What is the biggest hurdle India is likely to face in order to realize its demographic dividend?

India is indeed in the midst of a process where it faces the window of opportunity created by the demographic dividend. During the first two decades of post-Independence development, while infant mortality rates fell significantly, the fertility rate was more or less stagnant. This would have increased the population of young people significantly, merely because of greater child survival.

In the three decades since then, though the fertility rate has been declining, the infant mortality rate has fallen quite sharply, with possibly the same effect.

One consequence of these trends is the sharper fall in the crude death rate than the birth rate , though declining mortality in the higher age groups would have influenced this as well.

The effect of these trends on the dependency ratio has been along expected lines. The total dependency rose initially because of a rise in the child dependency ratio and stagnation in the old-age dependency ratio.

Subsequently, it began to fall (from 79) in 1970 as the child dependency ratio fell with the baby boomer generation moving into working age groups and with old-age dependency rising only marginally because of reduced death rates in older age groups. It is estimated to have fallen to 64 in 2005. Thus India had begun to reap the demographic dividend around 1980. But the process is likely to extend well into this century with the dependency ratio projected to fall to 48 in 2025 because of continued fall in the child dependency ratio and then rise to 50 by 2050 because of an increase in the old-age dependency ratio as the bulge moves forward and the death rate in the older income groups declines.