Bhutan offers financial incentives to boost birth rates

The Himalayan kingdom of Bhutan has introduced a new financial incentive program aimed at addressing concerns over its declining birth rate

The Himalayan kingdom of Bhutan has introduced a new financial incentive program aimed at addressing concerns over its declining birth rate and shrinking population. The government hopes the initiative will encourage families to have more children and help ensure the country’s long-term demographic and economic stability.

Located between China and India, Bhutan has a population of fewer than 800,000 people. In recent years, officials have become increasingly concerned about falling birth rates, an ageing population, and the growing number of young Bhutanese citizens moving abroad in search of better opportunities.

Under the newly announced policy, families will receive a monthly payment of 10,000 ngultrums (approximately $105) for every third child and any subsequent children born on or after June 4. The financial assistance will continue until the child reaches the age of three. The programm also applies to eligible children who were born before the policy’s implementation date but are still under three years old.

Cabinet Secretary Kesang Deki explained that there is no upper limit on the number of children covered by the scheme after a family’s second child. Parents with three, four, five, six, or even more children will continue to receive the monthly benefit for each eligible child.

The initiative comes in response to a significant decline in the country’s birth rate. Official figures show that annual births dropped from 11,001 in 2015 to just 8,153 in 2024, representing a decrease of nearly 26 percent. During the same period, Bhutan’s total fertility rate—the average number of children born to each woman—fell to around 2.1, which is considered the replacement-level fertility rate needed to maintain a stable population over time.

Government officials warn that continued population decline could create serious challenges for the country in the future. A smaller and ageing population may lead to labor shortages, place additional pressure on social services, and slow economic growth. These concerns are compounded by outward migration, as increasing numbers of young Bhutanese leave the country to pursue education, employment, and better living standards abroad, particularly in countries such as Australia.

According to the government, the policy demonstrates its commitment to supporting mothers, children, and families while safeguarding Bhutan’s long-term population sustainability. Officials believe that financial assistance during the early years of a child’s life can help reduce the economic burden on parents and encourage larger families.

Bhutan is not alone in introducing measures to boost birth rates. In 2023, the neighboring Indian state of Sikkim announced a series of incentives designed to encourage parenthood. These included extended maternity leave for women, paternity leave for fathers, and financial assistance for couples seeking fertility treatments such as in-vitro fertilization (IVF).

Bhutan is internationally recognized for its unique development philosophy centerd on Gross National Happiness, a concept that measures national progress through factors such as well-being, environmental conservation, cultural preservation, and quality of life rather than relying solely on traditional economic indicators like gross domestic product. The latest population initiative reflects the country’s effort to balance social welfare with long-term national development goals.