This paper reviews the relation of population, human capital formation and economic development of Madhya Pradesh from 1951 to 2011. It also examines that how developing countries like India can utilize their increasing population for the economic growth of the country. Demography variables suggest that rapid population growth would put more strain on limited national resources. This will adversely affect the economic growth and employment. Expansion policies are needed to provide productive employment to the growing labour force and human capital formation is necessary for the economic development of state. further policy guideline is provided for sustainable economic development The impossible trinity of cost, quality and scale in employability arises from a market failure in skills; employers are willing to pay for trained candidates and students are not willing to pay for trained candidates training but for jobs. Innovation lies at the intersection of jobs and training. A bigger problem is figuring out how to use government money for private and public delivery honestly, sustainable and at scale. Fixing skills also means fixing school education because employers know that you cannot teach somebody in six months what they should have learnt in 12 years. Making NREG an apprenticeship programme and converting employment exchanges to career centre’s would help in making people employable before they migrate because in the short run we cannot take jobs to people but need to take people to jobs. School and higher education need a massive dose of deregulation, competition and innovation. This need acknowledging that (a) quantity leads to quality, (b) the most expensive school is no school (c) a bad school is better than no school and, (d) what matters is whether a school is private or government but good or bad. The current license raj in education creates an adverse selection amongst education entrepreneurs. Harnessing India’s demographic advantage does not lie in poetry but in plumbing. Not in strategy but in execution. Not in legislating rights but in creating opportunity. Our demographic dividend-depends on a radical overhaul of our education, employability and employment ecosystem. Forecasting pertaining to important variable has been provided for future planning on the topic. It may provide a good guideline for research and a strong base for future manpower planning and human capital formation in India.