With the proportion of people above 60 years of age crossing 7% of the total population, India will soon be joining the list of aged countries by the next 50 years. Given the socio-economic structure and being the second largest most populated country in the world, the process of demographic transition in India would be different from that of the developed world. With around 72% people living in the rural areas, it is all probable that ageing in India would predominantly be a rural phenomenon. This process of rural ageing would further be accelerated by the process of migration of young from the rural areas to urban areas and returning of old back to their native villages. The article aims to analyze the multifarious effects of ageing on the economy and critically examines the existing policies for the aged.