She also remembered the young Pakistani victim Malala Yousafzai while addressing the gathering at the annual WEF meeting.
"I dedicate the moment (of addressing WEF annual meet) to Malala, daughter of Pakistan, and another daughter in India ('Amanat', NOT her real name)," the International Monetary Fund chief said.
Touching upon India, the IMF managing director rued that policymakers had failed to pay attention to the crucial issues of equitable distribution and gender equality.
"... But you will ask what it has to do with economy. It is indeed about economy and equality and bringing in prosperity. No policymakers have paid enough (attention) to the fact that more equal distribution of income would help in supporting women better. Gender inequality is also very important and the policymakers have not paid enough attention to either of the two. The fact is when women do better the country does better and policymakers need to understand this," Lagarde said.
In a case that had shocked the nation and triggered protests in India, 'Amanat' (NOT her real name) was brutally gang-raped in a moving bus in New Delhi on December 16 last year. She died two weeks later.
Earlier in October, Pakistani teenage activist Malala became that target of Taliban militants. She was shot in the head for campaigning for girls' education and had to be flown to the UK for medical treatment.
"Let me turn to what I see as the second major aspiration of the new generation and the new global economy: stronger inclusion. Our close-knit world is a participatory world. The new generation demands opportunities for all and insists on tolerance, respect, and fairness for all," Lagarde said.
"Just look at some recent examples - from the yearnings on the Arab Street for greater dignity and opportunity, to the brave cry of young women for education and equality, and to the heartfelt urge of Indian women for greater respect and justice. These demands must be met," Lagarde said.
She also stressed on the need to fight against climate change. "If we don't take action regarding climate change, our future generation will be roasted, toasted, fried and grilled".
By 2025, she said that two-thirds of the world population would be in India and the youth is going to be a strong force across the world.
"How can we successfully navigate in this world of future? This new generation sings differently. There are Facebook and Twitter and if we rank them as countries they would be third and fourth largest in the world," she noted.
The IMF chief also said that there should be zero tolerance for corruption, besides there should be a sense of accountability in tackling the global crisis.
"Things are changing but we need to see more and better changes in 2013... We need cross border cooperation on issues like shadow banking and derivatives. If we look beyond short term we would indeed move past the crisis," she added.