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Indian Government Warns of Aging Population; Says Retirement Age Should Rise,
Schools Merge

Reuters

   NEW DELHI - The Indian government on Thursday warned in a study that
   its population is going to start to age and it needs to be prepared to
   merge schools and raise the retirement age.

   While India should be set to 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, that will quickly
   fade as the nation's fertility rate plunges below replacement level.

   The conclusions in the study, "India's Demography at 2040: Planning
   Public Good Provision for the 21st Century," will have major
   implications for many companies, particularly those that have been
   eyeing consumer demand from India's young population.

   It said 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.

   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, according to the study, which was
   included in the government's annual Economic Survey.

   It also said that policymakers need to prepare for an increasing number
   of elderly people, estimating there will be 239.4 million Indians over
   the age of 60 in 2041 against 104.2 million in 2011.

   "This will need investments in health care as well as a plan for
   increasing the retirement age in a phased manner," concluded the study,
   which was authored by India's Chief Economic Adviser Krishnamurthy
   Subramanian and his team of economists.

   The current retirement age for most government workers in India is 60.

   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 demographic dividend that is talked about in India refers to the
   current situation where the nation's labor force is growing quicker
   than the rest of the population it supports.

   If the newcomers to the labor market get well-paid jobs it boosts
   consumption and economic growth.