The general view of India is one of a country with a burgeoning and young population (more than 1.25 billion people with a national fertility rate of 2.3), hence the prospects for growth in terms of consumption and production is usually seen as a blue skies scenario.

The devil as usual is in the details.

The fertility rates of 11 states comprising 43% of India’s population is below 2.1 (ie. below replacement rate). The least fertile states are West Bengal (1.6), Punjab (1.7), Himachal Pradesh (1.7) and Tamil Nadu (1.7). Unsurprisingly, these 11 also tend to be the wealthier and more developed states. Their average GDP per capita is nearly 110,000 rupees and literacy rates are generally well above 75%, mainly above 80% and even reaching 94% in the case of Kerala.

The fertility rate in the states holding the other 57% of the population ranges from Haryana (2.2) all the way to Bihar (3.4). And no surprise, their average GDP per capita is well below 70,000 rupees and literacy rates are generally lower, in many cases well below 70%. The major state with the lowest literacy rate is Bihar at 64%.

India’s national literacy rate is around 75%. Contrast that with Vietnam (94%), Indonesia (93%), Philippines (95%) and China (95%).

David Fuller's view

Here is Bernard Tan's Report.

India has a huge population of 1.3 billion, most of who live in conditions of extreme poverty.  India also has an educated and increasingly middleclass population approaching 200 million, but as Bernard Tan points out, that is only 15 percent of the total population. 

The only possible solution to this problem is strong economic GDP growth over decades, and improved education for all.  These are obviously enormous challenges.  I maintain that India has the right leader for this challenge in Narendra Modi.  Governance Is Everything.

India also has an increasing number of world-class corporations.  Those of us who have invested in India’s stock market, are backing India’s economic growth and corporate governance.