Demographic factors have reappeared in the economic development debate with the emergence of the concept of the “demographic dividend”. With many developing countries experiencing a rapid decline in fertility, there has been overwhelming optimism that a demographic bonus will take these countries to greater economic heights. At the same time, there are pessimists doubting the ability of these countries to take advantage of the demographic dividend. This paper looks at the concept critically in the context of India. It tries to empirically estimate the contribution of the age structure change to economic growth in the country through a two-stage least square method. The empirical analysis clearly exhibits a powerful positive impact of the boom in the working age group population on economic growth. This is despite the fact that the educational achievements and health conditions of the people are far from desirable and employment creation is well below the required level.