s favourable demographic dynamics. india's population, once regarded as a malthusian curse, is now regarded as its greatest asset in an inter - temporal perspective, especially when the rest of the world ages rapidly and populations shrink. today, every sixth working age person in the world is an indian. with a median age of 28 years, the share of the working age cohort in the total population will keep rising upto the mid - 2050s, with commensurate benefits in terms of growth in income and savings. india's demographic dividend is expected to last for more than three decades. every effort must be made to reap this opportunity. another growth multiplier is india's digital revolution. india is emerging as a world leader in leveraging digital technologies for transformative change. the trinity of jam – jan dhan ( basic no - frills accounts ) ; aadhaar ( universal unique identification ) ; and mobile phone connections – is expanding the ambit of formal finance, boosting tech start - ups and enabling the targeting of direct benefit transfers. india's unified payment interface ( upi ), an open - ended system that powers multiple bank accounts into a single mobile application is propelling inter - bank peer - to - peer and person - to - merchant transactions seamlessly. payment systems in india operate on a 24 by 7 by 365 basis. functionalities like offline payments, payments through feature phones and conversational payments have been incorporated. the internationalisation of the upi is progressing rapidly. headwinds india's progress towards its developmental ambitions will encounter challenges or what are termed in monetary policy analysis as downside risks. successfully navigating them will test the conduct of monetary policy as india forges ahead to seek its destiny. the key to harnessing the demographic dividend is in raising the contribution of the labour force to gross value added. in spite of recent improvements in job creation and rewards to higher skills, the shares of both quantity and quality – which refers to returns to skill formation – of india's labour is low by international standards. in terms of appropriate skills for a specific job, only 51 per cent is employable, warranting concerted efforts to re - skill and upskill the work force in tune with changing job requirements and technological change3. more than 80 per cent of the workforce is employed in the informal sector and this highlights the need for expanding the formalisation of employment. furthermore, india ranks low in women

liquidity keeps declining, as determined by the banks, there may be pressure on short rates to increase. to this picture we also have to add the international dimension – notably the risk of spillovers from the us. we already saw that the announcement of a tapering of outright purchases resulted in higher money market rates in europe. in this overall context, we decided to introduce an important change in our policy, announcing a form of forward guidance. we stated that we will keep our key interest rates at bis central bankers ’ speeches present or lower levels for an extended period of time, dependent on our assessment of medium - term prospects for inflation. it should be noted that, although compatible with our monetary policy framework, this represents a real innovation in our instruments. it is conditional, it has a negative bias and this forward guidance will change only when we change our assessment of the impact of economic and monetary conditions on inflation prospects. the new policy has already produced visible effects : the whole forward curve of euro rates up to two years came down immediately after our announcement. although it has in the meantime increased somewhat, it remains stabilised at levels lower than we saw before our announcement. for the future, we are as usual data - dependent – but if declining excess liquidity were to put undue upward pressure on short - term rates, we would have to address this problem. we still have several policy instruments available in our toolbox and will use them as needed. we will continue to manage liquidity conditions so as to maintain a stable monetary and economic environment that ensures our main goal of medium - term inflation below but close to 2 %. thank you for your attention. bis central bankers ’ speeches