Tag Archives | states

The Age of India

Census of India released its year-wise age data from 2011 last Friday. Data is available for India and all states. The Transition State takes a look at how India and its states have been ageing.

The median age of India in 2011 was a young 24 years, with the median age ranging from 19 years in Meghalaya, 20 in Bihar and UP to 31 years in Kerala. This is good news for India as even it’s most aged state is still younger than China or the United States. Below is a map of median ages of individual states.

Median Age in India 2011

Median Age in India, 2011. Map made using Gramener’s free mapping tool.

What the above spread of values also shows is that India’s youngest states could be as much as 25 years behind its most aged states in terms of their demographic profiles. In theory, this gives states a good amount of time to learn from each other’s employment and economic policies to do their best in taking advantage of the upcoming ‘demographic dividend’.

Plenty has been said about the idea of a demographic dividend that India needs to take advantage of. I will just reprint an excerpt from a good article by Kaushik Basu several years ago on the subject:

In the year 2004 India had a population of 1,080 million, of whom 672 million people were in the age-group 15 to 64 years. This is usually treated as the “working age population”. Since outside of this age group very few people work, it is reasonable to think of the remainder, that is, 408 million people, as the “dependent population”.

A nation’s “dependency ratio” is the ratio of the dependent population to the working-age population. In the case of India this turns out to be 0.6.

What is different about India is the prediction that it will see a sharp decline in this ratio over the next 30 years or so. This is what constitutes the demographic dividend for India. [Kaushik Basu, BBC]

If we plot the working age population (anyone between the ages of 15 and 64) versus the median age, what we get is a tight correlation between the two. This implies that most Indian states are yet to reach their maximum working age population ratios. The possible exception to this might be Kerala, which might have already peaked.

Median Age and Working Age Population

The age structure profiles of Bihar, India and Kerala also illustrate the different stages of demographic development India’s states are: from a very young, bulging child population in Bihar to a more youth/young-adult heavy national population, to a far older population in Kerala.

India Age Structures 2011

If you were wondering what those spikes in the above graphs were, it pays to remember that the Census records reported ages and not actual ages. Ordinarily, such age structures must be quite smooth if accurate – there is no cause for spikes unless for some strange reason people decided to have a lot more kids in a particular year. Usually one member of a household (who is at home) is asked to provide the age of everyone in that household – and predictably, certain numbers get rounded up.

The graph below shows you that people round up ages to numbers 10, 12,18, 20 and every subsequent multiple of five. Curiously enough, the mis-reporting of ages is much lower in Kerala than the rest – showing that the state’s higher literacy has at least resulted in people knowing the age of their immediate relatives a lot better.

Reported Age 2011

PS. Do not miss the slides of Dr. Mukul Asher’s keynote ‘Preparing for an Ageing India‘, which he gave at the IIMB CPP conference a few years ago. Data used in this post can be accessed here.

Addendum. Census of India also released their own presentation on the age data on their website today. However, many of the numbers that they have put up (like % people in working age population) do not match up with what can be calculated from the raw data. (Hat-tip to Rukmini Srinivasan for directing me to it.)

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The Centralisation of Public Expenditure

The Ministry of Finance released the Indian Public Finance Statistics 2012-13 earlier today on their website. Drafted by a team under the direction of the Chief Economic Advisor to the Finmin (currently the RBI Governor Raghuram Rajan), the statistics are of very high value as they are a collation of union and state government expenditures and revenues from the past several years.

When we hear the union budget every March, we get only a partial picture of what is planned for India in the coming year, as states play a significant role in allocating public resources.

Today I take a quick look at the decentralisation of public expenditure in India, between the union government and the states. Local bodies are outside the purview of the current analysis. Below is a graph of share of union and states in the total public expenditure in India.

Public Expenditure Centre and States

A few things stand out. The union government used to be a massive 65 percent of the overall government expenditure in 1990-91, which was continuously declining for the subsequent decade, until 2003-04. This is good evidence of financial decentralisation. However, the union government share started increasing from 2004-05 onwards, around the time the first UPA government came into power. The latest two years’ numbers are tentative as they refer to budget and revised estimates rather than actual expenditure, therefore we can say that union share has shot up to around 55% of the total in the recent past.

Below is a second graph, this time on the union-state shares of the total development expenditure over the past two decades. Development expenditure refers to expenses on infrastructure, health, education, agriculture, power and more; and leaves out defence, police, administration, interest repayments and several other items.

Development Expenditure - Centre and State

On the whole, union government expenditures are lower here because a few big-ticket, union-only expenses don’t get counted: defence and interest payments being the largest of them. The trends here are a little different.

While the union government share reduced from about 47 percent in 1990-91 to about 37 percent in 1996-97, it started steadily increasing from then to about 2006-07. It has spiked up even more since then, and it is notable that union government share was highest in the last 23 years in 2008-09 at 49.7 percent. This is strong evidence that fiscal decentralisation as a national policy is dead in the water.

Many commentators have noted the relentless centralisation of financial flows in the past few years, with ‘centrally sponsored schemes’ becoming bigger and more numerous by the year. The components that have contributed to this union government expenditure need to be unpacked further to understand what exactly is happening.

Government for 1.2 billion people needs as much flexibility and adaptability as one can give, and this dangerous re-centralisation of public expenditure needs to be reversed.


  1. Data collated from Indian Public Finance Statistics Reports 2004-05, 2006-07 and 2012-13.
  2. Data is unavailable for the years 1991-92 to 1994-95.
  3. 2012-13 numbers are budget estimates and 2011-12 numbers are revised budget estimates, so they must be interpreted with care. The rest are actual expenditures.
  4. The y-axes were cropped in the graph to better illustrate the changing trends in the union/state expenditure share.
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