India’s demographics are in a favourable phase, with the country expected to add at least 179 million people to its working-age population by 2045, offering a potential boost to economic growth. This comes as demographics in many regions, including China, are becoming less advantageous, according to a new report.
Currently, India’s working-age population stands at around 961 million, and the unemployment rate is at a five-year low.
Global investment firm Jefferies highlighted that India's growing working-age population (ages 25-64) as a percentage of the total population will have positive effects on savings and investments.
Additionally, India is seeing an increase in its female Labour Force Participation Rate (LFPR), which will be a key driver of labour force growth, alongside favourable demographics.
While labour force expansion is expected to slow to 6 million annually by 2030, a shift away from agricultural jobs should help close the gap, the Jefferies report noted.
According to data from the Ministry of Statistics, the LFPR in urban areas for individuals aged 15 and above increased from 48.8% in April-June 2023 to 50.1% in the same period this year, reflecting rising employment levels.
The LFPR for women aged 15 and above in urban areas also rose, from 23.2% in April-June last year to 25.2% during the same period this year.
Another employment indicator, the Worker Population Ratio (WPR), increased in urban areas among people aged 15 and above from 45.5% in April-June 2023 to 46.8% in April-June 2024.
Reserve Bank of India (RBI) data shows a significant increase in employment over the past decade, with a rise of 170 million jobs. Employment in the country reached 643.3 million in 2023-24, up from 471.5 million in 2014-15.
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