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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is a former governor of the Reserve Bank of India
Over the past year, the chief ministers of two South Indian states — Andhra Pradesh and Tamil Nadu — have been urging their people to have more children. In a country long concerned that rapid population growth is undermining development, such appeals are ironic. But behind this unusual call lies a deepening grievance: that southern states are being penalised, both economically and politically, for their success in population control.
The economic roots of this grievance lie in the formula used to distribute financial resources from New Delhi to the states. These transfers are heavily weighted by population. Prosperous southern states like Tamil Nadu contribute more to the national tax pool but receive less in return — less than a rupee for every rupee sent. In contrast, northern states with higher populations and lower per capita incomes often receive more than they contribute.
While some level of cross-subsidisation is inevitable — indeed, essential — in any federal system to promote balanced development, southern states are beginning to question whether they are being unfairly burdened. The issue is not merely financial; it strikes at the heart of federal equity. When better-performing states feel they are being punished for their efficiency, the compact of co-operative federalism begins to fray.
The political dimension of this rift — linked to the delimitation of parliamentary constituencies — is even more contentious. Indian law requires that constituency boundaries be redrawn after each decennial census to reflect population changes. However, this exercise was deferred for 25 years in 1976 and again in 2001 to avoid disincentivising states from pursuing population control.
This has created a serious imbalance. Today, some constituencies have over three million voters while others have fewer than a million. Although absolute equality of voters per constituency is not practical, the value of a vote varying widely across the country runs counter to the democratic principle of equal representation.
The next census, scheduled for 2027, could trigger a long-postponed delimitation. States that have effectively curbed population growth — primarily in the south — now face the prospect of losing parliamentary seats and, with that, political influence.
In essence, the southern states feel doubly disadvantaged: they subsidise the less developed north economically and may soon lose ground politically.
The central government under Prime Minister Narendra Modi could, in theory, defer delimitation again. But this appears unlikely. The ruling Bharatiya Janata party draws substantial political strength from the populous Hindi heartland of the north and may see delimitation as a way to consolidate that base. While home minister Amit Shah has reassured southern states that they will not lose seats, he has not guaranteed that the number of seats in northern states will not increase. This ambiguity has only deepened southern anxieties.
Allowing this debate to escalate unchecked would be unwise. India still faces a serious population challenge. At 1.45bn, the country’s population already exceeds the ecological carrying capacity of its land and resources.
The solution to uneven population distribution across the country is not for the more successful states to reverse their progress and boost fertility. Instead, the focus should be on encouraging internal migration to better balance population pressures through improved housing, urban infrastructure, language support and inclusive labour policies.
India aspires to become a developed nation by 2047, the centenary of its independence. Achieving that goal will require sweeping structural reforms in governance, productivity and inclusion. But these reforms cannot be driven by New Delhi alone — they need the trust, co-operation and participation of all states.
