ICAI Notes 6.2 - Population CA Foundation Notes | EduRev

Economics for CA CPT

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CA Foundation : ICAI Notes 6.2 - Population CA Foundation Notes | EduRev

The document ICAI Notes 6.2 - Population CA Foundation Notes | EduRev is a part of the CA Foundation Course Economics for CA CPT.
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Learning Objectives

  • know the meaning of population.
  • get familiar with demographic trends in India.
  • understand how big population in India is acting as a drag on its economic growth.
  • understand the causes of rapid population growth in India.
  • know the steps taken by the government to meet the challenge of high population growth.


In common parlance, population refers to the total number of people residing in a place. Thus, population of India means the total number of people living in India. There was a time when growth in population was considered desirable. There are still certain countries (example, Australia), which give incentives to people to have large families and hence have big population of the country. For them, more number of persons is desirable as 

  • It provides work force to produce. 
  • It provides market for the products produced.
  • It may promote innovative ideas. 
  • It may promote division of labour and specialisation.

However, there are countries (example, India) for whom more number of persons is not desirable as 

  • There may not be adequate jobs to absorb all additional people. 
  • They put pressure on means of subsistence. 
  • They put pressure on social overheads (hospitals, schools, roads etc.) 
  • They may result in increased consumption and reduced savings and hence slow down capital formation. 
  • They may increase dependency.

Actually, whether a big and growing population is an asset or a liability for the economy depends upon economy to economy.


Size of Population : The size of population is determined in terms of number of persons. Considering the present boundary of India (i.e., except Pakistan and Bangladesh), the population in 1901 was 23.84 crores and after one hundred years, in 2001 it was 102.27 crores. Thus, over
a period of 100 years, our population has more than quadrupled. In 2008-09 the population was 115 crores. The population during various census years is given in Table 1.

Table 1 : India’s Population (1901 - 2001) (in crores)

Census YearPopulation

The Table shows how population has grown in size over the 20th century. As far as the size of India’s population is concerned India ranks second in the world after China. India has only about 2.4 per cent of the world’s area and less than 1.2 per cent of the world’s income but accommodates about 16.7 per cent of the world’s population. In other words, every sixth person in the world is an Indian.

Rate of Growth : Table 2 shows the rate of growth of population in India. It shows growth rate of population per decade and per annum.

Table 2 : Growth of population


Growth Rate per decade

(Per cent) per annum


During 1901-11, the population grew by 5.74 per cent over the decade or 0.56 per cent per annum. The next decade saw a fall in the growth rate. In fact, there was a decrease in the population and growth rate became negative. Since 1921, population has again started increasing. In fact, year 1921 is known as ‘Year of Great Divide’ for India’s population. The slow or negative growth during 1901-21 was due to rapid and frequent occurrence of epidemics like cholera, plague, influenza and famines. Since Independence, the rate has not only been positive but crossed the 2 per cent mark. Between 1961-1991, the growth rate has remained above 2 per cent per annum. Only in 1991-2001 decade, the growth rate has come down to 1.93 per cent per annum.

Birth rate and Death rate : Table 3 shows birth and death rates in India since Independence. Birth rate refers to number of birth per thousand of population. Similarly, death rate refers to number of deaths per thousand of population. We see from the table the death rate has declined significantly from 27.4 in 1951 to 8.4 in 2001 and 7.4 in 2007 and birth rate, although has declined but the decline is not so remarkable. Birth rate was 39.9 in 1951, it fell to 25.4 in 2001 and to 23.1 in 2007.

Table 3 : Crude Birth and Death Rate

YearBirth RateDeath Rate

Among all the states, Kerala has the lowest birth rate of 14.7 (2007) and Uttar Pradesh has the highest birth rate of 29.5 (2007). Considering death rate, West Bengal has the lowest death rate of 6.3 and Orissa has the highest death rate of 9.2 in 2007.

Density of population : Density of population refers to the number of persons per square kilometer. The changes in the density of population have been indicated in Table 4 :

Table 4 : Density of Population

YearDensity of Population

Density of the population before Independence was less than 100. But after Independence, it has increased rapidly from 117 in 1951 to 274 in 1991 and further to 324 in 2001. Thus the pressure of population on land has been rising. The density of population is not the same for all the States; while Kerala, West Bengal, Bihar and U.P. have density higher than the average density, Andhra Pradesh, Himachal Pradesh, Gujrat, Madhya Pradesh, Maharashtra, Karnataka, Orissa, Rajasthan, Sikkim etc. have density lower than the nation’s average. This difference could be due to the differences in natural resources endowment, level of development etc. West Bengal is the most densely populated state in the country with 904 persons living per sq. km. followed by Bihar with 880.

If we consider all states and union territories of India, Delhi has the highest density of population – with 9294 persons, followed by Chandigarh with 7903 persons living per square kilometre. Inter-State variations in India in the density of population are also very informative about the demographic situation in the country.

For example, we have Delhi on one side with density of more than 9000 and on the other side Arunachal Pradesh with density as low as 13 persons per sq. km. Even we can make a guess about the level of development seeing the density of the area. Generally, it has been noticed that areas which are industrially well developed experience higher density vis-a-vis areas which are not. But if in an economy, agricultural sector is dominant, better climate, rainfall and irrigation facilities exercise considerable influence on the density of population.

Sex ratio : Sex ratio refers to the number of females per 1000 males. The following table gives sex-ratio since Independence.

Table 5 : Sex Ratio (females per 1000 males)

Census YearSex Ratio

The above Table sows that sex ratio, is highly favourable to males than females. This speaks of a very important characteristic of our society i.e., our society is male dominated. This is in contrast to what is found in other countries of the world specially the more advanced one. Till late, there was great tendency among people in India to get the sex of the unborn child medically tested and get the pregnancy terminated if it was female. But now these tests have been banned. The recent census (2001) shows that there has been a marginal increase in sex ratio. Sex ratio was 927 in 1991. Now it is 933. That means the number of males per thousand females is on decrease. For rural and urban India this ratio was 946 and 900 respectively in 2001.

If we analyse State-wise figures, we find the sex ratio is favourable to males in all the States except Kerala. In Kerala, ratio of females to males in 2001 was 1058. Kerala is the State which provides better status to women as compared to other States. A number of reasons are ascribed for a high ratio of males to females. These are:
(i) Neglect of female child and greater care for the male child in general results in higher mortality in the former case than the latter.
(ii) High death rate among females specially during the time of child birth and due to low resistance power resulting from a number of deliveries without having proper diet and rest makes the sex ratio unfavourable to females.
(iii) Under-reporting of female births. Haryana has the lowest female sex ratio of 861 (2001) among states.

Life-expectancy at birth : Life expectancy refers to the mean expectation of life at birth. If death rate is high and/or death occurs at an early age, life expectancy will be low and, it will be high if death rate is low and/or death occurs at an advanced age. The following Table shows life expectancy at birth both for males and females.

Table 6 : Life expectancy at Birth (in years)


Life expectancy has improved over the years. During 1901-11, life expectancy was just 23 years. It remained below 30 years till the decade 1921-30 and remained below 40 years till the period 1941-50. However, it improved to 55 in 1981 and to 60 in 1991 and further to 63.8 in 2001. Considerable fall in the death rate is responsible for improvement in the life expectancy at birth. This could be one of the reasons for favourable sex ratio for males.

Amongst the states, Kerala had the highest life expectancy at birth at 74 and Madhya Pradesh had the lowest life expectancy at birth at 58 in 2006.

Life expectancy at birth in India compares badly when compared with the life expectancy at birth in developed economies and some of the developing economies such as Sri Lanka and Thailand. India can still improve its life expectancy by increasing moderately the expenditure on public health and medicine.

Literacy ratio : Literacy ratio refers to number of literates as a percentage of total population. Literacy ratio in general and among males and females is shown below :

Table 7 : Literacy Ratio

Census YearLiterate personsMalesFemales

In 1951, only one-fourth of males and one-twelfth of females were literate. Thus on an average only one-sixth of the people of the country were literate. During 1951-2001, there has been considerable improvement in literacy. This is clear from the figures of 2001. In 2001, 76 per cent of males and 54 of females were literate giving an overall literacy rate of 65. Compared with other developed countries, this rate is very low. Illiteracy among 35 per cent of the population is bound to affect the progress of family planning programme. It has been found that literate persons are more responsive to family planning programme than illiterate ones.

Literacy is higher among urban population compared with rural population. This could be because of better facilities of education in urban areas compared to the facilities available in rural areas. In 2001, the proportion of literacy among males was 86 per cent in urban areas as against 71 per cent in rural areas. Similarly 73 per cent of the females in urban areas were literate as against about 46 per cent in rural areas.

Literacy rates are different among the States also. Kerala has the highest literacy ratio of 90.86 per cent and Bihar has the lowest literacy ratio of 47 per cent. As against about 90 per cent literacy in Kerala, about 82 per cent in Goa, 77 per cent in Maharashtra and Himachal Pradesh, and 73 per cent in Tamil Nadu, literacy is less than 50 per cent in Bihar, and around 60 per cent in Rajasthan and Uttar Pardesh. The differences are even greater when we compare literacy among females in the different states.

The Eighth Plan aimed at complete eradication of illiteracy among people in the age group of 15 to 35 years by the end of the plan. Seeing the overall progress on literacy front till now, this seems to be a difficult target. According to one estimate, it would take more than 30 years for the Indian population to be fully literate.


Population generally increases because of
(i) high birth rate.
(ii) relatively lower death rate.
(iii) immigration.
India’s population has mainly increased because of high birth rate and relatively low death rate.

Causes of high birth rate

(1) India is predominantly agrarian economy. In an agrarian economy, children are considered assets and not burdens as they help in agricultural fields.

(2) The process of urbanisation is slow in India and it has failed to generate social forces which force people to have small families.

(3) There is high incidence of poverty in India. Poor people tend to have large families.

(4) Marriage is both a religious and social necessity in India. Presently in India by the age of 50 only 5 out of 1,000 Indian women remained unmarried.

(5) Not only marriages are almost compulsory, they take place at quite young age in India.

(6) Most Indians on account of their religious and social superstitions desire to have more children having no regard to their economic conditions.

(7) Joint family system in India also encourages people to have large families.

(8) Lack of education among people especially among women causes people to have irrational attitudes and hence big families.

Causes of fall in the death rate

(1) Famines which were wide spread before Independence, have not occurred on a large scale since Independence. Whenever droughts occurred, they have been dealt with adequately

(2) Cholera and small pox often resulted in epidemics before Independence. Now small pox is completely eradicated and cholera is very much under control. Similarly there has been decline in the incidence of malaria and tuberculosis. These have resulted in reducing the death rate.

(3) Other factors which have reduced the death rate are: spread of education, expanded medical facilities, improved supply of potable water, improvement in the nutritional level and so on.


India is passing through the phase of population explosion. Population explosion is a transitory phase according to the theory of Demographic Transition. This theory says that every country passes through 3 stages - In the first stage both birth rate and death rate are very high. Hence, population remains stable. In this stage, birth rate is high because people are illiterate, poverty is wide-spread, marriages are conducted at early age and superstitions cause people to have big families. Death rate is high on account of malnutrition, lack of medical facilities, absence of hygienic conditions etc.

In the second stage, birth rate comes down slightly but death rate comes down very heavily. Death rate comes down due to improvement in medical facilities and improved standard of living. Birth rate remains high because of social beliefs and customs do not change overnight. This stage is also called the stage of population explosion as population increases at a very high rate during this stage.

In the third stage, greater education causes people realise the importance of smaller families and better standard of life. Old social customs give place to new ideas. As a result, birth rate is low. Death rate is low because of better hygienic conditions and better medical facilities. The net result is population grows at a very modest rate.

Now we will analyse how growth of population has affected economic growth in India.

(i) Growth of national income : National income rose by more than 12 times during 1950-51 to 2007-08, but on account of increase in population by more than 2 times, the per capita income rose by a little more than 3.25 times only. The average annual growth during this period was about 4.4 per cent but could effect an increase of only 2.3 per cent in per capita income.

(ii) Food supply : The total production of foodgrains increased from 51 million tonnes in 1951 to about 231 million tonnes in 2007-08. During the same period population increased from 361 million to 1138 million. Consequently, the per capita domestic availability of foodgrains increased from 395 grams to 443 grams signifying a very small increase in per capita availability. As compared to increasing demand for food, per capita availability of food grains is insufficient. If the present trend of increase in population continues demand for foodgrains might outgrow population unless the increase in population is contained by vigorous family planning programmes. Also, increase in production of foodgrains has to be brought about more and more through increasing productivity because per capita availability of cultivable area is coming down gradually. In 1951 it stood at 0.33 hectare per capita which came down to 0.17 hectare per capita in recent years. A falling land-man ratio has to be compensated by increase in productivity per acre.

(iii) Unproductive consumers : With a rapid increase in population, the ratio of children and old persons in total population has a tendency to increase which leads to higher burden of unproductive consumers on the total population. In India, around 63 per cent of the population is in the age group 15-64 and 37 per cent of the population is under 15 or above 64. An increase in the ratio of unproductive consumers places additional burden on the resources of the family as well as the public utility services like education, health etc. Economists have calculated the burden of dependency in terms of food, education and health. Such dependency load is an important contributing factor to the vicious circle of poverty and under-development in developing countries.

(iv) Problem of unemployment : With fast growing population, the labour force increases rapidly and there is a pressure for creating jobs for the growing labour force. In absence of insufficient number of jobs, the number of unemployed people increases.

In India, in successive plans job opportunities have been created but they have fallen short of the required numbers and as a result the backlog of unemployed people has become very large. It is estimated that unemployed and underemployed persons constitute nearly 10 per cent of the labour force in India. Moreover, it is projected that total labour force will increase by 45 million in the Eleventh Plan. Jobs will have to be created for these people plus the people in the backlog.

(v) Capital formation : It is said that a part of capital formation investment normally goes in maintaining the existing standard of living for the additional population. For example, with a population growth of 2 per cent an investment of around 8 per cent (with a capital output ratio of 4 : 1) of national income would just be able to maintain the existing standard for the additional population. Therefore, for any improvement in the standard of living, the capital investment has to be very large. Thus, for 5 per cent rise in per capita income the resources needed for the economic development will be 20 per cent. Thus to bring about an increase of 5 per cent in per capita income, an investment of 28 per cent (8 per cent for demographic investment and 20 per cent for economic investment) will be needed.

(vi) Ecological degradation: A rapid growth population in India, as in many other countries, has somewhat upset the ecological balance. There is a gradual shrinkage of area covered by forests as also open land. Denudation of forest means serious soil erosion and floods with their adverse consequences on food production. Also, removal of forests has led to unfavourable climatic changes evidenced by prolonged droughts over extensive areas. There is also a great pressure on agricultural land leading to depletion of natural soil fertility, increase in alkalinity and salinity of soils. A high concentration of population in urban areas, unsupported by adequate infrastructural facilities (drinking water, sanitation, transportation, housing etc.) is a cause of serious pollution.


Population growth is not to be left to natural, biological and other forces. Policy intervention is needed to plan and regulate it in tune with the needs of the economy and society. Even if economic growth rate is more than population growth rate, a developing country cannot afford to derive satisfaction from this fact but should deliberately adopt some policy measures to slow down the rate of population growth. In a developing country like India, the fruits of rapid economic growth will have little impact on society if population growth is not controlled. Much of the gains of economic growth is neutralised by rapid increase in numbers. Even inflation which is another neutraliser of economic growth is partly a function of population growth.

Family planning which was and is a principal component of the population policy was taken up on a modest scale with emphasis on clinical approach during the first decade of planning. The emphasis was mainly on research in the field of demography, physiology of reproduction, motivation and communication. Since these measures did not yield the expected results, a full fledged department of family planning was created in 1966. Various contraceptive methods were offered and the acceptors had the freedom to choose any of the methods offered. This has been known as ‘cafeteria approach’. The allocation towards family planning programmes kept on increasing from plan to plan. There was a significant shift in the strategy of the government towards population under the Fifth Plan. A new National Population Policy replaced earlier Population Policy of the government. It was felt that to wait for education and economic development to bring about a drop in fertility was not a practical solution. The very increase in population made economic development slow. Therefore, a direct assault on the problem was made. Under the policy the marriageable age was raised to 18 years and 21 years for girls and boys respectively, monetary incentives were offered for voluntary sterilization and family planning was made a mass movement by involving various community groups like Zila Parishad, Panchayat Samitis, Co-operative Societies and trade unions at the grass roots levels.

The implementation of parts of this policy during Emergency (1975-77) had disastrous consequences since the implementers indulged in all types of high-handed practices. The result was that the family planning programme became an object of popular fear and hatred. Learning from the experience of Fifth Plan, in Sixth Plan and plans thereafter again the emphasis shifted to education and economic development as a means of solving population problem.

National Population Policy, 2000

With a view to encourage two-child norm and stabilizing population by 2046 A.D. the Government adopted the National Population Policy (NPP-2000). The following are the main features of the NPP : 

  • Address the unmet needs for basic reproductive and child health services, supplies and infrastructure. 
  • Make school education up to age 14 free and compulsory, and reduce dropouts at primary and secondary school levels to below 20 per cent for both boys and girls. 
  • Reduced infant mortality rate to below 30 per 1000 live births. 
  • Reduce maternal mortality ratio to below 100 per 100,000 live births. 
  • Achieve universal immunisation of children against all vaccine preventable diseases. 
  • Promote delayed marriage for girls, not earlier than age 18 and preferably after 20 years of age.
  • Achieve 80 per cent institutional deliveries and 100 per cent deliveries by trained persons.
  • Achieve universal access to information/counselling, and services for fertility regularisation and contraception with a wide basket of choices.
  • Achieve 100 per cent registration of births, deaths, marriage and pregnancy.
  • Prevent and control communicable diseases.
  • Integrate Indian System of Medicine (ISM) in the provision of reproductive and child health services, and in reaching out to households.
  • Promote vigorously the small family norms to achieve replacement levels of TFR (Total Fertility Rate).
  • Bring about convergence in implementation of related social sector programs so that family welfare becomes a people centred program.

Tenth plan Targets: Maternal Mortality Rate (MMR) refers to the number of maternal deaths per 1,00,000 live births. Infant Mortality Rate refers to number of babies dying before the age of one, per 1000 live births. As per 2007 data, Infant mortality rate in India is highest for Madhya Pradesh (72) and lowest for Kerala (13).

The Tenth Plan targeted a reduction in Infant Mortality Rate (IMR) to 45 per 1000 by 2007 and 28 per 1000 by 2012, reduction in Maternal Mortality rate (MMR) to 2 per 1000 live births by 2007 and 1 per 1000 live births by 2012 and reduction in decadal growth rate of the population between 2001-2011 to 16.2 per cent. Seeing the achievements so far it is unlikely that the targets set would be timely achieved. For example, IMR is still very high at 55 (2007). Similarly, MMR is also quite high at 2.54 (2001-04).


In this Unit we have learned a very important fact that whether a growing population stimulates growth or retards growth depends upon the size of the economy, active population of the country, level of development and combination of all factors that determine growth. Taking the Indian case we find that India is over populated and is instrumental in retarding growth.

While analyzing the population policy of India we find that economic and social measures have not been given proper weightage and complete reliance has been placed on family planning which is not very effective owing to widespread illiteracy and poverty in the economy. Even the family planning programme is not well integrated and well planned.                   

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