Will ₹25K Cash Alone Solve the Population Problem?

Andhra Pradesh Chief Minister Chandrababu Naidu is the first political leader in the country to express concern about declining Fertility Rates in the country.

Andhra Pradesh’s Total Fertility Rate (TFR) has dropped sharply to 1.5 (well below the replacement level of 2.1 needed for population stability). This marks a steep decline from around 3.0 in 1993.

If the TFR is low that means the older people are higher when compared to the young. That means at some point, the working population will reduce drastically because there is no energetic young to work and thereby, economic stagnation.

Countries like Japan (TFR 1.2), South Korea (0.7), and Italy (~1.2) are already facing the problem.

Recently, Chandrababu Naidu announced a one-time cash incentive of ₹25,000 for parents at the time of delivery of their third child or beyond. This is a good move but may not be good enough to address the problem.

There are two major problems for parents opting for one or none babies.

Firstly, the youth these days want freedom. They do not want to complicate their lives by having children. They see babies as a long-term commitment. If they commit, they feel they will lose the freedom to enjoy their lives. So, many prefer a one-child or no-child policy.

The second major problem is the rise in cost of living. The healthcare, education, and housing have become abnormally unaffordable. The Middle Class and even the upper-middle-class are not in a position to raise two kids.

The third kid Chandrababu Naidu is advocating is out of quest for most couples. The one-time cash incentive the AP Government is offering will not even cover the delivery expense of the baby if it is a Private Hospital. The decision to have just one child stems from the problems beyond the hospital.

Having two or more kids can be seen in the Poor or the Ultra-Rich. It is understandable why the Ultra-Rich are okay with it.

The Poor do not have a problem because they get ample assistance from the Government in the form of Freebies. Others do not have that.

The Indian Marriage System has also become costly. The Dowry Culture and the parents wanting to give a secured future for their kids are also the reason for the parents limiting the number of children. Parents do think they can not give a better life to their children with their finances if they have more kids. And so, they are limiting themselves to just one kid.

We live in a country where we have to spend lakhs even for nursery education. At the same time, government schools are not in decent shape.

We live in a country where the middle-class is dropped into Poverty with just a single serious medical bill.

Take the example of Hyderabad, a decent 2BHK is a mirage for the middle-class unless they are ready to travel hours together for work staying in distant locations.

This Problem will be automatically addressed when the Government Health Care improves, when education becomes affordable in the country, when the middle-class can afford housing in the urban areas.

One-time cash incentives will not solve this problem.