Economic Potential of Healthy Ageing in India

Discover the economic potential of healthy ageing in India, highlighting opportunities in healthcare, employment, and innovation for an ageing population.

Table of Contents

Context: The IMF’s World Economic Outlook (2025) highlights both the challenges and economic potential of healthy ageing in ageing societies like India.

Key Demographic Trends of Healthy Ageing in India

Metric	Data
Elderly Population (2031 Projection)	13.1% of the total population (up from 8.6% in 2011)
Annual Growth Rate of Elderly	3.28%
States with Higher Elderly Population	Kerala (12.6%), Goa (11.2%), Punjab (10.3%), Tamil Nadu, AP, HP

Workforce Participation in India Trends

Segment	2017–18 PLFS	2023–24 PLFS	Change
Overall (Age 65+)	21.4%	26.8%	↑ 5.4%
Rural Elderly LFPR	23.8%	31.2%	↑ 7.4%
Urban Elderly LFPR	16%	16%	No Change
Rural Elderly Women	–	↑ 10.5% pts
Rural Elderly Men	–	↑ 5.2% pts
Urban Elderly Men	–	Decline
Urban Elderly Women	–	Slight ↑

Economic Potential of Healthy Ageing in India: Key Challenges

Economic Drag: Ageing could reduce India’s GDP growth by 70 basis points (2025–2050).
Rising Costs: Increasing burden on healthcare and pension systems.
Gender Disparity: Female Labour Force Participation Rate (LFPR) is still below the global average (41.7% in 2023–24 vs 50% global).

Other Challenges

Involuntary Work: Many elderly people continue working out of economic compulsion rather than choice.
Sectoral Disparity: 81% of rural elderly are in agriculture/allied activities.
- Urban elderly are more engaged in diversified sectors (only 23% in agriculture).
Low Skill Development: Unemployed elderly spend zero time on learning; lack of upskilling pathways.
Limited Diversification: No increase in manufacturing/industrial jobs for the elderly; services sector involvement declining.

Opportunities for Healthy Ageing People in India

Area	Explanation
Healthier Older Cohorts	70-year-olds in 2022 showed cognitive levels of 53-year-olds in 2000.
Extended Work Life	Better health allows longer working years → higher productivity.
Economic Gain	Healthy ageing may add 60 bps to India’s GDP growth by 2050.
Technology & AI	AI used in retinal screening shows potential for preventive healthcare.
Pension Reforms	NPS promoted fiscal discipline; reverting to old schemes is unsustainable.
Female LFPR Boost	Targeting gender parity in the workforce is crucial for the demographic dividend.

India’s Initiatives for the Elderly Population

SACRED Portal (Senior Able Citizens for Re-Employment in Dignity) – A job platform connecting senior citizens with private employers for dignified re-employment opportunities.
SAGE (Seniorcare Aging Growth Engine) – Supports startups offering products and services for elderly care, aiming to build a robust elderly care ecosystem.
Elder Line (Toll-Free Number: 14567) – A national helpline providing free information, guidance, emotional support, and intervention in cases of abuse or neglect of elderly persons.
Integrated Programme for Older Persons (IPOP) – Offers financial assistance to NGOs for setting up and running old age homes, day care centres, and mobile medical units for elderly welfare.
Rashtriya Vayoshri Yojana (RVY) – Provides assistive devices (like walking sticks, wheelchairs, hearing aids) free of cost to elderly individuals below the poverty line.
Indira Gandhi National Old Age Pension Scheme (IGNOAPS) – Provides a monthly pension to elderly persons (60+ years) living below the poverty line, under the NSAP scheme.
Pradhan Mantri Vaya Vandana Yojana (PMVVY) – A pension scheme for senior citizens (60+) offering assured returns through LIC for 10 years.
Vayoshreshtha Samman – A national award conferred by the Ministry of Social Justice and Empowerment to honour senior citizens and institutions working for elderly welfare.
Maintenance and Welfare of Parents and Senior Citizens Act (MWPSC), 2007 – Mandates children or heirs to maintain their elderly parents and provides for the establishment of old age homes and tribunals for elderly protection.

Key Global Models That Harness The Potential Of The Elderly Workforce
Country	Model/Program	Key Features	Target Sector/Group	Impact
Japan	Senior Human Resource Centres (SHRCs)	➔ Part-time, flexible jobs for seniors ➔ Job matching ➔ Re-employment policies	Retirees in community & clerical work	High elderly LFPR (~25% for 65+); promotes social & economic participation
United States	Encore Careers Program	➔ Second careers with social impact ➔ Fellowships and mentoring programs	Retirees entering education, healthcare, NGOs	Utilises experience for social good; encourages purposeful ageing
Germany	Partial Retirement & Flexible Age	➔ Gradual workload reduction ➔ Pension incentives for extended work	Older employees in the formal sector	Smooth transition to retirement; knowledge retention in the workforce
Sweden	Delayed Retirement Incentives	➔ Higher pension for later retirement ➔ Inclusive workplace practices	Employees over 65	Encourages productive ageing; reduces pension burden
Singapore	Senior Employment Credit Scheme	➔ Wage subsidies to employers ➔ Raised retirement & re-employment age	Older workers (above 55–60)	Sustains employment of senior workers; reduces age-based job insecurity

Way Forward

Change Retirement Age: Align retirement age with rising life expectancy.
Utilize Experience: Retired professionals (e.g., ex-army) in security, strategy, and mentorship
Global Models: Japan’s SHRCs, US Encore Careers, Sweden’s flexible retirement
Workplace Innovation: Promote age-friendly and flexible work environments
Skilling & Education: Create opportunities for reskilling and lifelong learning
Social Security: Strengthen Atal Pension Yojana (APY) and National Pension System (NPS), Pradhan Mantri Shram Yogi Maan-Dhan (PM-SYM), MGNREGA, Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), Garib Kalyan Rojgar Abhiyaan (GKRA) etc.
Entrepreneurship: Encourage elderly-led small businesses and community initiatives.
Healthcare: Invest in preventive healthcare & AI-based medical screening.
Gender Equity: Improve gender equity in employment.