New Delhi: India is often described as a youthful country. Justifiably so, given that 58% of its population is below the age of 35 years and 41% is below 25 years. But stepping back from national totals into state-level data reveals the extent of demographic diversity across the country. According to United Nations (UN) population projections, there are an estimated 167 million persons aged 60 and over in India, but they are not distributed evenly across states and regions. Some regions have a young demographic profile, while others skew towards an older-age population. The truth is, India is both young and ageing: it has the world’s largest Gen Z cohort and the second-largest cohort of those aged 60 and above.
One way to make sense of this wide range of demographic profiles is to classify states by age profile. The latest Reserve Bank of India (RBI) report on state finances, released in January, divides states into three categories based on the share of 60-plus persons in their population. A state is classified as ‘ageing’ if this share is 15% or more; ‘intermediate’ if this share is between 10% and 15%; and ‘youthful’ if it is below 10%. RBI calculations show that almost all states were in the youthful category in 2016.
By 2026, Tamil Nadu and Kerala will be ageing states, with 15.8% and 18.7% of their population, respectively, in the 60-plus category. The real change comes after that. In another decade, by 2036, more than half of India’s states will be ageing, and the rest will be intermediate, with no states in the youthful category. In the two decades between 2016 and 2036, the shift from a young nation to ageing country will be well underway, and that has important economic and social implications.
Population dynamics
How fast a state ages depends on two population metrics: total fertility rate (TFR) and life expectancy at birth. TFR measures the average number of children a woman has in her lifetime. A TFR of 2.1 births per woman, under certain conditions, results in a stable population so that each generation is replaced by another of approximately the same size.
Population control programmes usually aim to reach the replacement rate. India, for example, has championed the two-child policy for many years. At an all-India level, this goal has been achieved. The Sample Registration System Report (SRS) 2023 showed that India’s TFR has dropped to 1.9, below the replacement level.
But at the state level, there was a wide variation in TFR—from 1.2 in Delhi to 2.8 in Bihar, with the median fertility across states at 1.6-1.7. The range in fertility widens if rural-urban differences are taken into account. For example, TFR in rural Bihar was estimated at 2.9, whereas urban Himachal Pradesh was at 1.1.
The second metric, life expectancy at birth, measures the average number of years a person is expected to live at birth. The combined life expectancy for both genders for India is around 72 years (UN population projections). Here again, there is considerable inter-state variation. The average life expectancy at birth for a person born in Chhattisgarh is 65 years, and for one born in Kerala is 75 years. Life expectancy is higher in urban India (73.1 years) as compared to rural India (69.1 years), perhaps due to better access to healthcare. In general, people residing in relatively more urbanized states can be expected to live longer.
The link between ageing, fertility and life expectancy can be understood through three broad trends. First, states with low fertility rates tend to have higher life expectancy. When fewer children are born and people live longer, the age distribution of the population becomes skewed towards older people. In other words, the state starts ageing.
SRS data shows a clear north-south divide in the pace of ageing. The five southern states—Tamil Nadu, Karnataka, Kerala, Andhra Pradesh and Telangana—have low fertility and high life expectancy, and all of them are predicted to be in the ageing category by 2036. In contrast, the share of 60-plus persons in Uttar Pradesh and Bihar at that time is expected to be merely 10% of their population. The differential pace of ageing matters a lot, because the age-profile of a population impacts economic activity, incomes, savings and consumption.
Ageing India
As a state’s population grows older, fewer local persons are available to work. Simultaneously, if families have fewer children, then fewer people will join the workforce in future. At some point in this cycle, the share of the working-age population (15-64 years) starts falling.
The RBI estimates show that for Tamil Nadu and Kerala, the share of working-age population is expected to start falling by 2026. Others such as West Bengal, Maharashtra, Delhi, Punjab, Andhra Pradesh and Karnataka will see a fall by 2031. In contrast, some states, notably Uttar Pradesh, Rajasthan and Bihar, will not reach peak working-age population even in 2036.
This is not a demographic catastrophe—the share of working-age population is not expected to fall below 60% for any state except Kerala in the next decade. However, it is quite clear that ageing states will have smaller pools of domestic labour in the future.
The second, and more important trend, is the direct relationship between ageing and state domestic product (SDP). Ageing states tend to be richer and youthful states are among the poorest. This is particularly stark at the bottom of the prosperity ladder: states that will remain youthful through the next decade are those with the lowest per capita SDP currently.
But that does not mean that older states are not growing. Tamil Nadu’s standout 11% real SDP growth in 2024-25 is a good example of the economic dynamism in certain ageing and near-ageing states. Inherent in this relationship is a clear tradeoff between labour and capital. For instance, Tamil Nadu has the capital and entrepreneurial ability to set up industrial enterprises, but not enough labour. Bihar and Jharkand are capital scarce but have abundant labour supply.
Third, these demographic shifts are not limited to the southern states or the wealthiest regions. Eventually, all states will experience declining fertility, higher life expectancy and declining working population, though the pace of impact will vary. The inevitability of an ageing population makes it critical that its consequences are understood, and policies to manage the situation are put in place well in advance.
Migration gains
Population ageing has significant economic and social consequences. The economic impact shows up through ageing-related economic behaviour. Since older people tend to live off savings and pensions, ageing states are likely to face declining personal income tax revenues.
At the same time, budget spending on health, pensions and age-related social welfare measures is likely to increase. This is some evidence of this already. In 2024-25, about 30% of the total social spending of ageing states went towards pensions, as compared to 22% for youthful states.
The social impact arises from rising labour mobility, as labour moves from poorer states to those offering greater employment opportunities. The 2011 Census recorded a migrant population of 450 million. According to the 2016-17 Economic Survey, around 5-9 million people migrate within India each year; on that basis, the present migrant population could be 550-600 million.
As frontier ageing states, Kerala and Tamil Nadu have been the top recipients of migrant workers, mostly from Bihar, Uttar Pradesh, Assam, Jharkhand, West Bengal and Odisha. In fact, even before Kerala and Tamil Nadu started ageing, their workers were moving overseas to Gulf countries or South-East Asia, creating a vacuum that was filled by young workers from poorer states.
For example, in Tamil Nadu’s Tiruppur district, the textile export hub of India, half of the 600,000 workers in apparel production units are reported to be migrants. These workers face language barriers, long working hours, loneliness and tight financial conditions. Job security is non-existent: when the US announced steep tariffs in 2025 and export orders dried up, many migrant workers lost their jobs.
Yet, there is both opportunity and inter-dependence. Tiruppur cannot operate without migrant workers as local workers are either unavailable or unwilling to work. Migrant workers are increasingly grabbing the chance to learn on the job and build their own businesses in the region.
Next door, Kerala is estimated to have 3-3.5 million migrants working in construction, manufacturing, marine fisheries and agriculture. The state attracts many workers due to its relatively higher wages, and state-sponsored welfare schemes providing health, housing and language learning facilities. Telangana’s construction boom relies heavily on an estimated 1.8 million migrant labour population. These workers, mainly from Bihar, work in construction, as well as rice mills, agriculture, poultry and informal service jobs.
Host states benefit in multiple ways from migrant labour, who keep the factories running, spend part of their wages locally and use their informal networks to ensure a steady stream of workers from their home states. For the migrant worker’s home state, the benefits are immense.
A 2023 survey conducted by Gram Vikas and Axis Bank in Surada block of Odisha noted that without the migrant worker’s income, 9 out of 10 surveyed households would not have been able to come out of poverty and four-fifths would not have been able to repay debt. The Jharkhand Migrant Survey 2023 similarly showed that migrant remittances improved consumption and economic status of their families back home.
Checks and balances
India’s regionally staggered ageing gives it a unique advantage. The three different speeds at which states are growing old provides a longer runway for growth, because internal migration can make up for labour shortages for decades to come. But if India is to achieve development in one region through displacement in another, then steps need to be taken to improve integration of migrant workers.
Migration-prone states, in turn, should monitor worker flows periodically. An annual migration survey will provide data to assess which districts are sending out the most migrants. Such information can enable targeted policies—for example, an area heavily reliant on remittances may benefit from better banking and mobile services. Efficient and humane management of migrant workers can ensure a smooth transfer of labour from the younger to the older states, with a matching flow of remittances in the opposite direction.
The fiscal consequences of ageing have been compounded by the increase in unconditional cash transfers by states. The latest Economic Survey estimates that in, 2025-26, such transfers amounted to ₹1.7 trillion, or 0.9-1.25% of SDP. Given that most states run deficits, such schemes end up being financed by taking on additional debt.
Welfare spending in ageing states must be well-targeted, with a larger share directed at managing the needs of older people. Such schemes can be reviewed and reused by younger states in the future. And for all states, it is imperative to improve worker productivity through education, skills development and artificial intelligence adoption. The solution to an ageing population is not to have more children (as some leaders have reportedly said), but to upskill the existing labour force and equip them with tools that make them more productive.
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