rnin     o io    onomi ss es         21.5
              In contrast, the hinterland states will                level of income. This extra dividend
              remain relatively young and dynamic,                   will help Bihar converge, while already
              with a rising WA population for some                   rich Haryana and Maharashtra will pull
              time.                                                  further away from the average level of
          This divide among the states is due to their               income per capita in India.
     differentiated TFRs. It means, demographically,                 On the other hand, Kerala, Madhya
     there are two Indias, with different policy concerns.           Pradesh, Chhattisgarh, and West Bengal
          (i) An India which is soon to begin ageing                 are negative outliers. Their future dividend
              where the elderly and their needs will                 is relatively low for their level of income.
              require greater attention; and                     This will make the poorer states fall back,
         (ii) A young India where providing education,      unless offset by robust reforms and growth, while
              skills, and employment opportunities          the relatively rich Kerala will probably converge
              must be the focus.                            to the average as its growth momentum declines
          Of course, heterogeneity within India offers
     the advantage of addressing some of these concerns
     via greater labour mobility, which would in effect
     reduce this demographic imbalance.                     The WA population of India is about to plateau.
                                                            Thus, the boost in economic growth is likely to
     Growth impacts: India’s special demographic
                                                            peak within the next five years. In comparison to
     pattern will have two important growth
                                                            the East Asian economies, India’s WA ratio will
                                                            fall much more gradually—the reason why India
          (i) It seems that the peak of the demographic     may be able to avoid sharp falls in growth (as
              dividend is approaching fast for India—       seen in case of the former). In addition, the sharp
              peaking early 2020s—with peninsular           demographic differences between peninsular and
              India peaking around 2020 while               hinterland India will generate wide differences in
              hinterland India by around 2040.              the timing of the peak, as well as opportunities
         (ii) The distributional impacts of growth          to attenuate demographic imbalances via greater
              across India will be differentiated, too. The labour mobility. India does not need to wait
              poorer states of today will have growth       longer for the time of peaking of demographic
              in their per capita GDP higher than           dividend—better say the opportunity is “soon-
              the richer ones. It means, demographic        to-recede”. So that this once in a centuries
              dividend will bring an opportunity for        opportunity is not missed, it is high time that
              income convergence across the states.         requisite reforms, policies and compatible action
     Outliers: The overall encouraging pattern masks        are all put in place as soon as possible.
     some ‘interesting outliers’ which will have their
     own impacts on the regions and the population             3. TwiN BAlANce SheeT criSeS
     residing there.
              Bihar, Jammu and Kashmir, Haryana,            introDuction
              and Maharashtra are positive outliers in      The non-performing assets (NPAs) of banks,
              that they can expect a greater demographic    particularly the Public Sector Banks (PSBs), have
              dividend over the coming years than           been in news for being excessively high for the past
              would be suggested by their current           several years. Several steps taken by the RBI to solve