From Dividend to Deficit? India’s Ageing Challenge
India is ageing before it is wealthy; but with reforms it could set a model for the developing world.
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Aneesh K A and , Christ University
Hoimawati Talukdar, Christ University
SDG 3: Good health and well-being
Institutions: Ministry of Social Justice and Empowerment
The world is ageing. India – long the poster child of youth – is entering a silent demographic upheaval. In 2022, more than 149 million Indians were over 60, roughly one in ten. By 2050 the number will climb to 347 million, or one in five. That shift will reshape the economy, healthcare and social security in ways that few institutions appear ready for.
Consider Meera Patel, 64, who still sells vegetables in Ahmedabad after a lifetime of informal work. With no pension and rising medical bills, she is emblematic of a generation forced to work into frailty. Her story captures the dilemma: India is ageing before it is affluent.
Fragile Foundations
Unlike Japan, Italy or Germany, where more than 30 per cent of people are already over 60, India is confronting old age with fragile systems. These countries built pensions, health insurance and elder-friendly infrastructure long before their populations grew old. India faces the same transition, with far weaker safety nets and little fiscal room to manoeuvre. Public spending on health has hovered at just over 2 percent of GDP – far below the Organisation for Economic Co-operation and Development (OECD) average of 9 percent, while pension coverage is confined to a narrow slice of formal-sector workers.
Institutions are unprepared. The India Ageing Report 2023 warns that dependency ratios are climbing just as the joint family system, once the main safety net, is eroding under migration and urbanisation. Schemes such as the Indira Gandhi National Old Age Pension or the National Programme for Health Care of the Elderly (NPHCE) exist, but coverage and delivery are inconsistent. The old-age pension offers as little as ₹200 a month from the Centre, with many states struggling to top it up, while geriatric wards under the NPHCE remain scarce outside a handful of districts.
Nearly 70 percent of older Indians still rely on family members for financial support – an arrangement fraying as households shrink. In rural areas, retirement usually arrives without pensions. Among the urban poor, irregular work keeps people outside provident funds or insurance. Only one in five elderly Indians has health insurance; over 90 per cent of workers remain in the informal sector with no retirement security.
The vulnerabilities are also sharply gendered: over half of Indian women above 60 are widowed, many without stable income or healthcare. By 2050 women will outnumber men in older cohorts by nearly 18 million.
A Squandered Dividend
India’s deeper challenge lies in having failed to fully capitalise on its demographic dividend – the decades when workers vastly outnumbered dependents. Those were the years to formalise employment, expand social insurance, and invest in productivity. Instead, policy inertia left most of the workforce in insecure, low-wage jobs, while savings and pension coverage remained shallow.
The consequences are now surfacing. As fertility falls and life expectancy rises, the labour-to-dependent ratio will shrink. A smaller share of workers will shoulder a rising number of retirees. This imbalance threatens to slow income growth, weaken consumption, and narrow the tax base, just as welfare spending on pensions, healthcare, and social support begins to climb. Without course correction, India risks facing old-age pressures while still carrying the fiscal burdens of a developing economy.
Towards a Humane Policy reset
This shift requires systemic reform, not piecemeal fixes. India can still turn ageing into an opportunity by building a comprehensive safety net and reimagining the role of older citizens. That means moving towards a universal, contributory pension system that covers informal workers and is portable across jobs and regions.
Geriatric care must be integrated into every level of public health, from village clinics to tertiary hospitals. social responsibility funding and public-private partnerships, can ease the strain on families. At the same time, gender-sensitive programmes are needed to address the particular risks faced by older women, many of whom are widowed and without income.
Technology should be seen as a complementary tool. Digital platforms can expand access to healthcare and financial services, while telemedicine can relieve pressure on overstretched hospitals.
But these gains will only materialise if the state invests in broadband, affordable devices and training for both caregivers and the elderly. Today, barely half of Indian households have internet access, and smartphone penetration among those over 60 remains in the single digits – a stark reminder of the gap between digital promise and social reality. A well-designed ecosystem could restore dignity to older citizens and, in the process, generate jobs in a new “care economy”.
Rethinking “Successful Ageing”
Ageing is not just a medical or economic challenge; it is also a social one. Globally, the idea of “successful ageing” – combining longevity with wellbeing, activity and dignity – has gained traction since the 1980s. India now faces the task of translating that vision into its own context, where successful ageing means not just longer lives but lives that are engaged, secure, and respected.
Longer lives can translate into extended productive years, stronger intergenerational ties, and a growing care sector that generates jobs and innovation. Policies that reduce the burden of healthcare costs, support lifelong learning and incentivise longer work could unlock these gains. Out-of-pocket health spending still makes up nearly 50 percent of India’s total health expenditure. Yet models elsewhere show what is possible: Singapore subsidises mid-career retraining through its SkillsFuture programme, with more than 600,000 older workers participating in recent years. A similar approach could allow Indian workers to extend their working lives with dignity and adapt to a changing economy.
Around 15 million older Indians already live alone, most of them women. Rather than treating them as passive dependents, India can view them as mentors, volunteers and community leaders – a reservoir of knowledge and social capital. Japan’s Silver Human Resources Centres, for instance, engage more than 700,000 seniors in community work each year, from childcare to urban upkeep. A similar model could help India channel its ageing population into purposeful roles that benefit both society and the economy.
Beyond Crisis Thinking
Ageing need not be cast as a crisis. With foresight, India can embed social action into policy – strengthening community-based care, incentivising intergenerational support and enabling longer working lives without sacrificing dignity. A humane ageing strategy would combine financial protection, health coverage and civic participation, turning longevity into an asset.
Handled wisely, India’s elders can be recognised not just as dependents but as workers, mentors, and citizens and ageing itself reframed as a dividend rather than a deficit.
Aneesh K A and Hoimawati Talukdar are Assistant Professors at Christ University. Views are personal..
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The discussion in this article is based on the authors’ working paper on the subject. Views are personal.