Population Growth and Economic Development

The following points highlight the nine main reasons for population growth as a retarding factor of economic development. Some of the reasons are: 1. Population and Per capita Income 2. Population and Supply of Food 3. Burden of High Proportion of Unproductive Consumers 4. Population and Unemployment 5. Population and Burden of Education, Housing and Medical Care and Others.

Reason # 1. Population and Per Capita Income:

Population has got its impact on the growth of per capita income in a country. In India rapidly rising population is working as a retarding factor in raising its per capita income. During the period from 1960-61 to 1988-89 although the net national product at factor cost (at 1980-81 prices) increased by 184 per cent but due to increase in the size of population by 80 per cent, the per capita NNP increased by only 54 per cent.

During this period, although the annual average growth rate of national income in India was estimated at 3.8 per cent but the annual average growth rate in respect of per capita income was only 1.6 per cent. Thus the high rate of growth of population in India is acting as a retarding factor in the path of its increasing level of per capita income.

Reason # 2. Population and Supply of Food:

Rapidly growing population in a country can create serious food crisis leading to a huge import of food grains from foreign countries and a consequent loss of precious foreign exchange which would have been used otherwise for development purpose. Due to high rate of growth of population in India, the per capita cultivated area declined from 1.11 acres in 1921 to 0.35 acres in 2011 showing a fall of 68 per cent.

In view of this declining trend in land-man ratio, steps should be taken for raising its productivity, In India, the net availability of food grains rose from 63 million tonnes in 1956 to 264 million tonnes in 2014 showing an increase of 419 per cent.

But due to 305 per cent increase in the size of population, i.e., from 39.7 crore in 1956 to 121 crore in 2011 the per capita domestic availability of food grains increased marginally by only 7.4 per cent, i.e., from 431 grams in 1956 to 463 grams in 2011.

Moreover, as major portion of the increase in population is recorded in rural areas thus it enhances the family consumption of food leading to a reduction in its marketable surplus.

Reason # 3. Burden of High Proportion of Unproductive Consumers:

A high birth rate contributes towards only high proportion of unproductive population without making any contribution to the production system and enhances the dependency ratio of non-workers to workers. Unproductive consumers include children, old persons and those voluntarily unemployed persons in 15-59 age groups.

During the period 1961-81, the ratio of working to non-working population in India has deteriorated from 43: 57 per cent in 1961 to 39.3: 60.7 per cent in 2011. During 1981-91, although the ratio remained the same but in absolute terms the number of non-working population in India has increased from 464 million to 529 million and in 2011 it further rose to 476 million.

Reason # 4. Population and Unemployment:

Rapidly rising population is aggravating the unemployment problem in the country creating large scale unemployment in the urban areas as well as a huge extent of disguised unemployment in the rural areas. At the end of each Five Year Plan the backlog of unemployment in India is increasing as the volume of employment generated could not match this additional number of labour included in work force.

As per the document of the Sixth Plan (1980-85), total number of unemployed was 20.7 million in 1980 which represents 7.74 per cent of total labour force. But the Tenth Plan (2002-07) has estimated the total backlog of unemployment as 34.7 million in 2005.

Thus a huge proportion of our national resources have been constantly used for the generation of employment opportunities so as to clear the backlog of unemployment arising from rapidly rising population.

Reason # 5. Population and Burden of Education, Housing and Medical Care:

Rapidly rising population increases the number of children in the school going age and also raises the enrolment of students in College and University education. All these increase the expenditure on education. This is a type of situation we are facing in India. Expenditure on education is an investment in men for raising the productivity of labour force but in between there is a huge time lag.

In 1981, total population in the age group of 6-14 years was 156 million and the expenditure per pupil being Rs 144 per year, increase in expenditure on education can be estimated at Rs 2,246 crore per year. In addition to this if we add the increasing burden of university education then this increasing burden of expenditure would be much higher.

Moreover, this rising population in India is also increasing the burden of enhanced expenditure on medical care, public health and housing accommodation. The population explosion coupled with a lack of proper health services has brought the country to the verge of a losing battle against various diseases like malaria and tuberculosis.

Prof. CAK Yesudin of the Tata Institute of Social Sciences said that about 8000 people in the age group of 35-45 years die every year due to tuberculosis in metro cities.

Reason # 6. Population and Reduction in Capacity to Save and Invest:

A fast growing population reduces the nation’s capacity to save and invest. In a large family, the ‘burden of dependency’ is much higher which in turn reduces its savings capacity. An investigation on this issue has already confirmed that in addition to other variable which determines savings proportions, the ‘burden of dependency’ is considered as an important factor responsible for high differences in saving ratios among the various countries of the world.

Thus the rapidly rising population reduces the capacity as well as the rate of savings and investment in a country which always goes against this strategy of development.

Reason # 7. Population and Capital Formation:

In order to match the rate of growth of population with that of national income, increasing volume of capital investment is required. In India, the capital-output ratio being 5.5, for raising the national income at the rate of 2.2 per cent (which is equal to the rate of growth of population) capital accumulation at the rate of 12 per cent (5.5 x 2.2) is very much essential.

Mr. Zaidan of the London School of Economics through his detailed study observed that for maintaining the per capita income at a constant level, the developed countries have been devoting 25 per cent of their total investment which accounts to nearly 5 per cent of their G.N.P.

Whereas the less developed countries like India, Brazil, Morocco, Columbia, Ghana etc. are devoting about 65 per cent of their total investment which accounts to more than 10 per cent of their G.N.P. Under such a situation, a meagre amount of resources are left for improving the level of living of the general masses.

In this connection, an important observation was made in the Third Plan documents, “In an underdeveloped economy with very little capital per person, a high rate of population growth makes it even more difficult to set up the rate of saving which, in turn largely determines the possibility of achieving higher productivity and incomes. Moreover, for a given investment, a large proportion will need to be devoted to the production of essential consumer goods at the expenses of investment goods industries thereby still further slowing down the potential rate of growth.”

Reason # 8. Waste of Human Resources:

High birth rate is the result of frequent maternity which disable frequently a large number of women for a long period from participating in productive activity. This is a kind of wastage of human resources which acts as a drag on the path of economic development in a country.

Reason # 9. Low Efficiency:

High rate of growth of population in India is associated with the problems like low level of per capita income and low standard of living. All these reduce the efficiency of labour which, in turn lowers their productivity and hampers the pace of economic development of the country as well.

Thus from the foregoing analysis, we can observe that high rate of growth of population is working as a serious retarding factor in the path of economic development and thus reduced the pace of economic development of the country. Higher fertility rate has resulted in various economic problems.

As Stephen-Enke observed, “Higher fertility rates tend to limit what less developed countries can export and in addition make them less creditworthy as international borrowers.”

Under such a situation, the prospects for successful economic development are closely related to population trends of the country. Enke Stephen also observed that, “all economic demographic growth models indicate that a gradual lowering of fertility over several decades raises income per head, substantially.” Thus to face this challenge of high rate of growth of population in India immediate steps must be taken both to reduce the fertility rate and to enlarge the productive capacities of the country.