B.Sc. (Hons.

) Semester VI Examination 2021

(C.B.C.S. System)
Sarojini Naidu College for Women
West Bengal State University
Department of Economics

Registration No.: 1371821400596

Roll: 6212137 No.: 20722
Subject: ECOADSE06P
A project submitted for the partial fulfilment of the requirements
for the degree of Bachelor of Science
in the
Department of Economics
 CERTIFICATION PAGE

To Whom It May Concern

This is to certify that the project “Impact of Population Growth on Economic Development in India”

entitled for B.Sc. (Hons.) Semester VI Examination 2021 (CBCS system) under the West Bengal

State University has been completed by Mrittika Debnath (Roll: 6212137 No.: 20722 with Reg No.:

1371821400596) under my supervision and guidance.

(Asif Akhtar)
State Aided College Teacher
Department of Economics
Sarojini Naidu College for Women
 Acknowledgements

I thank my supervisor Asif Akhtar from my heart for guiding me through the project.
His tireless enthusiasm and skepticism were the main motivation for me during the
project. This project made me realize how being skeptical is so important for this kind
of theoretical works. And I am also thankful to him for the precious discussion we had
during this project.

I would also like to show gratitude to my professors, including Jayita Banerjee,

Shweta Mondal, Pritam Chatterjee, Swarup Roy. Their teaching style and
enthusiasm made a strong impression on me and I have always carried positive
memories of them with me.

I am also very thankful to my fellow classmates and friends Shreya & Prerona for giving
me their time for discussion during project. Discussions with them made me progress
faster.

Most importantly, none of this could have happened without my family. I am grateful
to my mother, my father and my brother for giving me the emotional and mental
support.

And I would really like to thank my friend Swarnendu for helping me to choose the
topic of my project and always believing in my potential.

Mrittika Debnath
B.Sc. (Hons.) Semester VI
Department of Economics
Sarojini Naidu College for Women
Contents
1. Abstract 1

2. Introduction 2-4

3. Reviews of Literature 5-6

4. Indian Scenario 7
Population growth and economic development. . . . . . . . . . 8-12

5. The Malthusian theory 13-14

6. Purpose of the Study & Objective 15

7. Data Source and Methodology 16

8. Data Analysis and Results 17

Trend Analysis of Population growth and GDP growth. . . .17-18
Top Ten Populous Countries in 2019 and in 2050. . . . . . . . .19
List of Countries Having Highest and Lowest
Total Fertility Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-21
Empirical Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22-24

9. Policy Recommendations 25

10. Conclusion 26

11. References 27-28

12. Appendix 29-30

 1

Abstract

Population growth is one of the fundamental factors that directly determine the supply

of human resources which are indisputably critical for production. Population growth

plays a pivotal role in country’s economic development. This paper examines the impact

of population growth on economic development in India by using regression analysis.

The result shows that the impact of population growth on economic development is

positive and significant in India. So, for India population growth is not the real problem.

The result also found that level of investment and unemployment rate also significantly

affect economic development in India. The government should not take strict policy

measures to reduce population growth rather the government should focus to increase

level of investment, foreign trade and employment rate to increase the level of economic

development in India.
 2

Introduction
In initial stages of human history as well as pre-history, the human population grew at

a snail’s speed till 17th century (i.e., .002% per year) with advancement in science,

agriculture and industry the population growth began to accelerate. It took mankind

more than a million years to reach the first billion around the year 1800. By the year

1900, a second billion was added and the twentieth century has added another 3.7

billion. The present world population is estimated at 6.8 billion. Every four days the

world population increases by one million. Effect of Population Growth Rate on

Economic development is one of the most debatable topics on earth. There are a lot of

theories which show that rise in population has negative effect on both economic growth

and development of a country. All these debates have started since Malthus proposed

his theory in the book “Essay on the Principle of Population”. He tried to find out the

reason for diminishing returns in most of the countries and he said that Population

growth is the major reason. His theory goes in as follows-

➢ Population increases by compounding.

➢ Food Production doesn’t get compounded.

➢ The new population will not get sufficient amount of food.

➢ Some adverse event (Starvation, crisis etc.) causes decline in the population.
 3

Then this leads to food production and population coming back to the equilibrium.

The relationship between population growth and growth of economic output has been

studied extensively (Heady & Hodge, 2009). Many analysts believe that economic

growth in high-income countries is likely to be relatively slow in coming years in part

because population growth in these countries is predicted to slow considerably (Baker,

Delong, & Krugman, 2005). Others argue that population growth has been and will

continue to be problematic as more people inevitably use more of the finite resources

available on earth, thereby reducing long-term potential growth (Linden, 2017).

Population growth affects many phenomena such as the age structure of a country’s

population, international migration, economic inequality, and the size of a country’s

work force. These factors both affect and are affected by overall economic growth. The

purpose of this article is to use long-term historical data and a review of both theoretical

and empirical work on the relationship among growth of population, total output and

per capita output to assess the implications of their evolution for economic inequality,

international migration policies, and general economic growth.

There are generally three different types of views on how population effects the

economic development of a nation. First, opposing the positive impact on economic

development. Second, supporting the negative effect of economic development. Third,

they believe that there is no relation between economic development and population

growth.
 4

Malthusian Population Trap is the main example for the theories which support negative

impact. There are a few other theories which support the positive impact stating the

importance of human capital on economic development in a country. This also rises

from the fact that any growth in the economic development needs human capital as its

main weapon and the rise in population can act as a provider of human capital.

According to this view population growth is the real strength and power of a country.

They also say that with higher population, we will have high labour force and this will

help for creating labour diversity in the nation and in turn will help for the rise in output

of a nation.

But there is a possibility of other way around too. This population rise can be a disaster

if we don’t use them properly. This is the major problem with most of the developing

countries face.

Both the stands of views present their arguments about population growth and economic

development. Each of the views is supported both theoretically and empirically.

 5

Reviews of Literature
Many researchers analysed the relationship between economic and demographic

variables in the past. Most of them have produced mixed results and they vary in their

conclusions. Professor Schultz used time series data of Sweden and produced the result

that 25% decline in fertility is explained by 50% decrease in infant mortality rate.

Xiujian Peng (2002) examined the relationship between rise in the productivity of

population growth and the labour divison. He found that the change is productivity is

not explained by the growth of population. But he found that division in labour has

increased the productivity. He also explained that the increase in population of a nation

helps the improvement in division of labour in a country.

Kothare (1999) investigated the relationships between population growth and economic

development of the Indian economy of 1988 to 1998. He concluded that India is one of

the world’s fastest growing economies, primarily due to the rise in population growth

creating a positive effect on its long run economic growth. India is now ranked one of

the top producers in agriculture and is a top nation in terms of GDP in a developing

country. In many cases, economists are correct in saying that population growth has a

positive effect on economic growth of a nation. In reality, economists might say, “If it

weren’t for its high populations India would still be a suffering developing nation.”
 6

Gill (1992) investigated the relationships between population growth and economic

development for the economy of India. He concluded that population growth is good

but up to some extent, while large population growth caused pressure on resources

within the economy. Large population growth has negative impact on economic

development.

Thirlwall (1993) investigated the relationship between population growth and economic

development with special reference to developing economies. The study found out that

the relationship between population growth and economic development is a complex

one, particularly concerning what the cause is and what the effect is. Rapid population

growth lowers per capita income growth in least developed countries (LDCs), yet there

are many ways in which population growth may be a stimulus to progress, and there are

many rational reasons why families in developing countries choose to have many

children.

According to Aguirre (1999) ―There are many debates going on the impact of huge

population growth of a nation. The approach for almost all of them is different and their

motivation is different too. A working knowledge of the parties and their underlying

philosophies will allow one to shift through the diverse rhetoric and hold them up to the

light of scientific data.

 7

Indian Scenario
In India, the population has increased from 682.5 million in 1980 to 1259.695 million

in 2015. Whereas the GDP in 1980 is 186 billion US Dollars and it has reached new

heights by getting almost close to 2 trillion dollars. Luckily in India, the rise in GDP

has outsmarted the Population growth and this led to a positive progress in the country.

But at the same time when we compare the progress of our nation with the other nations

which were in level with us 30 years ago, we did let ourselves down. Most of the studies

state that the continuous increase in the population of the nation has led to the slow

growth rate of nation. But they do agree that the increase in population has led to the

variety in labour. This variety in labour also led to the overall increase in productivity

of the nation. So, we just can’t blame the population growth to be the main reason to

slow the progress.

If we compare ourselves with the China, they also had a huge population rise but they

are able to cope up with that and they created one of the top most economies in the

world. The low literacy rate may be one of the reasons for the slow economic growth

of our nation and at the same time the unemployment in the nation also created a lot of

chaos in the country. The government is unable to live up to the expectations and they

didn’t create enough employment opportunities in the nation. So, we considered

unemployment rate of the country as a variable. Investment plays a very import role for

economic development. It increases the production by increasing capital formation. So,

we include investment as a variable to explain the economic development.

 8

Population growth and economic development

The consequences of population growth on economic development have attracted the

attention of economist ever since Adam Smith wrote in his “Wealth of Nations”. Adam

Smith wrote, “The annual labour of every nation is the fund which originally supplies

it with all the necessaries and conveniences of life”. It was only Malthus and Ricardo

who created an alarm about the effect of population growth on the economy. But their

fears have proved unfounded because population growth in Western Europe has led to

its rapid industrialization. It is sometimes said that a growing population helps in

economic development by providing an expanding market for goods. But it is an

erroneous view. Actually, over-population retards economic development. All efforts

at economic development under fast growing population turn out to be “Writing on sand

with waves of population growth washing away all that we have written”. Population

growth hampers the economic development in many ways-

1. Overuse of Natural Resources: Rapid population growth tends to overuse the

country’s natural resources. This is particularly the case where the majority of people

are dependent on agriculture for their livelihood. With rapidly increasing population,

agricultural holding become smaller and un-remunerative to cultivate. There is no

possibility of increasing farm production through the use of new land. Consequently,

many households continue to live in poverty. In fact, the population of India has
 9

increased from 102.7 crores in 2001 to 121.01 crores in 2011 which leads to overuse of

land, thereby endangering the welfare of future generations. India was an agricultural

nation for majority of the years in the past. The cultivable land and almost all other

things depend on irrigation. Supply of both cultivable land and the water for agriculture

became stagnant in India. But the population growth remained to be consistently high.

So this increased the pressure on other factors too. Population pressures are alarming

for arable land, forests and water resources. The size of arable land has decreased due

to population pressure, inadequate arable land reforms and inheritance patterns. Before

the mid of this century, India is projected to face a scarcity of cultivable land and other

resources. The projections also state that in another 150 years, India will face the

scarcity of electricity and this will also lead to chaos in the nation.

2. Per Capita Income: The effect of population growth on per capita income is

unfavourable. The growth of population tends to retard the per capita income in three

ways-

• It increases the pressure of population on land.

• It leads to increase in costs of consumption goods because of the scarcity of the co-

operant factor to increase their supplies.

• It leads to a decline in the accumulation of capital because with increase in family

members, expenses increase.

 10

These adverse effects of population growth on per capita income operate more severely

if the percentage of children in total population is high. Therefore, a large number of

children in the population entail a heavy burden on the economy, because these children

simply consume and don’t add to the national product.

3. Agricultural Development: In under-developed countries like India, people mostly

live-in rural areas. Agriculture is their main occupation. So, with population growth the

land man ratio is distributed. Pressure of population on land rises because land supply

is inelastic. It adds to disguised unemployment and reduces per capita productivity

further. As the number of landless worker increases, their wages fall. Thus, low per

capita, productivity reduces the propensity to save and invest. As a result, the use of

improved technology and other improvements on land are not possible. Capital

formation in agriculture suffers and the economy is bogged down to the subsistence

level. The problem of feeding growing population becomes serious due to acute

shortage of food products. These have to be imported which raises balance of payments

difficulties. Thus, the growth of population retards agricultural development.

4. Capital Formation: Growth of population retards capital formation. As population

increases, per capita available income declines. People are required to feed more

children with the same income. It means more expenditure on consumption and a further

fall in already low savings and consequently in the level of investment. Further, a

rapidly growing population by losing incomes, savings and investment compels the
 11

people to use a low level of technology which further retards capital formation.

5. Employment: A rapidly increasing population plunges the economy into mass

unemployment and under-employment. As population increases, the proportion of

workers to total population rises. But in the absence of complementary resources, it is

not possible to expand jobs. The result is that with the rise in labour force,

unemployment and under-employment increases. A rapidly increasing population

reduces income, savings and investment. Thus, capital formation is retarded and job

opportunities are reduced, thereby increasing unemployment. Moreover, as the labour

force increases in relation to land, capital and other resources, complementary factors

available per workers decline. As a result, unemployment increases. India has a backlog

of unemployment which keeps on growing with a rapidly increasing population. This

tends to increase the level of unemployment manifold as compared with actual increase

in labour force.

6. Environment: Rapid population growth leads to environmental damage. Scarcity

of land due to tropical forests. It leads to over grazing and cutting of forests for

cultivation leading to severe environmental damage. Moreover, the pressure of rapid

growth of population forces people to obtain more food for themselves and their

livestock. Given the limits on extensive cultivation, there will be pressure to increase

chemical fertiliser application substantially. As a result, they over-cultivate the semi-

 12

arid areas. The demand for water will also increase significantly. This leads to

desertification over the long run when land stops yielding anything. Besides, rapid

population growth leads to migration of large numbers to urban areas with

industrialization. This results in severe air, water and noise pollution in cities and

town. Moreover, as urban population in different states continues to increase rapidly,

the urban environmental quality might suffer unless concrete steps are undertaken on a

large scale to tackle the environmental problems.

7. Social Infrastructure: Rapidly growing population necessitates large investments

in social infrastructure and diverts resources from directly productive assets. Due to

scarcity of resources, it is not possible to provide educational, health, medical, transport

and housing facilities to the entire population. There is over-crowding everywhere. As

a result, the quality of these services goes down. To provide these social infrastructures

requires huge investment.

 13

The Malthusian Theory

The Malthusian Theory of Population is a theory of exponential population growth and

arithmetic food supply growth. Thomas Robert Malthus, an English cleric, and scholar,

published this theory in his 1978 writings, An Essay on the Principal of Population.

The theory propounded by Malthus can be summed up in the following

propositions:

(1) Food is necessary to the life of man and, therefore, exercises a strong check on

population. In other words, population is necessarily limited by the means of

subsistence (i.e., food). (2) Population increases faster than food production. Whereas

population increases in geometric progression, food production increases in arithmetic

progression. (3) Population always increases when the means of subsistence increase,

unless prevented by some powerful checks. (4) There are two types of checks which

can keep population on a level with the means of subsistence. They are the preventive

and a positive check.

The Preventive checks exercise their influence on the growth of population by bringing

down the birth rate. Late marriage and self-restraint during married life are the examples

of preventive checks applied by man to limit the family. Positive checks exercise their
 14

influence on the growth of population by increasing the death rate. They are applied by

nature. The unwholesome occupations, hard labour, exposure to the seasons, extreme

poverty, bad nursing of children, common diseases, wars, plagues and famines ire some

of the examples of positive checks. They all shorten human life and increase the death

rate. Malthus recommended the use of preventive checks if mankind was to escape from

the impending misery. If preventive checks were not effectively used, positive checks

like diseases, wars and famines would come into operation. As a result, the population

would be reduced to the level which can be sustained by the available quantity of food

supply.

Malthusian Trap: The Malthusian Trap (or “Malthusian Population Trap”) is the idea

that higher levels of food production created by more advanced agricultural techniques

create higher population levels, which then lead to food shortages because the higher

population needs to live on land that would have previously used to grow crops. Once

the population exceeds what food supplies can support, this supposedly creates a

Malthusian crisis with widespread famine as well as rampant disease. This ends up

decreasing the population to earlier levels.

The reality, however, has been that population growth has not itself created the crisis

that Malthus predicted. Our empirical result also disproven the Malthusian Trap, it

shows there is a positive relationship between population growth and economic

development in India.
 15

Purpose of the Study & Objective

Much of modern Development Economics on population problems have centered on

what could be the optimum size and its impact on economic development. This line of

reasoning emanated from the debate triggered by the Malthusian population growth

theory which basically argues that food production cannot keep pace with the demands

of a growing population. However, the applicability of this argument is not universal

especially given the fact that in industrialized economies, technological advances have

spurred increases in agricultural production which ensures food security for citizens.

Population growth in India shows a general downwards trend as shown in Fig1 below,

another important issue that is unique for India is that there are abundant resources of

which most of these resources are currently lying idle; which if properly used can spur

economic development. India is experiencing increasing level of investment; more

investors want to invest because there is a good market size and availability of cheap

labour supply. There is need to conduct an empirical investigation into the population

growth-economic development relationship in order to properly advise the government

and other relevant stakeholders on the necessary steps to take with regards to population

growth dynamics in India.

The objective of this study is to analyse the impact of population growth on economic

development in India by using regression analysis and also prescribe suitable policy

recommendations in these regards.

 16

Data Source and Methodology

The source of data used in the present study is secondary. The data is taken mainly from

World Bank data base and Reserve Bank of India (RBI) data base. The data set has been

taken from 1961 to 2020.

The methodology followed in this project is basically charts and diagrams to analyse

the trend of population growth and GDP growth in India. Apart from using charts and

diagrams we have also used Ordinary Least Square method (OLS) by using Advance

Excel to analyse the effect of population growth on economic development. This project

used the following multivariable regression model.

 Y = b0 + b1*POP + b2*UN + b3*INV + u ………………… (1)

Where Y is economic development as proxied by GDP growth (annual percentage),

POP is population growth as measured in annual percentage, UN is unemployment rate

measured in percentage, INV is total level of investment of India measured as a

percentage of GDP, u is the stochastic error term which include all the factors effecting

the economic development but not included in the regression equation and bi are the

unknown coefficients or parameters to be estimated.

 17

Data Analysis & Results

An attempt to analyse the secondary data taken on population growth and GDP

growth are as follows.

Trend Analysis of Population growth and GDP growth

Following fig shows the population growth of India from 1961-2020.

Fig: 1, Data Source: World Bank Data Base

In general, there is overall downward trend of population growth from 1961 to 2020 in

India. In particular the population growth was increasing from 1961 to 1982; the fig

also shows that the maximum population growth is recorded as 2.33% at 1982.

However, after 1982 the population growth decline significantly and continue to decline

in 2020. The minimum population growth is recorded as 0.99% at 2020

 18

Fig: 2, Data Source: World Bank Data Base

The above fig shows the trend of GDP growth of India from 1961 to 2020. In general,

the trend shows that economic growth was very volatile during the period under study,

it did not maintain any trend. In particular the maximum growth rate was recorded as

9.63% in 1988 and the minimum growth rate was recorded as (-7.96%) in 2020 due the

breakdown of covid-19 pandemic.

 19

Top Ten Populous Countries in 2019 and in 2050

The following table shows the top ten populous countries in the world in 2019 from

Population Reference Bureau 2020.

Country (2019) Population (million) Country (2050) Population (million)

China 1402.38 India 1663.05
India 1400.1 China 1366.06
United States 329.88 Nigeria 401.32
Indonesia 271.74 United States 385.69
Pakistan 220.94 Pakistan 347.81
Brazil 211.81 Indonesia 328.75
Nigeria 206.14 Brazil 232.93
Bangladesh 169.81 Bangladesh 215.49
Russia 146.73 Congo, Dem. Rep. 212.08
Mexico 127.79 Ethiopia 208.56
Table: 1, Data Source: Population Reference Bureau 2020

From the above table we can see China had the highest population size of approximately

1402.38 million and India having the second highest population size of approximately

1400.1 million followed by China. The United States ranked third with population of

329.88 million people. According to population Reference Bureau Indonesia was

fourth, Pakistan was fifth, Brazil was sixth, Nigeria was seventh, Bangladesh was

eighth, Russia was ninth and Mexico was tenth with 271.74 million, 220.94 million,

211.81million, 206.14 million, 169.81 million, 146 million and 127.79 million of

people. This shows that there are more people in Asia as compared to other part of the

world.

Population growth projection shows that by 2050 India will be most populous country

with estimated population 1663.05 million. However, China’s population is expected

 20

to decrease to 1366.06 million of people, this is because of strict policy measures

taken by Chinese communist government. By 2050, the United States will have

385.69 million people but will take the fourth rank in terms of population size. Nigeria

had seventh largest population in 2019 but by 2050 Nigeria will take the third place

with population size 401.32 million of people.

These estimates shows that Asia will still have larger population as compare to other

part of the world but Africa’s population growth is also poised to increase as indicated

by the projected increase in population in Nigeria, DRC and Ethiopia with population

size 401.32 million, 212.08 million and 208.56 million of population.

List of Countries Having Highest and Lowest Total Fertility Rates

The total fertility rate (TFR), sometimes also called the fertility rate, shows the average

number of children born to women during their reproductive years. Developed countries

usually have a significantly lower fertility rate, often correlated with greater wealth,

education, urbanization or other factors. Mortality rates are low, birth control is

understood and easily accessible. In underdeveloped countries, on the other hand,

families desire children for their labour and as caregivers for their parents in old age.

Fertility are also higher due to the lack of access to contraceptives, stricter adherence to

traditional religious beliefs, generally lower levels of female education, and lower rates

of female employment in industry. The total fertility rate for the world has been

declining very rapidly since the 1990s. The following table shows the highest and
 21

lowest total fertility rate in 2019 for various countries from Population Reference

Bureau 2020.

Highest Total Fertility Rates Lowest Total Fertility Rates

Niger 7.1 China, Macao SAR 0.9
Mali 6.3 Korea, South 0.9
Congo, Dem. Rep. 6.2 Puerto Rico 1
Angola 6.1 Taiwan 1
Somalia 6 Andorra 1
Chad 5.9 Singapore 1.1
Benin 5.7 China, Hong Kong SAR 1.1
Nigeria 5.3 Moldova 1.2
Burundi 5.3 Malta 1.2
Burkina Faso 5.2 Japan 1.3
Table: 2, Data Source: Population Reference Bureau 2020

In 2019 Niger has the highest TFR of 7.1 followed by Mali whose total fertility rate is

6.3. In fact, it can be observed from the table above only African countries are ranking

very high in terms of TFR. However, the table also shows that Asian countries (Macao

SAR, South Korea, Singapore, Taiwan, Hong Kong SAR and Japan), although they

have relatively lower fertility rates as compared to African countries. India’s fertility

rate is declining, is 2.2 in 2019 nearing the replacement rate of 2.1, which implied

India’s population will be stabilized in future.

 22

Empirical Results

The estimated results of equation 1 have been shown in the following table.

Table: 3

From the above regression results, all the variables are significant at 5% level of

significance, which implied that Population Growth, Unemployment Rate and

Investment significantly explains the economic development. The coefficient of

determination is a goodness of fit measure of a regression equation, which tells how

well the regression equation fits the observed data. Here the value of the coefficient of

determination is 0.6145, implied 61.45% variation in GDP growth is explained by the

 23

regression equation, indicate the model is good fitted the observed data. The estimated

regression equation is given below.

 Y = 34.28 + 2.96*POP – 6.73*U + 0.17*INV

The coefficient of population growth is positive and is statistically significant at 5%

level of significance. This means that an increase in population growth will lead to

positive economic development in India. Contrary to Malthusian theory of population

these results conform the pessimistic view of orthodox researchers, who argued that

population growth is not a real problem rather an opportunity for economic growth.

Therefore, given this positive relationship between population growth and economic

development, it implies that if population growth increases in India, it can lead to an

increase in the need for goods and services and also boost technological advancement.

Increase in population growth also means more labour supply for industrialization.

These results confirm previous studies such as Kothane (1990), Asongu (2011), Thuku

et al (2013), Ali et al (2013), Nwosu et al (2014) and Tartiyus et al (2015). However,

our results on the other side of the same coin, also contradict the findings of other

previous studies who argue that population growth is harmful to economic growth e.g.,

Albatel (2005), Adetiloye & Adeyemo (2012), Wako (2012), Zhang (2015) and Ali et

al (2015).
 24

Investment has a positive sign and is statistically significant at 5% level of significance.

This means that an increase in the level of investment will lead to improvement in

economic development in India. This is acceptable because investment is an important

source of economic development through capital formation. In fact, FDI is part of

investment and is an indisputable source for technology spill-overs as well as efficiency

and growth for an economy as already highlighted by various previous researchers such

as Anderson & Gonzalez (2013) and Bayraktar (2011). The results are consistent with

previous research work done on the same topic. Unemployment rate has negative sign

and is also statistically significant at 5% level of significance. This means that an

increase in the rate of unemployment increases the economic growth decreases. The

result is consistent with the economic theory as well as the previous research work done

in this topic.
 25

Policy Recommendations

Policy Recommendations emanating from this study are as follows.

i) The government of India should not put strict policies or schemes to reduce

population. Since India is experiencing downward trend of population growth

and population growth is positively related to economic development. So,

strict population growth reduction policies not needed.

ii) The government should maintain a stable political and economic landscape

in order to attract more Investment. As the level of investment increases level

of development also increases.

iii) The government should support or offer incentives to exporters. However,

such incentives should be quite significant, because export increase the GDP

as well the economic development of a country.

iv) The government of India ought to intervene in the financial markets by

reducing interest rates because high commercial lending rates discourage

investment and economic development at large.

v) Increased population growth implies increased demand for both local and

foreign products. Countries can utilize the demand for economic

development through development of foreign products substitutes and

producing more for local demand.

 26

Conclusion

The paper analyses the impact of population growth on economic development in India.

Apart from population growth it also includes unemployment rate and level of total

investment to get a good empirical result. It used thirty years of annual data from 1991

to 2020 of four variables viz. GDP growth rate, population growth rate, unemployment

rate and investment. It used OLS technique to empirically examine the impact of

population growth on economic development in India. The effect of population growth

on economic development is still an open question, there are basically two aspects. The

first and probably most prominent one, pioneered by Malthus, is pessimistic, arguing

that population growth is a real problem for economy, while the second one is

optimistic, arguing that population growth is not a real problem at all, rather an

opportunity for economic development.

This paper empirically claims that population growth has positive impact on economic

growth in India. It concluded that population growth is not a real problem rather an

opportunity for economic development. So, the government of India should not take

any strict policy measures to reduce population rather the government should take

necessary steps to reduce unemployment, to increases level of investment both domestic

as well as foreign and to increase foreign trade to increase the economic development.
 27

References

• Agarwal Shubhi, 2014, “Impact of India’s Population Growth on Economic

Development”, Indian Journal of Research, (Volume 3).

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Appendix

The following data set used to analyse the trend of population growth and GDP

growth, represented in Fig1 and Fig2.

 30

The following data used for regression analysis.

Source: World Bank Data Base