'In 25 years, no state will have surplus labour': Shamika Ravi warns India's workforce window is closing

India's fertility decline is happening faster than predicted - and it's already well underway in cities. Prime Minister's Economic Advisor and economist Shamika Ravi says the country is facing a deep demographic transition, but public discourse and policy remain stuck in outdated frameworks.

"What we are seeing in urban India is that women are either not having children or having remarkably fewer children, and this shift has happened very quickly," Ravi said in an interview with Outlook Business. "Urban India has had below-replacement fertility rates for the last 25 years. Red flags have been raised...it is a phenomenon we must acknowledge."

According to the UNFPA's 2025 State of World Population Report titled The Real Fertility Crisis, India's total fertility rate has now fallen below the replacement level, even as its population is estimated to reach 1.46 billion, the highest in the world. The report urges policymakers to shift focus from panic over declining fertility to addressing unmet reproductive goals, noting that "millions of people are not able to realise their real fertility goals." 

The issue, according to Ravi, is not just about income levels or development. Drawing comparisons with South Korea and Japan, she explained: "With rising female labour force participation, if the gender roles at home do not shift, you are going to see a very sharp drop in fertility rates. That is the crisis we are seeing."

India's demographic profile is already shifting. "We already have around 150 million people above the age of 60," she said. "In about 20 years, the working-age population will be much smaller than it is today. But our elderly population will keep increasing, because we are living longer. So the big question is: who is going to pay?"

She added that the conversation around population in India still suffers from legacy thinking: "In India, there is still a mindset that population is a problem. That thinking has to change completely. It needs a 180-degree shift. Population is our biggest strength...Our economic growth is driven by labour."

Ravi also pointed to significant rural-urban contrasts in how fertility and workforce participation are unfolding. "In rural India, female labour force participation has risen by 69% over the last 10 years. In contrast, in urban areas, women’s labour force participation is nearly half of what it is in rural areas, and fertility is also much lower."

On the political silence around fertility, Ravi noted, "We need real-time data at more localised levels. Talking about India as a whole is like talking about a continent." She warned against one-size-fits-all prescriptions: "Telling people to have fewer children is not logical for places where fertility has been below replacement for 25 years."

She also called out the flawed belief that fertility rates can be reversed through political messaging. "Even when politicians today say, ‘Have more children,’ it would not make a difference. Nobody will have more children just because politicians are asking. No way."

Shamika Ravi also warned that India cannot afford to rely indefinitely on surplus labour from certain states. "There is also an assumption that workers from the North will continue migrating south, and that this labour oversupply will persist," she said. "But we are saying that give it another 25 years. There will be very few states with surplus labour."

Looking ahead, Ravi said India’s strength lies in internal migration. "That is what will sustain economic growth in regions experiencing rapid development and industrialisation."

She also underscored the growing global demand for India's STEM talent. "Canada opened new High Commissions in Bengaluru and Tel Aviv. What do they have in common? Young engineers. Engineers who will go to Canada and contribute to paying for their ageing population’s pensions."