State of the World Population 2025 Report

Source: UNFPA (United Nations Population Fund)
Context:
According to the UNFPA’s “State of the World Population 2025” report, India’s population reached 1.4639 billion (146.39 crores) as of April 2025. The Total Fertility Rate (TFR) has dropped to 1.9, which is below the replacement level of 2.1, indicating a shift in demographic trends.

Key Highlights of the Report:

1. Global Population Trends:
   • The world population has reached 8.2 billion.
   • Though growth has slowed, significant inequalities exist between high-income and low-income nations.
2. Redefining the Fertility Crisis:
   • The real issue is unmet fertility goals, not merely overpopulation or underpopulation.
   • Many people are denied the freedom to decide if, when, and how many children to have.
3. Reproductive Rights & Autonomy:
   • Emphasis on the individual’s right to make choices regarding childbearing, contraception, and timing.
4. Demographic Dividend Opportunity:
   • Over 60% of the global population is in the 15–64 age group, providing a productive workforce advantage.
5. Rising Ageing Population:
   • The global elderly population (65+) is growing rapidly, demanding reforms in healthcare and pensions.
6. Youth Bulge in LMICs:
   • Low- and Middle-Income Countries (e.g., India, Nigeria) have a large youth population, offering untapped potential.
7. Gender and Fertility Gaps:
   • Women’s education and empowerment impact fertility rates.
   • Persistent gaps in healthcare and family planning access affect fertility patterns.

Understanding Fertility:

• Definition:
  Fertility is the actual number of children born to a woman during her reproductive years (15–49 years).
• Total Fertility Rate (TFR):
  The average number of children per woman. A TFR of 2.1 is considered the replacement level.
• Determinants of Fertility:
  Influenced by:
  • Education
  • Healthcare Access
  • Cultural Norms
  • Economic Conditions
  • Availability of Family Planning Services

Global Fertility Issues:

1. Declining TFR in Developed Nations:
   • Countries like Japan, Italy, South Korea have TFRs below 1.5, raising ageing population concerns.
2. High Fertility in Fragile States:
   • Sub-Saharan Africa has TFRs above 4, leading to strain on healthcare, education, and resources.
3. Reproductive Inequality:
   • Millions lack access to contraceptives, maternal healthcare, and reproductive autonomy.

India’s Demographic Status – 2025 Report:

• Population Size:
  1.4639 billion (146.39 crore), projected to peak at 1.7 billion in the next 40 years before stabilizing.
• TFR Status:
  1.9 – Below the replacement level, showing a demographic transition.
• Demographic Breakdown:
  • 0–14 years (Youth): 24%
  • 10–19 years (Teenagers): 17%
  • 15–64 years (Working Age): 68%
  • 65+ years (Elderly): 7%
• Life Expectancy (2025):
  • Men: 71 years
  • Women: 74 years
• Unrealized Fertility:
  • A segment of the population cannot achieve their desired family size due to inadequate healthcare and services.

Way Forward:

1. Census Completion by 2027:
   • A comprehensive census is needed to update population data and revise socio-economic policies.
2. Enhancing Reproductive Healthcare:
   • Improve access to family planning, maternal services, and education, especially for women.
3. Balancing Youth and Elderly Needs:
   • Develop policies addressing both youth skilling and elderly welfare for long-term demographic stability.

Conclusion:

India stands at a critical demographic juncture. With a declining TFR and a large working-age population, the focus must now shift from merely managing population numbers to ensuring quality of life, reproductive rights, and policy preparedness for a sustainable demographic future.

Previous Year Question (UPSC – 2021):

Q. Discuss the main objectives of Population Education and point out the measures to achieve them in India in detail.

[1. Simple-Type Question]

Q. What is India's Total Fertility Rate (TFR) in the year 2025 as stated in the “State of the World Population 2025” report?

(a) 2.1
(b) 2.5
(c) 1.9
(d) 1.7
✅ Answer: (c) 1.9
📝 Explanation: According to the UNFPA report, India’s Total Fertility Rate (TFR) in 2025 is 1.9, which is below the replacement level of 2.1. This indicates a demographic transition.

[2. List-Type Question]

Q. Which of the following factors influence the fertility rate?

1. Women's education
2. Cultural norms
3. Access to healthcare services
4. Space research

Use the code given below:
(a) Only 1, 2, and 3
(b) Only 2 and 4
(c) Only 1 and 4
(d) All 1, 2, 3, and 4
✅ Answer: (a) Only 1, 2, and 3
📝 Explanation: Fertility rate is influenced by education, health services, cultural beliefs, and economic status. Space research is irrelevant in this context.

[3. Match-the-Following Type]

Q. Match the following correctly:

Codes:
(a) A-2, B-1, C-3
(b) A-1, B-2, C-3
(c) A-3, B-2, C-1
(d) A-2, B-3, C-1
✅ Answer: (a) A-2, B-1, C-3
📝 Explanation: Japan has a TFR below 1.5, Sub-Saharan Africa’s TFR is above 4, and India’s TFR is 1.9.

[4. Assertion-Reason Type Question]

Q.
Assertion (A): India's TFR is below the replacement level.
Reason (R): Most Indian women now prefer fewer than two children due to increased education and empowerment.

Choose the correct option:
(a) Both A and R are correct and R is the correct explanation of A.
(b) Both A and R are correct but R is not the correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
✅ Answer: (a) Both A and R are correct and R is the correct explanation of A.
📝 Explanation: A major reason for India’s declining TFR is the rising education and empowerment of women, leading to smaller family preferences.

[5. Analytical-Type MCQ]

Q. As per the “State of the World Population 2025” report, which of the following conclusions are correct?

1. India’s population in 2025 is 1.4639 billion.
2. India’s population is expected to reach 1.7 billion in the next 40 years.
3. The elderly population (65+) in India accounts for 24% of the total population in 2025.

(a) Only 1 and 2
(b) Only 1 and 3
(c) Only 2 and 3
(d) All 1, 2, and 3
✅ Answer: (a) Only 1 and 2
📝 Explanation: Statements 1 and 2 are correct. However, the elderly (65+) population is only 7% in 2025, not 24%. Hence, statement 3 is incorrect.

FDI Paradox: India’s Investment Crossroads

Syllabus: Economy
Source: Economic & Political Weekly (EPW)

Context:

According to the RBI Annual Report 2024–25, gross Foreign Direct Investment (FDI) inflows rose by 13.7%. However, long-term net FDI inflows have halved, largely due to increased disinvestments. India’s net FDI dropped drastically to $0.4 billion in 2024–25 from $44 billion in 2020–21, presenting a paradox of rising inflows but declining investment impact.

What is FDI?

• Definition:
  Foreign Direct Investment (FDI) refers to the investment made by a foreign entity into Indian businesses or sectors, typically involving equity acquisition, joint ventures, or control in management.

FDI’s Role in the Indian Economy:

• Capital Access: FDI supplements domestic savings and funds infrastructure, startups, and industrial development.
• Technology Transfer: FDI brings in advanced technology, innovation, and managerial skills.
• Employment Generation: It creates both direct and indirect employment in various sectors.
• Improved Balance of Payments (BoP): Stable FDI helps bridge the current account deficit and boosts forex reserves.

Recent Trends in FDI Inflows (RBI 2024–25 Report):

1. Stagnant Long-Term Growth:
   • Gross inflows rose by 13.7% in 2024–25.
   • However, average growth over the past 4 years is just 0.3%.
2. Rising Disinvestments:
   • Repatriations have surged at an average 18.9% annually post-COVID.
   • Net FDI has fallen to $29.6 billion.
3. Distorted Investment Composition:
   • Major inflows come via Singapore (15%) and Mauritius (~10%), indicating financial rather than productive investments.
4. Decline in Manufacturing FDI:
   • Share of manufacturing in total FDI dropped to 12%, down from earlier peaks.
5. Rise in Outward FDI:
   • Indian investments abroad surged to $29.2 billion in 2024–25 — almost three times higher than five years ago.

Key Issues in India’s FDI Scenario:

1. High Repatriation Rates:
   • Disinvestments now form 63.5% of gross inflows — up from <1% in the early 2000s.
2. Short-Term Capital Focus:
   • Surge in private equity and venture capital inflows focused more on returns than production.
3. Sectoral Imbalance:
   • Withdrawal of FDI from critical sectors like manufacturing and IT services.
4. Geopolitical Shifts:
   • Reduced inflows from US, UK, Germany, leading to fall in innovation-linked investments.
5. Data Discrepancy:
   • UNCTAD reports FDI numbers that are up to 60% lower than RBI data, suggesting possible overreporting.

Way Forward:

1. Ensure Policy Stability:
   • Transparent and consistent FDI policies are crucial to build long-term investor confidence.
2. Promote Quality FDI:
   • Focus on manufacturing, green technology, R&D, rather than speculative capital.
3. Reform Domestic Ecosystem:
   • Labour laws, land acquisition processes, and business regulations must align with global investor expectations.
4. Rationalize Tax Treaties:
   • Address round-tripping by reviewing Double Taxation Avoidance Agreements (DTAAs) with financial hubs.
5. Strengthen Monitoring Mechanisms:
   • Develop robust tracking of sectoral FDI contributions to gauge actual developmental impact.

Conclusion:

India’s FDI scenario presents a paradox — while gross inflows rise, the quality and stability of investment are deteriorating. With growing repatriations, reduced manufacturing investment, and distorted FDI channels, there is a pressing need for policy overhaul. Reform-driven, productivity-oriented FDI is essential to ensure sustainable economic growth and resilience.

Previous Year Question (UPSC – 2016):

Q. Justify the need for FDI for the development of the Indian economy. Why is there a gap between MoUs signed and actual FDIs? Suggest remedial steps to be taken for increasing actual FDIs in India.

[1. Simple-Type Question]

Q. What is the percentage of the working-age population (15–64 years) in India in 2025, as reported by the UNFPA?
(a) 60%
(b) 68%
(c) 74%
(d) 52%
✅ Answer: (b) 68%
📝 Explanation: In 2025, 68% of India’s population falls within the working-age group (15–64 years), indicating the potential for a demographic dividend.

[2. List-Type Question]

Q. Which of the following are major issues related to the global reproductive crisis as mentioned in the UNFPA Report 2025?

1. Inability to meet reproductive goals
2. Excessive population growth
3. Lack of reproductive rights
4. Surplus of empowered youth

Use the code below:
(a) Only 1, 2, and 3
(b) Only 2, 3, and 4
(c) Only 1 and 3
(d) All 1, 2, 3, and 4
✅ Answer: (c) Only 1 and 3
📝 Explanation: According to the report, the crisis is not due to high or low population, but because people are unable to fulfill their reproductive intentions, and there is a lack of reproductive rights.

[3. Match-the-Following Type Question]

Q. Match the following correctly:
Column A (Reproductive Determinants) | Column B (Impact)
A. Access to health services | 1. Decline in TFR
B. Economic status | 2. Impact on reproductive choices
C. Cultural norms | 3. Family planning behavior
D. Female education | 4. Long-term impact on population growth

Codes:
(a) A-1, B-2, C-3, D-4
(b) A-2, B-3, C-1, D-4
(c) A-1, B-3, C-2, D-4
(d) A-4, B-1, C-3, D-2
✅ Answer: (a) A-1, B-2, C-3, D-4
📝 Explanation: Access to health services affects TFR; economic status influences reproductive choices; cultural norms influence family planning; and female education affects long-term population growth.

[4. Assertion-Reason Type Question]

Q.
Assertion (A): The number of elderly people (65+) is increasing rapidly globally.
Reason (R): In most countries, the fertility rate is above the replacement level of 2.1.

Choose the correct option:
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true.
✅ Answer: (c) A is true, but R is false.
📝 Explanation: The elderly population is increasing due to declining fertility rates, not because they are above the replacement level. Most developed countries have TFR below the replacement level.

[5. Analytical-Type MCQ]

Q. According to the UNFPA Report 2025, which of the following conclusions regarding India’s population policy are correct?

1. The share of elderly (65+) in India’s total population is increasing.
2. Despite a large youth population, resources are not being fully utilized.
3. Despite a declining TFR, population growth remains rapid.

Choose the correct option:
(a) Only 1 and 2
(b) Only 2 and 3
(c) Only 1 and 3
(d) All 1, 2, and 3
✅ Answer: (a) Only 1 and 2
📝 Explanation: With declining TFR, population growth is slowing, so statement 3 is incorrect. Statements 1 and 2 are correct — the elderly share is rising and resource utilization among youth is inadequate.

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