One fine day I discovered the dictation is not working on my Lumia phone. Then I started finding some information about how to activate. I found out that it had something to do with keyboard settings and speech language. When I tried to more things. My Cortana, setting was to use English language for India and location was India. Earlier, I tried many more settings, but nothing worked. My default keyboard language was USA English. The microphone was appearing but it was not accepting my dictation. Then I change my keyboard language to English, India, and tried dictation. To my surprise it started working. It had nothing to do with Phone settings. The key to solve this problem was to use same language for keyboard and for dictation which should be same as Cortana settings.