Can We Incentivize a Society That Has Stopped Believing In?

By Swami Srirama Charana Aravinda Dasa

India is running an unintentional controlled experiment at a national scale — and the early results should alarm policymakers far more than a 1.5 fertility rate already does.

Two India, Two Trajectories

Bihar’s Total Fertility Rate stands at 2.9; Uttar Pradesh’s at 2.6. Andhra Pradesh, Tamil Nadu, Kerala, and Delhi have fallen to 1.2–1.4 — well below the 2.1 replacement threshold, with Maharashtra’s now lower than Norway’s.

One in every three Indian children under 14 lives in just Bihar and UP. Tamil Nadu’s population is projected to shrink in absolute terms within a decade — the first major Indian state to do so.

The Andhra Pradesh government has smelled the coffee much earlier than others, and hence a ₹25,000 baby bonus is being announced. But it seems wildly disproportionate to what’s actually unfolding.

A Perfect Failure Record

South Korea spent over $220 billion across two decades on cash payments and childcare subsidies. Its 2025 fertility rate: 0.8, the lowest ever recorded.

A November 2025 RAND assessment found China’s pronatalist spending billions similarly failed.

Demographer S. Rajan notes:

“The entire government machinery was committed to reducing fertility. Now they are asking people to increase fertility… incentives may not work the same way.”

Education and Employment: The Correlation Cash Cannot Override

If income drove fertility decisions, incentives would work. But the data says otherwise.

Between 2014 and 2024, literate women’s national fertility rate declined to 1.8, while illiterate women remained at 3.2.

The Delhi–Bihar comparison makes this unmistakable:

• Among illiterate women: Bihar 4.2 vs Delhi 1.8
• Among literate women: Bihar 2.8 vs Delhi 1.2
• Among graduates: Bihar 2.2 vs Delhi 1.6

Education compresses the gap but never eliminates it — and the pattern holds identically across every developed-versus-developing state comparison. This is exactly the mechanism unfolding in Andhra Pradesh.

As female literacy and workforce participation rise, the opportunity cost of childbearing rises with it.

A 2025 study by economists Dean Spears and Michael Geruso (After the Spike) complicates the pure “career cost” theory. India’s fertility has fallen to Vietnam’s levels despite far lower female labour participation than East Asia. However, even they concede that rising education and aspiration—not just employment status—reshape reproductive decisions well before women enter the workforce.

Bihar and UP will travel this same curve as their own female education catches up over the next two decades.

The Cultural Shift Behind the Curve — And the IVF Economy It Created

Beneath these numbers sits a deeper shift cash cannot address.

Growing numbers of urban, educated women are not merely delaying childbirth — they are questioning whether to have children at all, mirroring patterns seen across East Asia and Western Europe a generation earlier.

First childbirth in urban centres now routinely occurs in the early-to-mid thirties, versus the early twenties a generation ago.

The commercial consequence is measurable.

India’s IVF market — worth ₹11,700 crore in 2025 — is projected to nearly quadruple to ₹40,700 crore by 2034, growing above 14% annually.

An estimated 27.5 million couples are affected by infertility, attributed overwhelmingly to delayed marriage and childbearing rather than pre-existing conditions. Female fertility measurably declines after 32, precisely the age urban professionals now first attempt conception.

Tellingly, South India accounts for 35% of India’s entire IVF market, concentrated in Bengaluru, Chennai, and Hyderabad — the same cities driving the region’s lowest fertility rates.

This is the same demographic phenomenon appearing twice: first as a falling birth rate, then as a booming industry built to partially reverse it, at enormous cost to the couples involved.

This shift has also been reinforced—not merely accompanied—by law.

The Prohibition of Child Marriage Act, 2006, the 2017 Supreme Court ruling criminalising sex with any wife under 18, and the pending Prohibition of Child Marriage (Amendment) Bill, 2021, proposing to raise women’s marriage age to 21, have all deliberately and correctly pushed marriage later.

However, no corresponding legal or policy architecture addresses what happens to fertility once marriage is pushed beyond 25 or 28.

The law solved child marriage; it never engineered a solution for the delayed-childbearing consequence it was always going to create.

This sequence—delay, infertility, expensive assisted reproduction—is precisely what a ₹25,000 payment at birth cannot interrupt.

The decision point cash incentives target arrives nearly a decade after the actual decision point that determines fertility outcomes: when a couple prioritises marriage and childbearing relative to education and career.

The Subsidy Nobody Is Counting

The South’s low fertility has been invisibly financed by the North’s high fertility — a temporary subsidy, not a solution.

A 2025 NIAS Bengaluru survey found 85% of migrant workers in the city’s informal settlements came from Bihar, Jharkhand, Madhya Pradesh, Odisha, Uttar Pradesh and West Bengal.

Researcher Retna Kumar notes:

“Rising internal migration from north to south is a direct result of low fertility rates in the southern states.”

For thirty years, Southern industries have run on workers whose childhoods were funded by Northern households.

That arrangement is expiring as Uttar Pradesh and Madhya Pradesh approach replacement fertility by 2025–28, and as female education catches up along the same curve the South has already travelled.

The European Precedent

The West faced this arithmetic decades earlier, choosing mass immigration to stabilise workforces.

It worked economically in the short term but generated a second-order cost only now being totalled: rising polarisation across Western Europe, unrest in French urban peripheries, and British political instability substantially organised around integration failures.

A 2024 Pew study found immigration’s cultural and religious impact now ranks among the top three political concerns in nearly every major European economy.

The lesson:

Importing population without fixing underlying fertility merely defers a demographic problem into a social cohesion problem.

Andhra Pradesh’s version—importing workers from Bihar and UP—works only as long as those states stay poorer.

Moreover, paying ₹25,000 will only encourage families from the lower end of the spectrum, who are the future labourers these southern states precisely need.

But that gap is definitely closing rapidly.

Reframing the Unit of Analysis: Familyism

Every fertility policy assumes the individual—not the family—is the correct unit of economic analysis. That is precisely why cash incentives fail globally.

I call the corrective framework Familyism (like so many “isms” in everyday discourse): treating the multi-generational family as the primary unit of economic production.

A grandparent’s full-time childcare is worth an estimated ₹3–4 lakh annually if purchased.

Crucially, a supported joint household directly counters delayed marriage, since young women face no pressure to postpone childbearing for want of a support system already available at home.

This makes Familyism an economic multiplier: lower marginal cost per child reliably increases quantity demanded.

A tax regime built for nuclear households is not neutral—it is an anti-natalist policy by default.

Familyism deserves far more than a footnote in demographic debate. It demands sustained discourse across intellectual forums, think tanks, and national and state policy networks before the window to act closes.

A Data-Driven Prescription

Based on available data and global research, the plausible prescription is:

1. Tax incentives for multi-generational households recognising the ₹3–4 lakh childcare subsidy grandparents provide.
2. Full-cost socialisation for third children, as effectively implemented in Nordic countries.
3. Structural childcare infrastructure reducing the career-family trade-off driving delayed marriage.
4. Enforceable labour re-entry guarantees for mothers.
5. Fertility-awareness counselling integrated into higher education so informed timelines replace indefinite postponement.

The Bottom Line

Andhra Pradesh’s ₹25,000 incentive will likely join South Korea’s $220 billion in the archive of fertility policies that failed to move the numbers.

Cash transfers arrive at the wrong decision point, address symptoms rather than the education-driven delay in marriage and childbearing, and treat the individual as the unit of analysis while fertility decline is driven by cost architecture that only a family-centred model can correct.

More urgently, the South’s reliance on North Indian migration is a temporary arbitrage on a gap narrowing by design, as Bihar and UP travel the same education-fertility curve the South has already completed.

The window to build family-centred economic architecture is now—before the migrant cushion disappears and the crisis becomes undeniable in the data rather than debatable in policy papers.

In the end, the question was never how much to pay a family for a child—it was whether a civilisation that has stopped believing in its own tomorrow can be incentivised back into faith.

History suggests it cannot. Only remembering can.

Written by:
Swami Srirama Charana Aravinda Dasa — Former international banker, currently a mendicant serving at ISKCON.