Why Andhra Pradesh’s incentive to have more children is misplaced

Less than 10% of Indian respondents said they would prefer three, four or more children | Photo credit: JOTHI RAMALINGAM B

On 16 May, Andhra Pradesh Chief Minister N. Chandrababu Naidu announced a one-time incentive of ₹30,000 for the third child and ₹40,000 for the fourth. He said the incentives were part of the state’s new population management policy to encourage population growth.

On the surface, the incentives to have larger families may sound reasonable, as the latest National Family Health Survey (NFHS-6) report for 2023-24 puts the state’s fertility rate at 1.8, below the replacement level of 2.1. But a closer look calls for questions on at least three fronts: whether such an incentive is sufficient for families to have more children; what are the main reasons for the decline in the birth rate; and whether such an intervention is necessary now.

A comparison of this one-time cash incentive with basic spending shows that it cannot offset childcare costs, a concern that is forcing families to reconsider having more children.

The government incentive is about twice the average cost of hospitalization for childbirth in India and a much smaller multiple of the cost in Andhra Pradesh. In fact, they are almost the same as the cost of hospitalization for childbirth in an urban part of the state. In a state where more than 50% of births take place in private hospitals and about 52% of all births are by caesarean section, this incentive only offsets the cost of hospitalization in rural areas (Chart 2). It is also insufficient to cover the cost of C-sections in private hospitals in urban areas.

For a family of five (assuming there are two adults and three children), the incentive is about 1.5 times their monthly per capita expenditure (MPCE) in rural areas and almost similar to MPCE in urban areas, according to the Household Consumption Expenditure Survey 2023-24. This means that the incentive could help families meet their consumption for one month provided the same was not already spent in the hospital during delivery.

He can’t afford children

Moreover, the question surrounding family planning has shifted from whether families “should” have more children to whether they can afford it. The United Nations Population Fund (UNFPA) State of World Population Report 2025 shows that financial constraints are the main obstacle to having children.

Other barriers included housing restrictions, followed by unemployment (or job insecurity) and a lack of quality and affordable childcare options. In many of these indicators, the proportion of Indians citing these concerns was much higher than the average for the 14 countries surveyed for the report.

The survey further pointed out that a larger proportion of Indian men and women prefer to have one or two children.

Less than 10% of Indian respondents said they would prefer to have three, four or more children, almost on par with the proportion of Indians who would prefer not to have children.

Notably, the below-replacement birth rate in Andhra Pradesh and India as a whole does not mean that population decline is imminent. The population will continue to increase, then stabilize and finally start to decline, which in the case of India is estimated to not happen until 2063.

For example, although birth rates in Japan and South Korea fell below replacement levels in the late 1970s and early 1980s, their populations—which are less than 10% of India’s population—started to decline only around 2010 and 2020, respectively.

Data for the charts were obtained from the Household Consumption Expenditure Survey 2023–24, Household Social Consumption: Health 2025, NFHS-6, Our World in Data and UNFPA

Published – 18 June 2026 10:00 AM IST