India’s business-as-usual will waste its demographic dividend

India, in short, is in its demographic prime. In order to capitalise on its potential, however, it must find productive employment for its enormous working-age population. In theory, at least, this ought not pose much of a challenge. China — facing a much different, much less favourable demographic reality — is looking increasingly likely to vacate its position as the world’s factory, owing to higher labour costs and a need to rebalance towards domestic consumption.

With the right policy settings, India could…