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Impact Of Population Of Economic Growth

There is little to contest that the Indian sub-continent has witnessed a dangerously high level growth of population. It has been growing continuously at a rate of more than 2 percent per annum. Such a high growth of population is acting as a barrier to economic growth and development. Following points show how the growth of population has affected our economic growth.


1. Population and capital formation – As population of a country increases, the per head availability of natural resources declines. The shortfall can be made goods by building up capital in the process of exploring natural resources by a rising population. In under-developed and low income economies including India, the capital building activity stays at a much lower level because: (a) the growing population contributes less to production than it absorbs by way of increased consumption, (b) the quality of labour in under-developed economies also affects capital formation adversely, (c) proportion of workers of productive age to total population is highly unfavourable, (d) growing population results in diversion of resources not only to consumption expenditure but also to items of social overheads like education, health, housing, etc., so that volume of capital formation suffers.

2. Growth of national income – National income rose by 18 times but due to rise in population by more than 2 times per capita income increases by about 5 times only.


3. Pressure on food supplies – When population is increasing at a higher rate, the pressure on food supplies multiplies. This has exactly happened in India. The total production of food grains increased from 51 million tones in 1950–51 to around 218 million tones in 2009–2010. During the same period, population increased from 361 million to more than 1170 million. As a result, the per capita domestic availability increased marginally from 395 grams in 1950–51 to 444 grams in 2009-10. Thus, the fast growing population over the past 62 years has kept the per capita availability of food grains almost stagnant. It has counter-balanced even the success achieved under the Green Revolution. With the population crossing the 1000 million mark in 2000 and food grains production almost stagnating around the 200 million mark, the country could face a severe food shortage problem in the near future.

4. Pressure on means of subsistence – Rising population also distorts the land to man ratio. Since the supply of land is inelastic and we have almost exhausted the possibility of bringing cultivable land under cultivation, the rising pressure on land in resulting in progressive decline in the per capita cultivated land. This will be clear from the fact that whereas in 1921, the per capita cultivated land was 1.11 acres, it came down to 0.48 acres in 1995. As a consequence, the activities of land improvement, adoption of improved technology and capital formation in the farm sector have to suffer.


5. Dependency ratio – The dependency ratio, i.e., the ratio of unproductive population to productive population increases with an increase in population and places additional burden on the resources of the family as well as public utility services like education, health services, etc.


6. Population and unemployment – An economy, which is suffering from population explosion generally finds itself plunged in mass unemployment. Jobs do not widen in such economies because as the labour force is increasing, the complementary resources to it are not available. Low incomes, reduced savings and retarded investment hamper capital formation and increasing job avenues for the rising population are not available. Such economies usually face a backlog of unemployment, which keeps enlarging because current additions to the labour force are not fully absorbed. India is facing a situation similar to the above situation. The backlog of unemployed was 7 million at the end of the Second Five Year Plan. It swelled to 34–35 million at the beginning of the Ninth Plan. Thus, the pressure of population is ravaging the economy in terms of ever-increasing unemployment and problems associated with it.


7. Pressure on social overheads – Growing population is proving to be a menace in the sense that it requires colossal investment to build up a commensurate social overhead in the form of schools, houses, universities, hospitals, trains and systems of transport and communication, recreation centers leaves very less for investing in projects, which are productive in nature and lead to improvement in the standard of living of the people. Thus, the economy gets trapped in the vicious circle of low investment, income and saving.


8. Ecological degradation – A rapidly growing population also upsets ecological balance. The area under forests keeps shrinking, leading to serious problems of soil erosion and floods, with adverse effects on food production. There is also a great pressure of population on agricultural land leading to depletion of natural soil fertility, increase alkalinity and salinity of soil. Urban areas, under the pressure of population, suffer from the problems of inadequate infrastructural facilities (i.e. shortage of drinking water, transportation and housing facilities etc.) and pollution. Thus, we find that a fast rising population is acting as a drag on economic growth and unless steps are taken to control it, gains of economic growth will be neutralized by rapid increase in numbers.

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