies that are growth, not just subsidy, oriented. Commensurately, the ongoing Finance Commission should include population growth rate as a negative criterion for Centre-state revenue sharing. For the 2019 parliamentary elections, party manifestos should include explicit population policies to reduce the fertility rate including through a mix of incentives and disincentives. Or, do we just wring our hands at more babies being born into slavery?3  
 

1. Thus EPHR is income based. It yields numbers lower than Multi-dimensional Poverty or Severe Multi-dimensional Poverty indices that I used in my column dated 13 November, 2018. The difference reflects their inclusion of more dimensions, than income alone, of poverty.  2. S. Sinding, “Population, poverty and economic development,” Philosophical Transactions of The Royal Society, 2009, No. 364, pp. 3023-3030. 3. See my column dated 13 November 2018.