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India at Risk of Losing Its Demographic Dividend Advantage

Jacob Peenikaparambil Jacob Peenikaparambil
08 Jun 2026

On May 4, the results of the elections to four States and one Union Territory were declared after a month-long, hectic, and often vituperative campaign. During the election period, education and healthcare were not priorities for any political party. Most parties competed with one another in promising freebies to the electorate, accompanied by an overdose of religious polarisation by the BJP.

Although all political parties vociferously speak about development, few seem genuinely committed to it. Their primary concern appears to be capturing power and retaining it by any means possible. No country can achieve sustainable development without investing in human resource development through quality education and healthcare. Yet, these remain among the most neglected sectors in many Indian states.

With 65% of its population in the 15–59 age group and a median age of 28 years, India is well-positioned to reap the benefits of a demographic dividend. In their influential 2003 book, economist and demographer David E. Bloom and his co-authors coined the term "demographic dividend" to describe the boost in economic growth that a country with a large working-age population can enjoy, provided the right policies are in place.

In economic terms, children and the elderly require welfare investments and resources, whereas the working-age population can generate resources and drive economic growth. However, if young people lack the required skills and are not gainfully employed, they become a burden on the economy rather than a contributor.

The share of Indians aged 15–60 years—defined as the working-age population in Indian demographic and labour statistics—currently exceeds 60% of the country's population. However, this demographic advantage is approaching its peak, suggesting that India's demographic window may soon close. According to United Nations population projections, the proportion of Indians in the working-age category will peak within the next three to four years and then begin to decline.

In absolute numbers, the working-age population is projected to reach a peak of around 1.04 billion people aged 15 to 60 by around 2040, after which it is expected to decline. After 2050, the only age group projected to continue growing is the population aged 60 and older. Within the next two decades, India is likely to have more senior citizens aged 60 and above than children. Kerala currently has the highest proportion of people aged 60 or older, accounting for about 15% of its population.

To capitalise on its demographic advantage, India must invest substantially in education, healthcare, and skill development while addressing gender disparities. Unfortunately, governments in India have largely failed to focus adequately on these critical areas. According to the India Employment Report 2024, a joint study by the International Labour Organisation (ILO) and the New Delhi-based Institute for Human Development (IHD), youth accounted for 83% of the country's unemployed population in 2024. The economy is not generating enough jobs to absorb the 12 to 13 million young people entering the workforce every year, resulting in high levels of unemployment and underemployment.

The skill gap is another serious impediment to realising the benefits of the demographic dividend. The ILO's 2023 report indicates that 47% of Indian workers are underqualified for their jobs. Various studies also suggest that between 45% and 57.4% of graduates are not immediately employable after completing college. The very foundation of India's education system remains weak. The Annual Status of Education Report (ASER) by Pratham shows that roughly 50% of Grade 5 students are unable to read a Grade 2-level text fluently, while fewer than 35% can solve basic arithmetic problems such as division.

Extremely low female workforce participation is another major concern. India has one of the lowest female labour force participation rates in the world, with only about 24% of women participating in the workforce. This effectively deprives the country of nearly half of its potential productive capacity.

Adding to these challenges, recent controversies surrounding examinations such as NEET-UG, CBSE Board Examinations, CUET, and various recruitment tests have exposed serious flaws in India's examination system. These failures have raised concerns regarding transparency, accountability, cybersecurity, administrative competence, and the protection of students' interests. The future of nearly 22 lakh students was affected by widespread allegations of paper leaks and related controversies surrounding the NEET-UG 2026 examination conducted by the National Testing Agency. At least four students have reportedly died by suicide across India following the sudden cancellation of the NEET-UG 2026 examination.

The Central Board of Secondary Education (CBSE) also introduced a nationwide On-Screen Marking (OSM) system for evaluating Class 12 board examination answer sheets, which reportedly resulted in considerable administrative confusion. Following the declaration of results, significant discrepancies emerged. Thousands of students who downloaded their answer sheets reported blurred or illegible scans, missing pages, and instances in which answer scripts were allegedly swapped or incorrectly tagged.

These failures have shaken the confidence of young people in institutions entrusted with conducting examinations in an objective, fair, and efficient manner. Restoring trust in the examination system and the agencies responsible for conducting these examinations is an urgent national priority. Unfortunately, the Prime Minister, who advises students on the eve of board examinations through his programme Pariksha Pe Charcha, has neither expressed regret for his government's failures nor shown sympathy for the lakhs of affected students.

The sudden emergence of the satirical Cockroach Janata Party (CJP), as a spontaneous response to an off-the-cuff courtroom remark by the Chief Justice of India, exposes the frustration and helplessness of many young people in India. During a hearing, Justice Surya Kant remarked that there were youngsters "like cockroaches" who, unable to find employment or establish themselves professionally, drifted into media, social media, and activism. The speed with which the government blocked the CJP's social media accounts reflects its anxiety and, in a way, an implicit acknowledgement of its failure to meet the expectations of millions of young Indians.

The Modi government's top priority during the last twelve years appears to have been capturing and retaining power by mobilising and polarising Hindu voters through a series of policies and actions perceived as targeting minority Muslims and Christians. In its pursuit of political dominance and the marginalisation of minorities, the government seems to have forgotten many of its promises to the people, especially the promise of creating two crore jobs annually.

Education and healthcare have remained low-priority sectors under the Modi government. The education system under the BJP-led government, according to critics, has witnessed a decline in quality, equity, and effectiveness. Over the last decade, unfulfilled promises, ideological imposition, and policy mismanagement have collectively failed students, teachers, and the nation's future. Critics argue that BJP governments in several states are attempting to introduce school curricula that align with the worldview of the Hindu nationalist movement. Consequently, many believe that Indian education has become increasingly politicised and fragmented.

It is reported that CJP founder Abhijit Dipke will return to India on June 6 to participate in a peaceful protest at Jantar Mantar, New Delhi, demanding the resignation of Education Minister Dharmendra Pradhan. In a video message, he stated that he was not afraid of being arrested or imprisoned. "How long will we live in fear?" he asked. He could have chosen to live comfortably in the United States, as he reportedly received several job offers in recent days. However, he has expressed a desire to contribute to the country that has given him so much. If he fulfils this commitment, it would indeed reflect a genuine spirit of patriotism and nationalism.

If India is to fully realise its demographic dividend, it must significantly increase investments in education, healthcare, and skill development. Promoting entrepreneurship, creating a business-friendly environment, and implementing labour market reforms are essential for generating employment opportunities. Addressing social challenges such as gender disparities and improving health and nutritional outcomes are equally important.

Above all, the government must adopt a genuinely inclusive approach by abandoning policies of exclusion and marginalisation of minorities. Policies guided by hatred, division, and revenge against sections of the population cannot help India harness its demographic dividend or build a united and prosperous nation. The dream of India becoming a developed country by 2045 may remain a mirage if the constitutional values of justice, equality, liberty, and fraternity are neglected.

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