Permanent Demographic Dividend Formula

Embedded in the Finance Commission Act as a standing provision (removable only by parliamentary amendment with Rajya Sabha concurrence): states achieving TFR ≤ 2.1 by 2001 receive a permanent additional 2.5% horizontal devolution weight.

Forward-looking extension:

• TFR ≤ 2.1 by 2011 → 1.5% additional weight
• TFR ≤ 2.1 by 2021 → 0.75% additional weight

This creates ongoing incentives rather than rewarding only past achievers — a critical design choice given the demographic inversion described in Part 5 [@cite_orf_age_before_rich].