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Demographic Transition in India
January 28 , 2026
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- The Reserve Bank of India (RBI) report “State Finances: A Study of Budgets of 2025-26” highlights demographic transition in India.
- India’s median age is 28 years, with the working-age population at a historical peak.
- States like Bihar and Uttar Pradesh have a high share of young population, creating growth opportunities.
- States like Kerala and Tamil Nadu have ageing populations, a shrinking labour force, and rising pension and interest expenditures.
- Ageing states face higher debt-to-Gross State Domestic Product (GSDP) ratios and higher interest payment-to-revenue receipt ratios.
- RBI suggests investing in education, skilling, and healthcare for young states, and promoting flexible work, raising retirement ages in ageing states.
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