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.


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