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Introduction

India is undergoing a rapid yet uneven demographic transition. While the nation currently celebrates its “youth bulge,” the elderly population (60+) is projected to nearly double from 149 million in 2024 to 230 million by 2036. This shift creates a “demographic winter” where a shrinking workforce must support a burgeoning silver population, posing unique fiscal and social challenges to India’s development trajectory.

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Fiscal Implications of an Ageing Population

The economic burden is intensifying as the old-age dependency ratio rises, especially in states that successfully tamed population growth.

• Rising Pension Liabilities: Ageing states are seeing pensions “crowd out” developmental spending.
  Eg: In Kerala, pension spending accounts for 17% of revenue expenditure, nearly double the national average of 11.3%.
• Eroding Tax Base: A shrinking working-age population leads to stagnant or declining income tax and GST revenues.
• Healthcare Inflation: Geriatric care is significantly more expensive than pediatric or maternal care due to the prevalence of non-communicable diseases (NCDs).
  Eg: Medical inflation in India is outpacing general inflation, making the cost of elderly care unsustainable for middle-income families.
• Inter-State Devolution Stress: Southern states face a “double whammy”—higher age-related costs but potentially lower Central tax devolution due to population-based Finance Commission formulas.

Social Implications of an Ageing Population

The demographic shift is altering the fundamental fabric of Indian society, often leaving the most vulnerable behind.

• Feminization of Ageing: Women live longer than men but often lack financial assets or formal pensions, leading to extreme dependency.
  Eg: About 54% of elderly women in India are widows, many of whom face social isolation and poverty.
• Collapse of Informal Safety Nets: Migration and the rise of nuclear families have eroded the traditional joint-family support system.
• The “Care Gap”: There is a critical shortage of trained geriatric professionals, leaving families to rely on ad-hoc, unskilled domestic help.
• Mental Health Crisis: Loneliness and depression are rising among the urban elderly, exacerbated by a “digital divide” that limits their access to modern services.

Comprehensive Measures for the Care Economy

To address these costs without undermining social security, India must adopt a multi-pronged “Silver Economy” strategy.

• Infrastructure Status for Senior Care: Granting infrastructure status would attract affordable, long-term funding for assisted living facilities.
• Expansion of AB-PMJAY: Universal health coverage should be lowered from 70 to 60 years with a subsidy-based model for those just above the poverty line.
• Portable Social Security: Developing a National Migration Policy to ensure that pension and health benefits remain portable across state lines for migrant workers and their parents.
• Formalizing Care Work: Recognize caregiving as a “skilled profession” and provide large-scale geriatric training to ASHA and Anganwadi workers to bridge the care gap.
• Unlocking Property Wealth: Strengthening Reverse Mortgage norms would allow seniors to unlock up to 80% of their property value for their own care.
• Inclusive Industrial Policy: Shift focus toward labor-intensive sectors and the “Care Economy” to create jobs that can support the fiscal needs of an ageing state.

Conclusion

The demographic transition cannot be managed by fiscal changes alone. India must act now to build public-funded geriatric infrastructure and universal social pensions. Waiting for states to “get rich” before they “get old” is no longer an option; the focus must shift from a “youth-only” dividend to a dignified silver economy that values the contributions and rights of its elderly citizens.

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