The Indian government has stated in a study that its population is going to start to age and it needs to raise the retirement age to prepare for an increasing number of elderly people.
While India should benefit from the so-called “demographic dividend” over the next decade as its working population is set to increase by about 9.7 million a year between 2021-31, however that advance will quickly wither away as the nation’s fertility rate plunges below replacement level.
The findings in the study, “India’s Demography at 2040: Planning Public Good Provision for the 21st Century,” will have major implications for many companies, especially those that have been targeting consumer demand from India’s young population.
It also said that policymakers need to prepare for an increasing number of elderly people, projecting that there will be 239.4 million Indians over the age of 60 in 2041 against 104.2 million in 2011.
The study, which was authored by India’s Chief Economic Adviser Krishnamurthy Subramanian and his team of economists concluded, “This will need investments in health care as well as a plan for increasing the retirement age in a phased manner.”
Currently, the retirement age for most government workers in India is 60.
The study also noted that the number of children in the 5-14 age bracket will decline significantly, leading to the need for school mergers and less focus on building new ones. It quoted that already states such as Himachal Pradesh, Uttarakhand, Andhra Pradesh, and Madhya Pradesh have fewer than 50 students enrolled in more than 40 percent of their elementary schools.
Meanwhile, the number of Indians aged between 0-19 has already started to decline and the proportion of the population in that age group is projected to fall to 25 percent by 2041 from 41 percent in 2011.
The study which was included in the government’s Economic Survey clearly points out that companies will have to start giving serious thought to raising the retirement age. It again draws notice to the debate-should there be retirement age in companies?
Read our coverage before on the same issue.