Demographic Dividend in India: Myth or Reality?

Abstract

India, one of the fastest-growing economies in the world, became the most populous country in 2023 as per United Nations reports. Among the multiple factors driving India's growth, the demographic dividend stands out as a transformative force that can potentially propel the nation towards becoming a developed country by 2047—realizing the vision of Viksit Bharat. A large working-age population not only enhances the labour supply but also expands the domestic market for goods and services. According to a study by the IMF (Aiyar and Mody, 2011), the demographic dividend could boost India’s per capita GDP growth by about two percentage points annually over the next two decades. This study examines India’s preparedness to harness this potential and highlights the associated opportunities and challenges. While China successfully capitalized on its demographic boom to become a global manufacturing hub, India’s journey is hindered by skill shortages, weak infrastructure, and regulatory complexities. The study employs a qualitative approach to explore various dimensions of demographic transition and evaluates critical determinants such as education, health, skill development, and employment generation. It also analyzes current demographic trends and discusses the strategic initiatives required to convert the demographic opportunity into a sustained advantage. The findings suggest that a coordinated and inclusive policy

framework is essential for India to fully realize the benefits of its demographic dividend and move towards equitable economic and social development.