Here Comes the Boom

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India will overtake China as the world’s most populous country by the middle of 2023, according to a recent United Nations report, a development that will likely present opportunities and challenges for the South Asian nation, the Wall Street Journal reported.

The UN estimates that India will have 1.4286 billion people by July 1, surpassing China’s population of 1.4257 billion by nearly three million people.

The milestone further underscores India’s continuing population boom as the country is expected to grow in the next 40 years, peaking at almost 1.7 billion. Meanwhile, China’s population, which decreased for the first time in decades last year, is expected to fall significantly in that period.

India’s population boom has prompted discussions among economists over a “demographic dividend,” a one-time window spanning a few decades when a country has more working-age people than young or elderly dependents. That window closes when the population ages and the cost of caring for dependents rises.

The phenomenon initially helped China’s economic rise but is now closing following the nation’s controversial one-child policy that helped speed up the country’s aging process.

India’s pool of young people – 610 million are under the age of 25 – is growing just as many Western firms are looking to expand operations outside of China into countries with cheaper labor.

But others warn of caution, saying it could become difficult for the government to create enough jobs for a booming population.

Over the past decade, India has added zero net new jobs, owing in part to the coronavirus epidemic, despite the fact that over 100 million individuals have entered the labor force.

In March, the country’s total labor-force participation rate was about 40 percent, compared with more than 62 percent in the United States.