India’s young population will keep consumption demand high for the next three decades, underpinning rapid growth in the economy, Finance Minister Nirmala Sitharaman said.

“The window of the demographic dividend will be there with us for the next 30 years,” Sitharaman said Friday at the annual business summit of industry lobby group, the Confederation of Indian Industries, in New Delhi.

The dependency ratio of the young workforce - a measure of the economic burden on the population - is expected to decline to historical lows, meaning “the net benefit is going to be towards more increasing consumption”, she added.

Consumption fuels nearly 60% of India’s gross domestic product, and a boost would mean the world’s fifth-largest economy will keep up with its high growth rate for decades. That will boost India’s contribution to global growth, which the International Monetary Fund estimates will rise to 18% by 2028 from 16% in 2023.

“The fastest-growing economy will continue to remain as the fastest-growing economy for the next few years as well,” the finance minister said.

To help sustain the growth and ensure job creation, “India’s manufacturing must increase”, Sitharaman said. “We need to have greater sophistication in our product manufacturing and we also need to see how best this can be given policy support.”

Other highlights of her speech:

• The balance sheet strength of both the corporate and the finance sectors remain strong, and will help the economy going forward
• The private sector is a partner in India’s goal of transforming the country into a developed nation by 2047
• Policy stability, facilitating legislative changes is helping India’s growth

  - Bloomberg