Ageing India to land on corporate India''s platter

04 December 2006

The rapid ageing of the Indian workforce in the future will place the onus of providing post retirement and supplementary benefits on employers, says global HR firm Watson Wyatt. V Jagannthan reports

Chennai: India's population is steadily ageing. And, that is beginning to worry corporate India. According to the US census bureau's projection, 32.8 per cent of the entire Indian population will be over 50 and above by 2050. That means that the number of people who are 50 or more, will cross half a billion by 2050 — up from 141 million in 2000.

The reasons are simple — declining birth rates coupled with a higher life span.

In India, life expectancy at birth was only 57.2 years in 1990 but is now expected to increase to 77 years by 2050. On the other hand, the birth rate will decline from 31 babies born per thousand in 1992 to 13 babies per thousand by 2050, states the US census bureau.

The change in demographics has serious consequences for the Indian economy and, of course, the corporate sector. The major impact will be on the healthcare and retirement benefits, which are expected to increase. Therfore, companies can no longer consider these benefits as optional facilities for employees.

According to a report prepared by global HR consultants firm Watson Wyatt, a well-designed retirement and healthcare scheme will greatly enhance the ability of companies in India to attract and retain the most qualified and competent employees. As global competition intensifies amongst companies, human capital strategies that take into account demographic changes will be crucial to ensuring sustained corporate profitability.