The world’s population surpassed 8 billion in November 2022. India and China are currently the two most populous countries, with 1.408 billion and 1.412 billion citizens, respectively. In April 2023, India is expected to overtake China to become the most populated country in the world. This rapid population growth will, no doubt, have numerous impacts on India and the rest of the world, but will this be of benefit to India? 

Before considering the effects that the population growth will have, it is important to understand the causes of this rapid population growth in India. One of the main reasons for such a steep rise in India’s population is the increasing difference between birth and death rates. Although there has been a decrease in birth rates, death rates have lowered quicker; therefore, the population keeps increasing yearly. This population trend has various consequences for the Indian economy.

India’s population rise has brought along high levels of economic growth. Since 2006, India’s GDP (Gross Domestic Product) has seen an average increase of 6.12%. This is because, since 2006, India’s population has risen by almost 250 million. On average, emerging economies grow by 2-3% year on year. India’s growth figure is much higher than the average, signalling its economic potential. The additional population will soon be of working age, substantially increasing the available labour for businesses. It will, therefore, be cheaper for transnational corporations (TNCs) to produce greater quantities of their goods in India. Apple, one of the world’s largest TNCs, has set a target to increase iPhone production in India from today’s 6% up to 25% by 2025. More companies will likely follow this move and look outside China for the bulk of their production. By shifting production to India, companies would create jobs in rural areas. Through the multiplier effect, these wages would be spent on Indian goods and services, further boosting economic growth. 

This additional growth by the multiplier effect would cause improvements in the standard of living for people consequently employed by the new factories. The TNCs would have to pay taxes to the government, which could be used to improve infrastructure, and improve standards of living, for projects such as building new roads and schools. Moreover, India has a particularly large informal sector, which accounts for over 50% of its economy. The benefits of the formal employment these TNCs offer include employee rights, better working conditions, maternity leave and health insurance. This holds important long-term value to the Indian economy because it improves living conditions. This change could also decrease inequality; the new factories would be built in the poorer countryside areas since land there is cheaper. This would help increase development in those areas and bridge the financial gap between rural and urban areas. Inequality is an issue that India is struggling with, as is typical for emerging economies, the UAE also saw high inequality in the 1990s. The top 10% of Indian earners hold 77% of the total national wealth; this shows the disparities between the elite and the working class and thus the need to reduce inequality. Population growth has helped to decrease inequality, illustrated by the drop in poverty levels from 22.5% in 2011 to 10.2% in 2019 and the introduction of TNCs to India will further these benefits.

There are a number of significant drawbacks to these rises, such as overpopulation. Whilst overpopulation is a global issue, India, in particular, faces its worst effects. With a population rising so quickly, India faces the challenge of allocating its limited natural resources across its populous. This effect of overpopulation can have a regressive impact on inequality. Natural resources cannot keep up with the population rise, which rations out those who cannot afford goods and services from the market. This rationing means Indian’s poorest can’t afford many goods. Cities are already struggling to accommodate such large numbers of people and whilst the majority of India’s wealth is in urban areas, cities are already facing the negative impacts of overpopulation. 

Mumbai, for example, has a population density of 76,790 people per square mile. This staggering figure is not just the highest in India but the highest worldwide. Numerous other Indian cities also have very high population densities. Kolkata and New Delhi have population densities of 61,945 and 28,600 people per square mile. This is a worrying issue for the Indian government since many of these people are living in squatter settlements. Dharavi is a squatter settlement in Mumbai, in which there are over 1 million residents. Since squatter settlements are unauthorized, Dharavi has not received any significant government aid. Due to higher rates of poverty, increasing numbers of people have turned to live in squatter settlements such as Dharavi. This overpopulation crisis worsens rates of poverty and widens inequality leading many to suffer the poor living conditions of squatter settlements.

Another impact that overpopulation has is damage caused to the environment. India already has some of the highest global pollution levels; in 2021, 14 out of the 20 most polluted cities in the world were in India. This is an alarming figure, both for those living in these cities and those around the world. In New Delhi, the PM2.5 concentration (a measure for pollution) exceeded the WHO (World Health Organisation) guideline by over ten times. Firstly, this has detrimental effects on health, causing asthma and various lung diseases but also harms the environment more broadly. Furthermore, India’s pollution is likely to be worsened with the population increase since there will be more people emitting greenhouse gases through travel. The damaging effects of pollution are worsened by the fact that India hasn’t adopted green fuels as much as other nations. In order to provide electricity and heating to such a large population, India needs a substantial amount of energy, 55% of which is currently coal-fuelled. Without a significant shift towards green energy in the future, CO2 emissions will continue to rise to dangerous levels and cause issues on a global scale. India’s overpopulation issue exasperates this pollutive effect causing many citizens to pay with their health. 

Projections suggest that by 2050, India will have a population of 1.67 billion. The rapid population rise is likely to cause an increase in inequality and a lower standard of living, especially for those living in squatter settlements. Moreover, India’s pollution problem is only worsened by its unsustainable population rise. However, cheap labour would attract TNCs to invest and create jobs in India, stimulating economic growth and lowering inequality. Overall, the costs of India’s rapid population rise far outweigh the benefits, and the Indian government will have to pay close attention this issue over the coming decades.