Can India chart own path to economic prosperity?

A QR code on a roadside fruit stand in Mumbai, India. Note from the Editor: Your subscription to Finance & Commerce includes business content from The New York Times. According to the latest U.N. estimations, India's population is expected to surpass mainland China in a few years.

India will become the most populous nation in history as China's population declines. India's exact date of attaining this distinction will depend on the way you count. If you include Hong Kong into China's numbers, it could happen next year.

India's size is unlikely to be surpassed by any other country for many centuries. India, once known as the world's biggest democracy, is now simply 'the largest' of everything.

China has changed the world more than anyone else in the last generation. Will India be able to do the same in the next generation?

Can India make the most of its size?

India's growth rate is envied by countries such as China that are aging, but there are differences in the demographic future of India depending on the region.

India and China once wanted to reduce the population growth rate by reducing births. This era is long gone.

India's gentle demographic curve, which has propelled it to first place in the world rankings, is envious of many other developed countries that are rapidly ageing. Indians are living longer and the number born every year has barely changed. India, unlike China, is not facing the economic and social risks associated with the one-child-policy. India has a growing and young workforce, while China's is aging and contracting.

In certain regions of India, the population continues to grow too quickly for their economy, resulting in a surplus of young, able-bodied people compared to available jobs. In some areas, the population is already at its peak. This is especially true in the more developed south where women are better educated and family planning has been successful. In these areas, young couples rarely have more than two kids.

India's environment is under severe strain due to the physical demands of almost a billion-and-ahalf people. As India rises out of the deepest levels of poverty, the country is no longer prone to the famines that it was once afflicted with. Its future as the largest workforce in the world is leading to some hope that an "Indian Century" will be on the horizon.

Is India poised to reap a "demographic dividend"?

A rapidly expanding young workforce can be an opportunity or a disaster.

India is a nation that is ready to work. Over two-thirds (67%) of Indians are aged between 15 and 59. Children and retirees are a small proportion of the country's working-age population.

This opportunity is not without its challenges. This 'demographic divide' could also turn into a disaster. India barely edged out China in recent years to become the fastest-growing large economy. It has not expanded quickly enough to create formal employment for all. It is estimated that India needs to create 9 million jobs per year to keep up with the pace of global economic growth.

In India, most people do not have the ability to be "unemployed" -- that is, in the workforce without a job. The more subtle danger is underemployment. According to Jean Dreze's analysis, the wages have stagnated for eight years. India's already unequal society could become even more unjust if economic growth is not accompanied by an increase in employment.

Can India attract more women to the workforce?

India has a lower rate of women working outside the home than nearly any other country. This is a major roadblock to economic growth.

India has the lowest rate of women employed in formal jobs worldwide: 1 out of 5. China's rate is nearly double the United States and world average. When women's contributions are so low, an economy can never reach its full potential.

It is also alarming that the rate in India has decreased even though the majority of the economic conditions in the country have improved. Economists believe that because the jobs women do are poorly paid, they stop working as soon as their families can live without it.

This does not mean that women in India don't work hard. In the 41% of Indian society that still works in agriculture, they are visible and carry the majority of household responsibilities. As long as they remain outside of the formal workplace, these women will not be able to enter its most productive sectors, such as industry and services. Better access to family planning and education, as well as efforts to change attitudes in society, could encourage more women to take formal jobs.

Can India chart its path to prosperity on its own?

India's story is not a repeat of China's, which may offer some advantages.

When China began to accelerate market reforms in the early 1990s it followed the example of other East Asian countries -- Japan, South Korea and Taiwan -- becoming a leader of manufacturing based on exports. The Chinese economy is now five times larger than India's.

Western countries are now eager to embrace India as a viable alternative to China. The obstacles that prevented India from following this program for the past 30 year remain: ineffective government, inadequate infrastructure, low spending on health and primary education, and laws restricting the use and ownership of land.

The 'Make in India" program, championed for eight years by Narendra Modi as Prime Minister, has not taken off. As labor costs in China have increased, Vietnam and Bangladesh have taken on more of the production that was once produced by Chinese factories.

India's story will not repeat China's, no matter what. India has many opportunities to rise, particularly now that industrial manufacturing is no longer the dominant force in the global economy.

India's economy is dominated by services, which are a large and exciting component. This is complemented by the low-cost digital infrastructure it developed itself. Online services allow millions of Indians to work overseas without having to leave their homes. Even the villages in India are becoming more urbanized.

The new largest country in the World will be different from any other.

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