India’s demographics are in a sweet spot, and the country is projected to add at least 179 million people to its working-age population by 2045, which can be a significant tailwind for economic growth, particularly as demographics in several parts of the world (including China) turn unfavourable, a new report has said.
At the moment, India’s working-age population is around 961 million, and the unemployment rate is at a five-year low.
India’s working-age population (age 25-64) is rising as a proportion of the total population, which will be a positive for savings and investments as well, according to global investment firm Jefferies.
A rise in the Labour Force Participation Rates (LFPR) of females has started in India, which will be among a key driving force for expansion of the labour force, alongside demographics.
Labour force addition is expected to slow to 6 million by 2030 but the gap should be filled by the shift from agriculture jobs, said Jefferies in its latest note.
According to August data released by the Ministry of Statistics, the LFPR in India’s urban areas among persons aged 15 years and above has increased from 48.8 per cent during April-June 2023 to 50.1 per cent in April-June this year, reflecting an increase in employment in the country.
As per the data, the LPFR for females of age 15 years and above in urban areas also increased from 23.2 per cent during April-June last year to 25.2 percent during April–June this year.
The Worker Population Ratio (WPR), another employment indicator, also went up in urban areas among persons aged 15 years and above from 45.5 percent during April-June, 2023 to 46.8 percent in April-June, 2024.
As per the RBI data, the total increase in employment during the last 10 years stood at about 17 crore. It showed that employment in the country increased to 64.33 crore in 2023-24, compared to 47.15 crore in 2014-15.
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