How bad political equilibrium in India makes for bad economics

This is the second of a two-part series. Read the first part here.

India’s youth population is growing rapidly, fueling mindless predictions of a demographic dividend that will power a surge in savings, investment, and growth. For 75 post-independence years, India has failed to create adequate numbers of dignified jobs, pushing the country toward a dangerous tipping point. With job opportunities scarce and new job-seekers multiplying, India is rushing into an imminent demographic disaster.

Recently, 25,000 applicants showed up for the recruitment of 2,216 airport loaders, resulting in a stampede-like scene as desperate seekers vied for attention. In another instance, 1,800 aspirants arrived for just 10 jobs, causing chaos and risking safety. Such episodes, one particularly horrifying example of which I narrate in my book’s Epilogue, occur daily across the country. Private businesses hire too few, leaving most job seekers to pursue government jobs. From 2014 to 2022, 220 million young Indians applied for just 0.75 million government positions. The simmering frustration increasingly finds expression in violent reactions.

The simple truth is India faces a mind-boggling jobs’ challenge. Of the country’s 1.4 billion people, about a billion are of working age (15 years or older). Of these, about 670 million are in the workforce, the other...

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