India’s growth story has and will continue to make history. On several fronts, we have achieved remarkable progress while we continue to make determined strides in several others. From becoming one of the world’s fastest-growing developing economies to creating strategies for universal healthcare, from becoming the third largest stock market in the world in terms of market capitalization to envisioning insurance for all, India is focusing on inclusive development.

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Demographic Dividend or Potential Burden?

Among the several advantages that India has, the fact that it has one of the world’s youngest populations is a significant one. People under the age of 25 make up about 40per cent of the country’s population with a relatively lower median age of 28.

When it comes to the proportion of senior citizens, India presently has an elderly population of 153 million, a number that is predicted to more than double to 347 million by 2050. A worrying fact is that according to the United Nations Population Fund (UNFPA), more than 40 per cent of India’s elderly are in the poorest wealth quintile while one-fifth have no income at all.

What this essentially means is that while India has a demographic advantage, unless we take steps to reap its benefits over the next 25 years, it might become a tremendous burden that may affect the pace of the nation’s development.

While the government has taken significant steps towards inclusive growth, there may be a need to over-index on financial literacy for today’s productive youth to ensure that this ageing population does not become a burden in the future while strengthening social security measures for today’s elderly.

Need for Robust Financial Foundations

When it comes to social security, India has several comprehensive schemes right from the National Pension Scheme (NPS) to as many as 19 health insurance schemes and four life insurance schemes. However, with an insurance penetration rate of only about 4 per cent compared to the developed economies that average at 7 per cent to 8 per cent, we still have a long way to go to achieve quality universal insurance coverage. Several surveys in the recent past have also indicated that either Indians have not begun investing for retirement or the amount they have been investing is inadequate.

Developing financial literacy among the youth to help them understand the importance of comprehensive financial planning including investments in insurance products, retirement plans, among others will be as important as strengthening access to affordable healthcare, insurance and pension schemes for the elderly.

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Leveraging the Digital Advantage

India has been at the forefront of several digital innovations such as Aadhaar and the Unified Payments Interface (UPI) that several countries across the world want to replicate. These and several other innovations have laid the foundation for accelerated reach of goods and services across the length and breadth of the country. It is our responsibility to ensure that we leverage this digital infrastructure to further equitable reach and access.

The Insurance Regulatory Development Authority of India (IRDAI) has, in recent years, focused on leveraging technology to make insurance more accessible. Bima Sugam, for instance, is envisaged as a digital platform through which policyholders can do everything from choose insurance policies across providers to raise claim requests and renew policies. In a recent announcement, it also directed that all insurance players provide insurance policies to customers in an e-format to simplify management.

Partnerships All the Way

Universal financial literacy, strengthening social security systems and empowering the current and future generations to take charge of their financial freedom is no mean feat. More importantly, it is not the responsibility of the government alone. It requires deep partnerships amongst the various stakeholders including financial institutions and regulatory bodies.

India has a bright future ahead of itself, one that will only shine brighter with the country’s population reaching their full potential through economic empowerment and social security. Let us work towards making that happen.

The author is an MD and CEO of Future Generali India Life Insurance.