South Indian state Andhra Pradesh launches third-child incentives amid ageing population

BENGALURU – Andhra Pradesh has become the first state in the world’s most populous nation to introduce a policy encouraging families to have more children.

The southern state is among the few developed regions in India concerned about the declining fertility rates among its highly literate population and is the only one to incentivise larger families.

Andhra Pradesh’s current total fertility rate (TFR) is 1.5, down from three in 1993. India’s average TFR is around two children per woman. A TFR of 2.1 is required to maintain a stable population.

From April 1, the Andhra Pradesh state government will give 25,000 rupees (S$340) to parents who have a third child. The Poshan-Shiksha-Suraksha (Nutrition-Education-Protection) package will also give 1,000 rupees in monthly assistance for five years and free education for the third child up to age 18. 

“We are no longer a high-fertility state. The situation requires an entirely new policy playbook” to raise the state’s TFR from 1.5 to an optimal level of 2.1, said the state’s Chief Minister N. Chandrababu Naidu. 

Other new incentives include subsidised in-vitro fertilisation services, 12 months of maternity leave and two months of paternity leave for the third child or subsequent children. Those with two or fewer children in Andhra currently get six months of maternity leave and 15 days of paternity leave.

Placing women’s welfare and right to work at the centre of the policy, the state will construct hostels for working women and childcare centres. It already provides 15,000 rupees per child to women with school-going children to ease the financial burden on families and encourage population growth. 

India has more than 1.45 billion people today and is projected to peak at 1.72 billion by 2062, according to the UN. Despite its large population, India’s fertility rate has dropped below the replacement level of 2.1, indicating an upcoming demographic shift towards an ageing population.

The shift is being led by at least 10 of India’s most developed states that show declining fertility rates.

Sikkim in the north-east records the lowest TFR, around 1.1 to 1.2, Delhi’s is 1.2, West Bengal and Tamil Nadu’s stand at 1.3, and Kerala, Karnataka and Telangana’s at 1.5.

Social progress, better healthcare

Studies attribute the lower fertility rate in these states to social progress, better healthcare, delayed marriage and higher female education and work participation, which lead people to prioritise smaller families for a better quality of life. This mirrors the lower childbirth rates in most East Asian countries and Europe. 

In some cases, low fertility “also reflects constraints like delayed childbearing, rising infertility, economic pressures, lack of childcare and limited support for working parents, especially mothers”, said Ms Poonam Muttreja, executive director of the Population Foundation of India.

Meanwhile, higher fertility rates, like 2.4 in Uttar Pradesh and Bihar, are attributed to poverty, less education among women, economic insecurity, cultural or religious conservatism, lack of access to healthcare and lack of awareness about family planning.

A low fertility rate poses several problems for governments and society, especially when it falls sharply, analysts said. 

“Once the TFR starts declining, it won’t stop,” said Dr Ali Mehdi, a consultant at India Primary Healthcare Support Initiative, a consortium of schools of public health and government agencies. 

“If your working-age population shrinks and the aged population rises, the government’s social security and healthcare expenses go up, and the younger population also becomes less productive as it must take care of the elderly.”

Around 10 per cent of India’s population – about 149 million – are aged 60 and above.

The UN defines a country as “ageing” when the share of people aged 65 and above exceeds 7 per cent.

According to the Longitudinal Ageing Study of India 2021, all southern states, along with Himachal Pradesh and Punjab in the north, have higher elderly populations than the national average.

The elderly make up more than 18 per cent of Kerala’s population, the highest proportion in the country today.

In Andhra Pradesh, the figure is 12 per cent, and Mr Naidu said this could rise to 23 per cent by 2047. 

“The fall in fertility rate poses a threat to economic growth with a fall in the number of young working people, and the state will face ageing problems, like in Japan, South Korea and Italy,” he added.

Ill-health in the elderly

The decline in fertility rates in some parts of India, along with increasing life expectancy of approximately 69 to 72 years, has created new healthcare challenges, according to NITI Aayog, the government’s policy think-tank.

“India’s ageing population is sicker than in other countries – (the elderly are) predisposed to chronic, non-communicable diseases due to health and nutritional disadvantages at a younger age,” Dr Mehdi said. 

Three-quarters of India’s elderly suffer from chronic conditions such as cardiovascular disease, hypertension, cancer, bone and joint disease, diabetes and chronic lung disease. Only 18 per cent have health insurance. 

“As most Indians don’t have much savings or pension, the government will have to take care of most of the elderly for years – a huge expense,” Dr Mehdi added. 

Shrinking political influence

Another reason for policies like Andhra Pradesh’s is that slowing population growth might also mean shrinking political influence in Parliament.

If India’s parliamentary seats are reallocated based on the 2027 census, less populous states might end up having fewer representatives than northern states such as Uttar Pradesh and Bihar.

Leaders in South India have, in the past few years, demanded that they not be punished for the successful implementation of population control policies and improved education opportunities for women.

Tamil Nadu Chief Minister M.K. Stalin, in March 2025, urged young couples in the state to “give birth to a child immediately” to secure greater representation in Parliament, but the state has not rolled out any incentives.

It is not clear, however, if Andhra Pradesh’s new incentives can reverse its declining fertility rate.

“International experience shows that financial incentives alone have very little impact on fertility decisions,” said Ms Muttreja, noting that to change behaviour in a sustained way, governments, employers and society must also address the structural realities through childcare systems, parental leave and greater participation of men in caregiving.

Low fertility reflects the reality that “women are carrying a disproportionate burden of unpaid care work”, and that for them, having children “can come at the expense of their careers, financial independence and personal ambitions”, she added.

“We need to move away from trying to ‘push’ fertility up or down. Instead, the focus should be on enabling reproductive choice, supporting those who want children and those who do not. When people are able to realise their aspirations freely, fertility tends to reflect their desired family size.”