The silver solvers: How Kerala is tackling the ageing population challenge

Kerala is attempting to tackle the fallout of a very southern trend: A growing elderly population. Others may want to take note

Kerala is often dubbed as the ‘Japan of India’, thanks to shared characteristics like low fertility rates, high life expectancy, an ageing population, high literacy, and strong public health outcomes. As Kerala grows old, the southern state is attempting a social redesign based on the Japanese model. 

In May, just two days after it took charge, the new Congress-led government established India’s first dedicated Elderly Welfare Department, modelled on Japan’s long-term care system, including its Long-Term Care Insurance (LTCI) programme.  

It also established a quasi-judicial Senior Citizens Commission meant to protect the rights and welfare of elderly people, with 20.7 per cent of the population above 60 years, compared with a national average of 12.9 per cent. 

This is not just a Kerala phenomenon — the entire southern region, which leads the country in many development indicators, may well be witnessing a rapid rise of the silver generation. Across the world, health and education are strongly associated with people living longer and healthier productive lives.  

According to the latest National Family Health Survey (NFHS), the proportion of the elderly (defined as over 60 for both men and women) is 16.3 per cent in Tamil Nadu, 14.6 per cent in Karnataka, 14.1 per cent in Telangana and 13.9 per cent in Andhra Pradesh. It is 14.4 per cent in Maharashtra and 17.2 per cent in nearby Goa — two other relatively developed states.  

“Kerala is entering a phase where ageing has become a major governance issue involving dignity, healthcare, mobility, safety, and social justice,” said Kerala Chief Minister V D Satheesan, launching the department. According to a Reserve Bank of India (RBI) report, the state may see 22 per cent of its population above 60 years by 2036. 

Neighbouring Tamil Nadu, meanwhile, came out with a white paper on its economy last month saying it has the fastest-growing elderly population among major states, projected to rise at a rate of 71.7 per cent between 2011 and 2031, followed by Kerala (64.6 per cent), and Karnataka (56.3 per cent), versus a national rate of 56 per cent. 

“Ageing of the population may well be a reality for the rest of India too. The national average is expected to cross 20 per cent by 2050, while South India may be growing at a much faster rate, well above this mark. We have to create an ecosystem by that time for the elderly population,” said G Srinivasan, founder and chief executive officer of Athulya Senior Care, India’s largest assisted living provider. 

Clouds on the horizon 

A rising elderly population by itself should not be a problem. What is a potential cause for worry is that this is happening alongside falling birth rates — faster in southern India than anywhere else in the country. This means a shrinking base of people in jobs and tax collections.  

This could crimp the room to spend in states that are already burdened with rising debt: In FY26, Tamil Nadu had a debt of ₹13.8 trillion, Kerala ₹5.07 trillion, and Karnataka ₹8.14 trillion. 

The average median age in Kerala is already 37 years, while Tamil Nadu is over 34 years, and Karnataka around 32, versus a national average of around 29 years.  

“This transition, while a development achievement, has a fiscal corollary: the dependency ratio is rising, the working-age share of the population is declining, and the window during which a favourable demographic structure can support economic growth and revenue mobilisation is closing,” said the Tamil Nadu white paper.  

It estimates that by 2100, approximately half of Tamil Nadu’s population will be elderly, compared with around 27 per cent for India. 

A dip in the working-age population also means a reduction in income tax, consumption tax, and other economic activity-linked tax revenue, even as social security spending – on healthcare, pensions, social security, and elderly-related welfare 

for instance – hits the roof. 

Take the case of Kerala: Around 80 per cent of what the state earns goes into salaries, pensions, retirement benefits, and interest payments. A further rise in the elderly population may bring about serious fiscal concerns for the state, which already has an outstanding debt of 35.5 per cent of its GSDP.  

Silver lining  

In districts like Pathanamthitta, Kottayam, and Alappuzha of Kerala, a large number of homes are occupied by elderly couples. But many sole occupants are widows, living isolated lives and facing emotional and economic challenges. 

To address this growing concern, the state has already lined up plans for a long-term social intervention rather than introducing more welfare schemes.  

To be sure, the state is already known for its hefty schemes in preventive healthcare, free medical treatment, residential care, and support for bedridden elderly people. It became the first state to present a dedicated Elderly Budget in 2026-27, setting aside ₹46,236 crore for senior citizens’ welfare initiatives, which is around 19 per cent of the total budget outlay. 

But the Japanese model is slightly different. While shifting from a welfare-centric approach to an ‘active ageing’  strategy, Japan created ‘silver industries’ in sectors such as assisted living, home healthcare, mobility devices, travel packages for seniors, financial planning and insurance, and nutrition and wellness products, which created a new wave in the economy. 

“We should look at the elderly in a different way, through the eyes of the second demographic dividend, which is happening in Japan. It is similar to the youth dividend. We should look at new industries, and also at developing new skill sets. A large section of people above 60 years are productive,” said S Irudaya Rajan, a demography and migration expert.  

For instance, in the UK, which also has an even older insurance-based welfare model that has been copied around the world, the official retirement age has been consistently pushed back over the years.  

In the private sector it is common for people to be working well into their seventies. 

Rajan said that because of population control measures, at least one-third of Indian districts are below the replacement level of population, with couples going in for a single child. As per the RBI report, the working population in Kerala may dip to 59.5 per cent in the next 10 years from around 63 per cent now, versus a national average that will actually go up from 64.8 per cent now to 64.9 per cent by 2036. 

The looming crisis has prompted Andhra Pradesh Chief Minister N Chandrababu Naidu to announce a one-time incentive of ₹30,000 for the third child and ₹40,000 for the fourth. In fact, there have been informal proposals in Kerala for a ‘skill bank’ of the elderly, so that the over-60s can contribute through mentoring programmes and during emergency situations. 

And there is of course immigration – something the southern states have long benefited from.  

“The advantage with India is that we have states like Uttar Pradesh, Rajasthan, Chhattisgarh, and Bihar, where the average age is much less. The South Indian states, where the per capita income is higher, can tap these human resources going ahead,” said Aditya Narayan Mishra, managing director and chief executive officer of CIEL HR. 

Based on the National Family Health Survey for 2023-34, the population above 60 is 10.3 per cent in Uttar Pradesh, 11.5 per cent in Bihar, around 11.4 per cent in Chhattisgarh, around 11.5 per cent in Jharkhand, 11.6 per cent in Madhya Pradesh, and 12.1 per cent in Rajasthan, much below the national average. 

This may well be one advantage for a diverse India, as North India may well end up providing the lion's share of skilled and unskilled manpower to the booming economies of South India.  

Equally, other states following the Kerala development model may want to take note of its experience.