Economic Implications of Ageing Societies

The "World Economic Outlook" by the International Monetary Fund highlights both the challenges and potential economic benefits associated with ageing societies. While traditionally viewed through the lens of fiscal strain, the report offers an optimistic view on the economic dividends of healthy ageing.

Impact on India's GDP Growth

• Ageing could reduce India’s annual GDP growth by 70 basis points from 2025 to 2050.
• This decline is expected to become more pronounced as India's demographic milestone passes in the latter half of the century.

Positive Aspects of Healthy Ageing

• Newer generations of older adults exhibit better physical and cognitive health compared to previous ones.
• A sample of 41 countries showed that a 70-year-old in 2022 had similar cognitive abilities to a 53-year-old in 2000.
• Healthy ageing may extend working lives and boost productivity.
• Even with ageing populations, healthy ageing could add 40 basis points annually to global GDP growth by 2050.
• For India, these gains could increase annual output growth by 60 basis points, offsetting some negative impacts of ageing.

Trends in Health and Longevity

Longevity clinics and the trend towards reversing ageing are gaining popularity, highlighting an increase in proactive health management.

Strategies for Supporting Demographic Transition

• Investing in health care and expanding job opportunities for older adults.
• Addressing gender disparities in the workforce.
• Leveraging technology to improve health care access, particularly AI.
• Aligning retirement ages to life expectancy improvements.

Gender Gap in Labor Force Participation

• India's female labor force participation rate (LFPR) rose from 23.2% in 2017-18 to 41.7% in 2023-24, but still trails behind the male LFPR of 77.2% and the global female average of 50%.

Pension Reforms

Reformation of pension systems is vital, with a shift towards the National Pension System (NPS) being one of the significant reforms. However, some states have reverted to the older scheme, posing future management challenges.

Role of Technology in Health Care

• AI can enhance preventive health care practices. For example, AI tools have been used in India to screen millions of retinal images for diabetic retinopathy.
• Such technological innovations should be incorporated into national health strategies, especially in resource-limited rural areas.