Demographic Transition and Green Economic Transformation: Evidence from India with Insights from Telangana

Abstract

This study examines the relationship between demographic transition and green economic transformation in India, with particular insights from the state of Telangana. While demographic transition theory traditionally emphasizes the role of changing age structures in promoting economic growth, its implications for environmental sustainability remain less explored in developing economies. Using state-level panel data for the period 2005–2023, this research constructs a composite Green Economic Transformation Index (GETI) incorporating indicators such as renewable energy share, emission intensity, and ecological performance. The empirical analysis employs fixed-effects panel regression and dynamic System GMM estimation to evaluate the impact of demographic and structural factors on sustainability outcomes. The results indicate that a higher working-age population share significantly enhances green economic transformation, primarily by supporting renewable energy expansion and facilitating structural economic change. Conversely, higher dependency ratios constrain sustainability investments due to increased fiscal pressures. The findings further show that structural transformation toward industry and services and the expansion of renewable energy play a crucial role in reducing emission intensity. The Telangana case study illustrates how subnational policy initiatives, demographic advantages, and renewable energy expansion can collectively support sustainable development pathways. The study concludes that India’s demographic window presents a time-sensitive opportunity to integrate population dynamics with low-carbon development strategies through coordinated demographic, industrial, and environmental policies.