Justin Fox, Columnist

India Will Struggle to Cash In on Its Demographics

A lot of working-age Indians don't seem to be working in ways that bring economic growth and progress.

April 13, 2016 at 12:08 PM UTC

Justin Fox is a Bloomberg Opinion columnist covering business, economics and other topics involving charts. A former editorial director of the Harvard Business Review, he is author of “The Myth of the Rational Market.”

Can India build a new future?
Photographer: DIBYANGSHU SARKAR/AFP/Getty Images

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A crucial yet sometimes overlooked driver of economic growth, Morgan Stanley's Ruchir Sharma wrote in the March/April issue of Foreign Affairs, is growth in the working-age population. Over the next decade, India is expected to be the leader by that metric among the world's 10 biggest economies.

In a global economy in need of growth, then, India -- home to 18 percent of the world's working-age population -- looks like it may be able to provide some. But don't get too excited about that: Sharma suggests that 2 percent annual growth in a country's working-age population may be the minimum for a sustained economic boom, and India's working-age population hasn't grown that fast since 2006. The growth rate is in fact steadily falling; in 2027 the annual increase is projected to drop below 1 percent.