Every third person in an Indian city today is a youth. In about seven years, the median individual in India will be 29 years, very likely a city-dweller, making it the youngest country in the world. India is set to experience a dynamic transformation as the population burden of the past turns into a demographic dividend, but the benefits will be tempered with social and spatial inequalities.

These are some of the findings of the ‘State of the Urban Youth, India 2012: Employment, Livelihoods, Skills,’ a report published by IRIS Knowledge Foundation in collaboration with UN-HABITAT.

A closer analysis of the urban youth suggests that greater political participation, engagement at a policy level and urgent attention to improving their quality of life can ensure that India enjoys the benefits of this dividend.

The report traces the incredible rise — and the eventual decline — of this cohort in India. The population in the age-group of 15-34 increased from 353 million in 2001 to 430 million in 2011. Current predictions suggest a steady increase in the youth population to 464 million by 2021 and finally a decline to 458 million by 2026.

By 2020, India is set to become the world’s youngest country with 64 per cent of its population in the working age group. With the West, Japan and even China aging, this demographic potential offers India and its growing economy an unprecedented edge that economists believe could add a significant 2 per cent to the GDP growth rate.

But the report suggests urban spaces have not necessarily aided the quality of life enjoyed by Indian youth. A telling sign: one-fifth of the Indian urban population lives on less than a dollar a day. Additionally, the report finds that while income levels in cities may appear to be higher, the cost of living is also constantly increasing, resulting in shrinking savings, inadequate access to health care and lack of quality education. Maternal mortality remains the ‘top cause of death among young women.’ Further, more than half of young urban women are anaemic, pointing to inadequate food and nutrition.

The report’s findings indicate that the problem is not urbanisation per se but the inequalities that it seems to accentuate.

While India is undergoing a demographic transition, regional disparities in education mean the benefits will not be evenly spread across the country. The report says the southern and western States will be the first to experience a growth dividend as they accounted for 63 per cent of all formally trained people. The largest share of youth with formal skills was found in Kerala, followed by Maharashtra, Tamil Nadu, Himachal Pradesh and Gujarat. Among those undergoing training, Maharashtra had the highest share, Bihar the lowest.