India’s meteoric rise in the global economic rankings is no coincidence. The Economic Survey 2024-25, tabled by Finance Minister Nirmala Sitharaman, highlights a major transformation underway. In 2014, India was the world’s tenth-largest economy—less than a decade later, it surpassed the UK to claim the fourth spot. Now, projections indicate that by 2030, India will become the third-largest economy, behind only the United States and China.
The report underscored upon a crucial factor behind this trajectory: India’s demographic advantage. With 26% of its population aged between 10 and 24, the country is standing at the threshold of a once-in-a-lifetime demographic dividend. This massive working-age population, coupled with a growing manufacturing sector, is set to drive sustained economic expansion.
A Young Nation on the Rise
According to the Economic Survey, India has one of the youngest populations globally, with a median age of 28 years. In contrast, many developed nations are grappling with ageing populations and declining workforce participation. India’s youthful demographics position it as a key player in global growth—provided that employment opportunities keep pace with this expansion.
One of the most critical indicators for this cited in the Economic Survey is the declining dependency ratio. The report states that the total dependency ratio has fallen from 64.6% in 2011 to 55.7% in 2021, and is projected to decline further to 54.3% by 2026. This shift means fewer dependents per working individual, boosting economic productivity and income levels.
The Road Ahead: Jobs, Skill Development, and Policy Focus
However, the survey cautions that while demographics provide an opportunity, sustained economic success depends on integrating the growing workforce into productive roles. For India to fully leverage its demographic edge, policymakers must focus on: