Thomas White Global Investing
India Stamp
September 10, 2010
A Postcard from the Asia Pacific
India: Government Launches New Program to Control Growing Population

Rural Indian children laughing

India’s population growth rate of 1.38% annually is alarming the Indian government.

It is one of India’s biggest assets : a one billion plus population that provides a growing economy with a seemingly inexhaustible and youthful labor force. It is also one of India’s biggest problems – burdening and straining the nation’s resources. Knowing that India is poised to overtake China as the world’s most populated nation in the next few decades, the Indian government is trying desperate measures to keep the lid on an issue that could cause headaches to policymakers in the years to come.

China’s heavily criticized one-child policy is well known, and has contributed to a rapidly aging population concern. And in a democracy, India knows that it cannot possibly use the same approach. It has instead in the past, tried to cajole, coerce, educate and motivate its citizens with slogans such as “We Two, Ours One.” Now, a country that ranks 84 in Transparency International’s 2009 Corruption Index is trying a familiar method: bribing. Or rather, providing couples with a monetary incentive if they decide to postpone plans for a child for at least two years after marriage. The government is offering Rs5000 or $106, a significant sum in India’s rural areas, if they agree to its rules. Dubbed ‘honeymoon packages,’ the program was first launched in Satara, Maharashtra, a state in Western India, with already more than 2000 couples reported to have enrolled for the program, according to The New York Times.

Socially, the Maharashtra government knows that it is battling a cultural behemoth that encourages men and women to marry early and start families as soon as possible. Yet, it is a behemoth that must be tackled. The country is already lagging well behind its Millennium Development Goals, an initiative which calls for reducing the country’s birth rate by 2015. Although improvements have been made over the past few decades in accelerating birth control programs, it is still a staggering and sobering fact that the Population Reference Bureau projects India’s population to cross two billion by the end of the 21st century. To put that in a different perspective, India is adding the population of Australia every year and is expected to be the largest contributor to world population growth by 2050. Currently, India averages around 2.6 children per family, well above the 2.1 rate that is required to stabilize the population.

Past monetary incentives, including an aggressive sterilization drive by the Indira Gandhi government in the 1970s, were disastrous failures. These schemes were dogged by corruption and allegations of abuse by overzealous officers who tried to meet high targets through forced sterilizations and vasectomies. It is against this backdrop that Satara must be viewed. If successful, a district that boasts of an average literacy rate of 80% (well above the national average of 59%) stands to be a model project for the rest of India. For a country whose overcrowded cities are bursting at the seams, Satara will be keenly watched henceforth.

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