India needs 9% annual growth to avoid ageing before getting rich

India must grow at 9% annually for the next decade and at 8% for the decade after that to become a high-income country before its population ages, according to a new book by economists Santosh Mehrotra and Jajati Parida. The book, India Out of Work: Rethinking India’s Growth Story, warns that India’s demographic dividend ends in 2040 and its population will start shrinking from 2062. The current 6.2% growth rate is inadequate, the authors argue, and there are no shortcuts.

The book highlights that India’s labour-force participation rate is only about 45% against the global average of over 60%, and female participation is stuck at around 21%. Employment in manufacturing contracted for five consecutive years from 2016, and reverse migration has swelled agricultural labour by nearly 80 million. The authors link these problems to demonetisation, the poorly structured GST, and a mishandled COVID-19 response that broke the back of informal non-farm sectors.

Fewer than 25% of Indian workers hold regular jobs with social security, compared with 53% in Vietnam and 92% in Germany. The authors argue for inclusive growth that raises human development, not just GDP, and say policymakers must focus on the pattern of growth, not just the overall rate.