The wages of a K-shaped economy: India’s demographic dividend may be slipping away

Subscribe to enjoy similar stories.Among several distressing data points in the recently published The State of Working India 2026, a detailed vivisection of India’s demographic bulge by scholars at Azim Premji University (APU), a few vividly stand out. While India now produces 5 million graduates every year, salaried employment is only a fraction of that at 1.7 million annually. “This has also contributed to a slowdown in graduate earnings,” the report notes.

Meanwhile, 13 million Indians join the working-age population every year. As aspirations rise, many acquire college degrees of sadly variable quality to compete for too few jobs. The report says that 15- to 29-year-olds account for about a third of India’s working-age population, of which about 263 million are not in education.The report notes that in almost eight decades since Independence, while India has made substantial progress educating its population, “unregulated growth of institutions at the cost of quality of training, lack of institutional resources, and outdated curriculums [erode] the screening/signalling and human capital enhancing roles of education.” The collision of high hopes with harsh realities of the K-shaped economy should worry anyone tracking the country.

“There is a broader story of wage stagnation in India,” Amit Basole, one of the report’s authors said. To read the report in the aftermath of worker protests in Noida is doubly unsettling. It is time we retired the myth of a demographic dividend from our national narrative.

Instead, we are well on our way to demographic disappointment. Macro trends and microeconomics have never merged quite so tragically. With hundreds of millions precariously employed on close to subsistence wages, India