India is experiencing a significant demographic advantage known as the 'demographic dividend.' India is (and will remain for some time) one of the youngest countries in the world. A third of India’s population was below 15 years of age in 2011. In 2020, the average Indian was only 29 years old, compared with an average age of 37 in China and the United States, 45 in Western Europe, and 48 in Japan. This youthful population implies a large and growing labor force, which can deliver unexpected benefits in terms of growth and prosperity. The ‘demographic dividend’ results from an increase in the proportion of workers relative to non-workers in the population. In terms of age, the working population is roughly that between 15 and 64 years of age. This working age group must support itself as well as those outside this age group (i.e., children and elderly people) who are unable to work and are therefore dependents. Changes in the age structure due to the demographic transition lower the ‘dependency ratio’, or the ratio of non-working age to working-age population, thus creating the potential for generating growth. India is indeed facing a window of opportunity created by the demographic dividend. The effect of demographic trends on the dependency ratio defined in terms of age groups is quite visible. The total dependency ratio fell from 79 in 1970 to 64 in 2005. But the process is likely to extend well into this century with the age-based dependency ratio projected to fall to 48 in 2025 because of continued fall in the proportion of children and then rise to 50 by 2050 because of an increase in the proportion of the aged.