Examine the need of urgent investment in human capital formation for India.
With 54% of population below the age of 25 years, demographic dividend is India’s most critical asset.
Human capital formation:
- Refers to acquisition of skills and increase in productivity of workforce through investment in education and health.
- Demographic dividend began in 2008 and will peak by 2046.
- Largest share of English speaking, young workforce.
- Need investment to check dividend turning into demographic disaster.
Why critical for India:
- Economic development –
- Aim of $5 trillion economy impossible without investment in human resource.
- g. Service sector dependent on skilled individuals.
- Social development –
- Rising poverty, unemployment and social tensions can be effectively checked.
- Investment in health can lead to better productivity, reduce out of pocket expenditure, reduced poverty incidence.
- Environmental sustainability –
- Climate resilient agriculture, smart industry etc are dependent upon the human capital.
- Political gains –
- Social justice (article 38) – reduction in inequality, gender balance need investment in human resources.
Way forward:
- Increase investment in social infrastructure.
- Promote vocational educational (NEP 2020) and skill acquisition.
- Reduce inequalities through gender sensitive policies.
Human capital is our biggest strength and must be leveraged in our quest for being global super power.
Originally written on
April 18, 2023
and last modified on
October 27, 2024.