Birth incentives and bad economics: The flaws in Andhra's demographic plan

The policy runs the risk of creating adverse outcomes. First concerns the quality of human capital. Given that India's and Andhra Pradesh's falling TFR is the result of improved education and incomes

Andhra Pradesh has become the first state to announce a population-management policy to encourage families to have more children. The state plans to reverse the age-old “Hum Do, Hamare Do” family-planning campaign, which helped reduce the national total fertility rate (TFR) to about 2 from 3.2 in 2000, by offering an incentive of ₹25,000 to couples that have a second or third child and subsidising in vitro fertilisation (IVF) treatment. This payout is driven by anxieties that the state’s TFR has fallen to 1.5, significantly below the replacement level of 2.1. The apprehension is that decelerating population growth could impact the state’s representation in Parliament ahead of a potential delimitation exercise as well as its access to funding under Finance Commission allocations linked to each state’s population. These are not invalid concerns, and the progressive southern states have all expressed similar reservations. However, this approach is inappropriate. 

For one, it reflects narrow ethnocentricity, which is out of sync with a country as integrated as India. This assumption would make implementing the policy problematic. If “identity” is defined by geographical boundaries, then Andhra Pradesh has significant cohorts of settlers from other parts of India. Would a Punjabi or Bengali domiciled in the state for decades be eligible for the subsidy? Though not explicitly stated, the policy undoubtedly aims to boost the Telugu population. However, large numbers of Telugu people inhabit other states, with Telangana, Karnataka, Tamil Nadu, and Maharashtra being the most prominent. Would the policy address their concerns? The nativist focus of the policy, a grim emulation of practices increasingly followed in the United States and Europe, sets a poor precedent for states with similar TFR records. It overlooks the fact that as part of India, the state can augment talent and skills from anywhere in the country. Migration has been the backbone of economic growth. The country’s most dynamic cities — Kolkata in the past, or Mumbai, Bengaluru, Gurugram, or Hyderabad today — are the most cosmopolitan, having been built on the toils of blue- and white-collar migrants. 

The policy also runs the risk of creating adverse outcomes. The first concerns the quality of human capital. Given that India’s and Andhra Pradesh’s falling TFR is the result of improved education and incomes, most of the subsidy could well be accessed by poorer families with less wherewithal to sustain larger families. The state has recognised this issue with generous add-ons, such as a ₹1,000 monthly nutrition support for the third child up to five years and free education in government institutions for the second and third child up to the age of 18 years. But these in no way cover the full cost of raising a child in optimum conditions. So far, no country that has offered similar incentives has managed to reverse falling TFRs. The second perverse consequence concerns women’s rights. Falling TFRs typically reflect improvement in women’s education and, to an extent, their growing agency within society. Smaller families reduce the childcare burden for women and enable them to explore opportunities in education or professional careers. This is no small achievement. In a patriarchal country like India, offering incentives to have more children could narrow women’s freedom of choice and reverse decades of hard-won social progress.