Will this be the 'Indian century'? Four key questions

large population to develop at a remarkable pace, but it is not likely to surpass India's population for many decades. India is the world's largest everything and is not likely to be surpassed by China for many decades.

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May 22, 2023 • 4 min read

In India, most people do not have the financial means to be unemployed - working but without a position.

This is a figure of such magnitude that it will go down in history.

India's population

According to the most recent U.N. estimates, India will surpass mainland China in population soon, reaching 1.428 billion. India will become the world's most populous nation as China's population declines. India's exact date of attaining this distinction will depend on the way you count. If you include Hong Kong into China's numbers, it could happen next year. India will not be surpassed in terms of size by any other country for many centuries. The world's biggest democracy is no longer the world's biggest anything. China has used its size to influence the world more than other nations in the last generation. Will India be able to do the same in the next generation?

Can India make the most of its size?

India's growth rate is envied by countries such as China. However, the demographic future varies from region to region. India and China used to try to slow down the population growth by reducing births. This era is long gone. India's demographic curve is a gentle one, which makes it look enviable for many other developed countries that are rapidly ageing. Indians are living longer and the number born every year has barely changed. India, unlike China, is not facing economic and social problems due to the effects of the decades-long one-child policy. India has a growing and young workforce, while China is graying and contracting. In some regions of India, the population continues to grow too quickly for their economies. This results in a surplus of young, able-bodied people compared to available jobs. In some parts of India, the population is already at its peak. This is especially true in the south where women are more educated and family planning programs are successful. In these areas, young couples rarely have more than two kids. India's environment is under severe strain due to the physical demands of almost a billion-and-ahalf people. As India rises out of the deepest levels of poverty, the famines are no longer a threat. Its future as the largest workforce in the world is leading to some hope that an "Indian Century" will be born.

Is India poised to reap a "demographic dividend"?

A rapidly expanding young workforce can be an opportunity or a disaster. India is a nation that is ready to work. Over two-thirds (67%) of Indians are aged between 15 and 59. It is remarkable how low the ratio of working-age adults to children and retired people in India is. This opportunity is not without its challenges. This "demographic dividend", however, could also turn into a disaster. India barely edged out China in recent years to become the fastest-growing large economy. It has not expanded quickly enough to create formal employment for all. To keep up, the country needs to create 9 million jobs per year. The annual shortfall forces many Indians to return to their old profession of agriculture. The majority of Indians lack the financial means to be "unemployed", i.e., in the workforce without a job. The more subtle danger is underemployment. According to Jean Dreze's analysis, wages have stagnated for eight years. India's already unequal society could become even more unjust if economic growth is not accompanied by an increase in employment.

Can India attract more women to the workforce?

India has the lowest rate of women working outside their homes than any other country. This is a major roadblock to economic growth. India has the lowest rate of women's formal employment in the world: 1 out of 5. China's rate is nearly double the United States and world average. A country cannot reach its full potential if it relies on so few women. It is also alarming that the rate in India has decreased even though the economy of the country has improved. Economists believe that because the jobs women do are poorly paid, they stop working as soon as their families can live without it. This does not mean that women in India don't work hard. In the 41% of Indian society that still works in agriculture, they are visible and carry the majority of household duties. As long as they remain outside of the formal workplace, these women will not be able to enter its most productive sectors, such as industry and services. Better access to family planning and education, as well as efforts to change attitudes in society, could encourage more women to take formal jobs.

Can India chart its path to prosperity on its own?

India's story is not going to be the same as China's, which could have advantages. China, in the early 1990s when it accelerated its market reforms, followed the example of other East Asian countries - Japan South Korea and Taiwan - to become a leader of export-driven manufacturing. Today, its economy is five times larger than India's. Western countries are rushing to embrace India to replace China. The obstacles that prevented India from implementing the same program for the past 30 year remain: ineffective government, inadequate infrastructure, low spending on health and primary education, and laws restricting the use and ownership of land. The "Make in India", a program led by Prime Minister Narendra modi and now in its 8th year, is slow to gain traction. As labor costs in China have increased, Vietnam and Bangladesh are absorbing more of the production that was once produced on Chinese factory floors. India's story will not repeat China's, no matter what. India has many opportunities to rise, particularly now that industrial manufacturing is no longer the dominant force in the global economy.

The services industry is now a large and exciting part

Indian economy

India has developed a low-cost, digital infrastructure. There are other glimmers: chipmakers are looking at India as a high end substitute for China. Online services allow millions of Indians to work overseas without having to leave home.

The new largest country in the World will be different from any other.

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