Overview A recent study indicates that Telangana is gradually transitioning into an ageing state. The proportion of individuals aged 60 years and above is increasing, presenting both opportunities and challenges for the state's socio-economic landscape. The Reserve Bank of India (RBI) has highlighted these demographic shifts in its recent report, emphasizing the need for proactive policy interventions. Key Developments Demographic Trends Rising Elderly Population: From 10.1% in 2016 , the population above 60 years has increased to 12.5% in 2026 and is projected to reach 14.5% by 2031 . Approaching Ageing State Status: By 2036 , 17.1% of Telangana's population is expected to be above 60 years, aligning it with states like Tamil Nadu and Kerala , which are already categorized as ageing states. RBI's Assessment According to the "State Finances – A study of budgets 2025-26" report by the RBI , Telangana is currently in an intermediate stage demographically but is rapidly approaching the status of an ageing state. Fiscal Implications Shrinking Tax Base: Population ageing leads to a reduced working-age tax base, straining public resources. Increased Dependency Ratio: The dependency ratio, which measures the proportion of the population aged 60 years and above relative to the working-age population (15-59 years), is on the rise. Rising Social Sector Expenditure: An ageing population necessitates increased expenditure on social security, healthcare, and pensions. Dependency Ratio Trends 2016: 15.2% 2026: 18.4% 2031 (Estimated): 21.5% 2036 (Estimated): 25.7% Policy Recommendations RBI's Suggestions for Intermediate States Balanced Fiscal Stance: States should balance growth-enhancing investments with the need to expand social security and healthcare systems. Encourage Labour Force Participation: Policies promoting higher labour force participation, especially among women and older workers, are crucial. Productivity-Oriented Reforms: Adoption of technology, innovation, and industrial diversification can offset the slowdown in labour supply and ease long-term fiscal pressures. UPSC Relevance This analysis is relevant to GS Paper II (Social Justice, Governance) and GS Paper III (Economy) . Understanding the demographic transition and its fiscal implications is crucial for policy formulation and resource allocation. Key Terms Ageing State: A state where 15% or more of the population is above 60 years. Dependency Ratio: The ratio of dependents (under 15 or over 64) to the working-age population (15-64). Fiscal Pressure: Economic strain on a government due to rising expenditures and/or shrinking revenue. Published: January 27, 2026