India, accounting for nearly 18 per cent of the world population has been experiencing slow but steady demographic transition since the second half of the last century. In recent years, however, the fertility transition in India has accelerated resulting in rapid changes in the age structure of the population. This change creates unique opportunities along with significant challenges both for the economy and society. The age structure change is expected to create demographic dividend initially and ageing of population later. With wide variation in the demographic transition across states in the country, the demographic dividend and ageing is also likely to vary significantly across states in India.
The provisional population result from 2011 census provides some useful information on the pace of demographic change taking place in the country. Although provisional data do not provide age composition of the population, the available population totals and the proportion of child population in the age group 0-6 helps us to understand the emerging demographic change and the plausible age structure transition in the country. What follows is an analysis of the available data from the 2011 census to understand the emerging age structure changes in India.
The Changing Demographic Profile of India
The 2011 census result brings out some interesting patterns of change in the distribution of 0-6 age group population in relation to the overall population in the country. The proportion of the population in the age group 0-6 declined from 16 per cent to 13 per cent over period 2001-11, growth rate being negative for the first time.
Growth Rate of 0-6 Age Group Population in India, 1981-91 to 2001-11
YearAnnual Growth Rate (in Per Cent)

One of the important dimensions of demographic change in India is the extreme inter-state variation. Of the total 20 major states, nearly 11 have achieved replacement level fertility while other 4 are around replacement level. On the country, there are around six major states far away from replacement level fertility. The fertility variation in the country is astounding. The total Fertility Rate (TFR) varies from 1.7 children per woman in Tamil Nadu to 3.9 children per women in Bihar in the year 2008 (Sample Registration System data 2009). The 2011 census result also provides information on the proportion of population in the 0-6 age group in each state. The variation clearly indicates that the age structure of the Indian population will vastly be different across states. 
 The proportion of population in the age 0-6 age group is a good measure of demographic and age structure change of a state. Those states having less than 12 per cent of their population in the age group 0-6, fall among the below replacement level fertility states. These states will have an age distribution with a considerable bulge in the adult age groups of 15-59. States having around 13-15 per cent of their population in the age group 0-6, are moving towards an age structure transition. On the contrary, those states with more than 15 per cent of the population in the 0-6 age group are in the early stages of demographic change and will have an age distribution typically of a triangle shape indicating higher percentage of child population in relation to adult population.
Undoubtedly, India’s age structure is undergoing rapid changes. It will have definite implications for the economy and society. The age structure transition typically has two phases. In the first phase of the transition, there will be a bulge in the working age group popularly known as the demographic dividend stage. The demographic divided is a shorter duration in the history of any nation. The span of the dividend varies according to the pace of the fertility transition. The second phase of age structure transition occurs with the ageing of the population. The proportion of elderly is likely to go up at this stage.
The Demographic Dividend in India
Demographic dividend refers to a change in the age distribution of population from child ages to adult ages. It leads to larger proportion of population in the working age group compared to younger and old age groups. Apparently, given the diversity in the fertility transition in India, the demographic dividend is likely to continue as it shifts from one state to another based on the pace of demographic changes in the respective states. It is generally argued that the demographic change in India is opening up new economic opportunities. There is generally high optimism both based on the experience of many other countries and form India that demographic changes will take the country to newer economic heights.
Along with high optimism, there are also larger concerns on the ability of the nation to take full advantage of the demographic dividend. It is often argued that demographic dividend might turn into a nightmare given the composition of the Indian population in terms of educational level and skill levels. It is argued that large segments of adult population in the country are illiterate and do not have the capacity to contribute substantially to the modern economy.
Perhaps, demographic dividend needs to be understood more critically and in a proper perspective. Many of the good empirical studies estimating the impact of age structure changes on the economic progress have indicated very high impact of age structure change and positive demographic dividend in the country. In other words, these studies bring out clearly that those states moving faster in demographic and age structure change are also experiencing rapid economic growth. The best examples come from southern and western states in India where the demographic changes are also leading to sustained economic changes both in the aggregate economy and in the lives of people.
The 2011 census results show that there has been significant inflow of migration to many southern states in India. Tamil Nadu, Karnataka and Andhra Pradesh are attracting huge inflow of migrants from other states. In these states, the enumerated population has been far higher than the projected population. Perhaps, it points towards a replacement migration taking place into these states. The replacement migration refers to migration occurring as a result of age structure changes. With the demographic and age structure changes, there will be scarcity of labour particularly in the unskilled sector. This labour has to be replaced from other places with abundance of labour due to lack of any significant demographic changes. In the context of Western countries, the replacement migration mainly came from poor developing countries. On the contrary, India is able to take care of the replacement migration from within due to large diversity in the nature of demographic transition. The replacement migration into Kerala is well known and many studies have pointed out large inflow of such migrants from other parts of the country.
Thus it is clear that the demographic changes create demographic opportunities and dividend and the concern that India may not be able to experience demographic dividend is perhaps not empirically validated. There is also ample evidence to suggest that demographic changes enhance economic changes. Micro level evidence also suggest that age structure changes lead to substantial investment in children both in terms of education and health. Thus the demographic dividend emanates from rapid changes in fertility which has several positive impacts both at macro and at household level.
Demographic Change and Ageing
As already pointed out, the demographic dividend is of a shorter duration for any country and eventually the nation will move into an ageing population. Although not immediate, change in the age structure from young to old are also accompanied by several social changes with considerable implications on any nation. The size of the Indian elderly (60 years and above) is expected to triple in the next four decades from 92 million to 316 million, constituting around 20 per cent of the population by the middle of the century. 
There is no significant empirical evidence to suggest that larger proportion of elderly population would impede the economic progress of a nation. At the same time, there are many social changes expected as a result of ageing population in any nation. The major challenge would be on the care for the elderly. Demographic and economic changes are often accompanied by enhanced migration of people in search of better and quality employment. As a result of this adult migration, the elderly are often left behind. The living arrangement pattern of the elderly are expected to undergo rapid changes during this period. Such changes are already visible in states like Kerala with early demographic transition.  
Even though the proportion of elderly at the national level has been low, the Ministry of Social Justice and Empowerment (MOSJE), Government of India deserves recognition for its foresight in drafting a National Policy on Older Persons (NPOP) as early as in 1991, when less than 7 per cent of the population was aged 60 and above. The policy vision statement is well articulated and action strategies cover important aspects of financial security, health, shelter, education, welfare and protection of life and property.
The major lacuna of the NPOP, however, has been lack of clear prioritization (increasing old-older proportion, feminization and ruralisation along with inter-state variation). Although many important aspects of ageing policy are mentioned in the NPOP, it is unclear what the specific goals are, what steps are envisaged towards achieving these goals, and how it fits into a realistic implementation schedule given the emerging demographic scenario in the country and the current institutional arrangements.
India is soon to follow the foot-steps of China and is likely to surpass Chinese population to become the country with the largest population in the world between 2025 and 2030. China through policy action has been pushing forward healthy sustainable development of undertakings for its ageing population. The government has attached importance to publicizing and popularizing laws, regulations and policies concerning senior citizens. It has set up an inter-agency/inter-ministerial committee on ageing to monitor and implement policies and programs for older people.
As the socio-economic processes associated with ageing are complex, the country needs to plan and gear up well in advance to face the challenge. Sudden intervention may not be appropriate and may not provide significant dividend. Many countries have realized the importance of preparing for the ageing in advance through several policy and programmatic intervention. Perhaps, India too, needs to follow the footsteps of these nations at the earliest to minimize the ill effects of a larger social change.
In a nutshell, demographic and age structure changes are inevitable and generally contribute positively to the nation. The demographic changes are also accompanied by considerable social and economic changes. It is important that the nation is prepared to take care of such rapid changes. In the future, the success of a nation will critically depend upon its ability to address such sweeping demographic changes effectively though policies and programmes. India is on the course of rapid demographic changes. Hence preparedness in advance might provide dividends in the future.

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