India is heading into a demographic debacle

State of Working India (SoW) report says India’s demographic bulge will stop expanding in four years. The share of its working-age population will begin declining in 2030.

But 263 million of the 367 million 15-to-29-year-olds, who comprise the potential workforce, are not in classrooms despite rising enrolment of young people in higher education courses, primarily driven by women.Young men are not so enthusiastic about higher education, especially after the pandemic. Their share has fallen from 14% just before the national lockdown to 12% in the last quarter of 2024.

They largely feel obliged to support family incomes rather than attend classes, the survey found.As of 2023, 77% 15-to-24-year-old men swapped the classroom for a workspace. It perhaps also speaks to the financial despair in the wake of the pandemic.

Government data shows that while reasons vary, more than 200,000 companies shut down in the five years up to December 2025.The 2003-08 economic boom was driven by massive investment and hiring by private sector companies. Private companies accounted for nearly three-fourths of investment in 2007-08.

That share declined to less than a third of overall investments in 2023-24. The roughly 15 years beginning with the global financial crisis and ending with the pandemic, interspersed with disruptions caused by the 2016 demonetization, followed by a clumsy introduction of the goods and services tax (GST), robbed the job market in India of a smooth transition from informal sector dominance to supremacy of the formal economy.The labour market changed dramatically in that period, with formal-sector jobs shrinking relative to the share of job seekers, while gig work rose with the rapid expansion of e-commerce and