Optimal Targets for Indian Family Planning Program

Benefits and costs associated with family planning programs of underdeveloped countries in general, and of India in particular, have been a subject of intensive investigations. These studies have been primarily used as a means for the justification of family planning programs. In this paper, we have applied benefit-cost analysis to derive the economically justifiable targets for Indian family planning programs. The targets are defined in terms of desired declines in general fertility rates (GFR). A demographic and economic model similar to Coale-Hoover is constructed to evaluate the economic consequences of different GFR paths. The cost-equations based upon the past data are used to estimate the costs of achieving various GFR paths. Benefit-cost analysis is used to compare these paths and derive optimal targets. The study shows that the benefit-cost analysis results are very sensitive to the type of economic benefits considered. Interest rates and horizon periods also effect the optimal targets. The analysis is then used to discuss the interactions among per-capita-consumption distribution, measures used and suggested to achieve declining fertility rates and financing of family planning programs. It is stressed that a massive program to reduce fertility rates may not achieve credibility unless steps are taken to achieve a greater equality in per-capita-consumption distribution.