Telangana set to become ageing state by 2036
HYDERABAD: Telangana’s total fertility rate has fallen to 1.5, well below the replacement level of 2.1, putting the state on course to enter the ‘ageing state’ category by 2036, the Reserve Bank of India has warned.
Demographic shift to strain finances, pensions
In its report State Finances: A Study of Budgets 2025–26, the RBI said Telangana, currently in the ‘intermediate’ demographic stage, is witnessing a rapid shift in population composition that will have a significant impact on the state’s economy, particularly pension liabilities and health expenditure.
Compared with states such as Bihar and Uttar Pradesh, Telangana is likely to see a decline in its working-age population alongside a rise in the elderly population over the next decade, the report said.
Fertility below replacement level
The RBI noted that Telangana’s fertility rate has dropped sharply to 1.5, meaning fewer than two children are being born, on average, to a couple. The state now ranks alongside Kerala, Tamil Nadu and West Bengal, while fertility rates remain higher in Bihar (2.9), Uttar Pradesh (2.6) and Madhya Pradesh (2.5).
If the trend continues, Telangana could face a shrinking youth population and a growing elderly cohort, disrupting social balance and creating labour shortages that may weigh on economic growth, the RBI cautioned.
Demographic dividend window narrowing
A higher share of working-age population often termed the ‘demographic dividend’ supports faster economic growth. The RBI said this window is closing rapidly for Telangana. The working-age population share is expected to peak at 67.8% in 2026 and decline to 66.7% by 2036, even as states such as Madhya Pradesh and Jharkhand continue to see increases beyond that period.
The report warned that Telangana, despite being a relatively developed state, has limited time to raise per capita incomes before demographic pressures intensify.
Rising pension and health burden
An increase in the elderly population will directly affect the state budget. With fewer working-age taxpayers, revenue growth could slow, while spending on old-age pensions, healthcare and social security is set to rise sharply. The RBI pointed to Kerala and Tamil Nadu as examples already facing such pressures, adding that Telangana is heading in the same direction.
The central bank urged states like Telangana to act now by improving skills among the existing youth population to raise productivity, strengthening elderly healthcare infrastructure, and making fiscal provisions to manage rising pension obligations.
Sharp rise in elderly population
People aged 60 and above currently account for 11% of Telangana’s population, based on 2021 estimates. This is projected to rise to 12.5% by 2026, 14.5% by 2031 and 17.1% by 2036. A state is classified as ‘ageing’ once the elderly population crosses 15%.
The old-age dependency ratio is also set to worsen. From 14.5 elderly persons per 100 working-age people in 2011, the ratio is projected to rise to 25.7 by 2036 meaning one elderly person for every four earners. The figure will be lower in Uttar Pradesh (17.9) and Bihar (17.8), but higher in Kerala (38.3) and Tamil Nadu (32.7).
The RBI warned that a rising dependency ratio could reduce household savings, increase social security costs and potentially trigger inter-state migration as labour availability and fiscal capacities diverge across regions.
