How India's elder-care industry works

Akshara (0:04)

In today's episode, we'll do one deep dive and cover another story for the day. First, we'll talk about how India's elder care industry works, and then we'll talk about India's new internet gateway.

Welcome back to The Daily Brief by Zerodha, where we cut through the noise to help you understand what's actually happening in the most important stories from business and markets. I'm your host Akshara, and today is Wednesday, 16th September.

Before we begin, on Subtext, the latest episode of Cash and Copium is out. Bhuvan, Abid, and Akanksha tackle the fears keeping retail investors up at night. Could India stumble into a Japan-style loss decade? Will AI wipe out your job before your SIP matures? Are those juicy, high-yield bonds actually a trap?

They dig into the numbers. Why India's 21-22x PE is nothing like Japan's insane 60x bubble, how SIPs, through even Japan's 34-year crash, still delivered an approximately 5% XIRR, and why your emergency fund probably needs to be a lot bigger than you think if AI-driven layoffs stretch job hunts well beyond normal timelines. The link to the episode is in the description below. Coming to the first story.

For most Indians, the original elder care institution is the family. Children looked after parents, grandchildren were around, and there was a small ecosystem of people willing to look after each other.

Living with adult children remains the most common arrangement for older people. But that arrangement worked when families were large and close-knit and nobody moved very far. That, as many of you might have experienced yourself, is becoming harder to guarantee. Families are getting smaller, and the average fertility rate has fallen from about 5.9 in 1950 to around 2 today.

A parent who once had 4 or 5 children nearby may now have 1 or 2 And the children who do exist are moving further away. Migration for work splits families across cities and countries. Urbanization, migration, changing workforce patterns, and the shift from joint to nuclear families are all leaving fewer people at home to look after aging parents. Meanwhile, Indians are living much longer than before. The average lifespan has risen from around 37 years in 1950 to over 70 today, and is projected to reach 77 by 2050 We now have approximately 167 million people aged 60 plus, and this number is projected to reach approximately 346 million by 2050

So that means fewer people to provide care, and more years of care needed. Meanwhile, 75% of Indians aged over 60 have at least one long-term illness.

One in four has difficulty with basic daily activities like bathing, dressing, or eating. And they need someone around, not a doctor or hospital, just someone who can help them get through the day. So what that help looks like and what it costs depends entirely on where someone is in their life. Now to solve this, an industry is forming around the care that families can no longer provide. Companies now sell everything from emergency response subscriptions at Rs.1999 a month to assisted living facilities at over Rs.1 lakh. It is this elder care industry that we'll be tackling on The Daily Brief today. So when most people hear elder care, they think of the traditional old age home which carries a stigma. And you could probably visualize this. These establishments were often underfunded, understaffed places where dozens of residents were looked after by only a handful of people. And residents had little say over their routines and limited social interaction outside of the home. For many families, sending a parent to one felt like abandonment. But the organized elder care industry that has emerged over the last decade is built around a different idea. So instead of taking people out of their lives, it tries to help them stay independent for as long as possible, with support added only when it becomes necessary. And a 65-year-old in reasonable health may want nothing more than a safe home, people their own age around them, and somebody to call in case of an emergency. So the pitch has moved from your family cannot look after you, to you can keep your independence without managing everything yourself. But 10 years later, the same person may need help remembering medicines or bathing, and they may have dementia, a condition where memory and thinking declined to the point where a person may not recognize family or remember to eat. And after a hospitalization, they may need nursing and physiotherapy at home. Now, this may require specialized supervision that's different from trying to cure the disease, but instead focused on managing pain and keeping the person comfortable. This is called palliative care, which can run alongside treatment. So, loneliness and social isolation are recognized as serious health risks for older adults. So, operators put real effort into social activities, group meals, fitness sessions, cultural events, and outings. These are not extras, but part of what makes the care work. Now, the most common buyer is not often the elderly person. It's a 35 or 45 year old in another city whose parents live alone. What they pay for is someone local who is accountable. Someone who knows the medical history, answers the phone at 2 a.m., arranges the ambulance, and tells the family what happened afterward. Now, the industry runs on several distinct models, each built around a different kind of need.