The country’s massive youth population, seen as its greatest asset, is turning into something more troubling that threatens economic prosperity and social stability
The arithmetic is seductive. Over 65% of India’s population is under 35, the largest youth cohort in human history, with the potential to power decades of growth and prosperity. This promise may yet prove false as the demographic dividend is morphing into something more troubling -- a demographic burden that threatens to destabilise the very foundations of growth and social cohesion.
Also read | A $100,000 visa fee and a failed friendship: India’s H-1B reckoning
The evidence is accumulating in government surveys and academic studies. The country’s youth unemployment rate stood at 10.2% in 2023-24, according to the Periodic Labour Force Survey, in a landscape dominated by temporary and low-paying work. On top of it, around 12 million youngsters are entering the labour market every year. The India Employment Report 2024 reveals a cruel paradox: more students are going to college, but they cannot find good jobs because they lack the right skills, emerging as graduates ill-prepared for markets that barely exist.
Foundations of a crisis
The learning problem starts early. The Annual Status of Education Report (ASER) 2024 shows that many children cannot read or do basic math properly after years of schooling. The unfortunate prevalence of poor nutrition and stunted growth also hurts children’s ability to think and develop physically before they even start looking for jobs. These are not just numbers on a page. They represent millions of young people constrained from the very start.
Industries that normally hire lots of workers are struggling or have stagnated. Small businesses and factories haven’t grown enough to create the millions of jobs needed. Niti Aayog shows a troubling trend of jobless growth, where capital-intensive sectors are expanding without creating the mass employment that India desperately needs. Only about a third of young women work outside of home, limited by social norms, inadequate childcare and urban safety concerns that effectively exclude half the potential workforce.
Politics of diversion
Despite this, India has avoided the youth-led upheavals that have in recent years convulsed nations in its immediate neighbourhood. This stability, however, comes with a hidden cost. Organised religious-nationalist networks, student groups, and volunteer organisations have become sophisticated mechanisms to channel youthful energy into political participation and ideological projects. As documented by the Carnegie Endowment, these networks offer young people a sense of agency and belonging that economic opportunity has failed to provide.
The arrangement keeps the situation steady in the short term as social unrest is contained, political participation flourishes, and young people find purpose in collective identity. Yet this diversion carries profound risks.
The real economic problems remain unresolved beneath the surface, while politicised youth are mobilised in ways that deepen polarisation, marginalise minorities and undermine the social cohesion essential for sustained development. It might prevent immediate outbursts but may breed more dangerous forms of instability.
Religious nationalism, in particular, offers a seductive alternative to economic progress. It transforms material frustration into cultural assertion, redirecting energy that might otherwise demand structural reform into projects of exclusion and dominance.
This political alchemy reduces immediate pressure for the labour-intensive development that could genuinely absorb India’s youth surplus, creating a vicious cycle where demographic potential is expended on exclusionary projects rather than inclusive development.
Lessons from the neighbourhood
The dangers of an unabsorbed youth bulge are not theoretical. They are evident across South Asia with its abundance of young people. In Sri Lanka, the 2022 protests that toppled the government were driven by disillusioned young people facing unemployment, inflation, and state failure.
Also read | Why is Yogi playing caste and communal cards simultaneously?
This was repeated in Bangladesh, which saw recurring student and youth movements over education, road safety, and employment, each wave revealing the explosive potential of frustrated demographic energy that ultimately toppled the regime.
Nepal, with a median age of 24, has been the latest to be so convulsed. The Himalayan nation’s demographic haemorrhaging through migration, with remittances forming nearly a quarter of GDP, represents a failure to create domestic opportunities. The images of youth storming presidential palaces should haunt every policymaker in the region.
These examples underline a fundamental truth: large youth cohorts without opportunity will not quietly accept their fate. They will reshape societies, often violently. India’s current stability should not breed complacency but urgency.
Models to draw from
However, unlike neighbours facing youth-led crises, India benefits from both political stability and economic diversity. It must be pointed out that national-level analysis often obscures crucial state-level variations.
Karnataka’s technology hub in Bangalore, Tamil Nadu’s manufacturing clusters, and Kerala’s human development achievements offer different models where a measure of the demographic dividend is being realised. These success stories show that targeted approaches could be more effective than uniform national policies.
Similarly, sectors in the economy show dramatic variations. While traditional manufacturing seems to be stagnating, pharmaceuticals, automotive components, and renewable energy demonstrate growing youth absorption capacity. The challenge lies in scaling successful models rather than inventing entirely new approaches.
Success requires simultaneous attention to multiple fronts. Early-childhood nutrition and foundational learning remain critical for preventing lifelong deficits. Vocational training must align with actual employer needs rather than bureaucratic convenience. The National Educational Policy (NEP) 2020 provides frameworks, but implementation requires political commitment and funding. Labour-intensive industries require targeted support through credit, infrastructure, and regulatory reform that recognises their critical role in demographic absorption.
Unlocking female potential
Female workforce activation represents the most immediate opportunity through expanding childcare and improving urban safety that would enlarge the productive workforce. Strengthened social protection, urban employment programmes, and MSME support remain critical for inclusive growth, as emphasised by both the OECD and ICRIER.
Yet implementation faces formidable obstacles. Structural reforms demand political commitment, cooperative federalism and fiscal flexibility that current priorities often preclude. Infrastructure, defence, and large-scale industrial incentives typically overshadow the broad social investments required for demographic absorption. The reliance on religious-nationalist mobilisation further reduces political pressure for labour-intensive reforms, creating a dangerous feedback loop where immediate stability undermines long-term prosperity.
The window is closing
India’s demographic advantage operates on biological time. It will not wait for political convenience or bureaucratic readiness. Without urgent action on education, nutrition, employment, and female workforce inclusion, the country faces the prospect of converting its demographic potential into a structural burden. The scale of this challenge extends far beyond economics to encompass social stability, political legitimacy and national cohesion.
Also read | The long-term economic anguish that sparked Nepal’s Gen-Z uprising
The window remains open, but barely. Every year of delay multiplies the challenge. India's future growth and social harmony depend on rapidly translating demographic potential into productive, inclusive employment while resisting the temptation of political diversions that postpone rather than solve fundamental challenges. The choice is stark: harness the demographic dividend or face its darker twin -- a demographic debt that no amount of political manipulation can ultimately contain.
(The Federal seeks to present views and opinions from all sides of the spectrum. The information, ideas or opinions in the articles are of the author and do not necessarily reflect the views of The Federal.)
