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:

1. Economic development –
   • Aim of $5 trillion economy impossible without investment in human resource.
   • g. Service sector dependent on skilled individuals.
2. 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.
3. Environmental sustainability –
   • Climate resilient agriculture, smart industry etc are dependent upon the human capital.
4. 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.

Topics: GS-I: Social Empowerment Communalism Regionalism Secularism • GS-II: Social Sector Services Education Human Resources