Human Capital Issues in India

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With the population touching 1.2 billion, half of which is around 25 years of age, India is set to be among one of the top countries for human capital in the next two decades. While the country has been making rapid progress economically, human capital additions may remain marginal and may not keep up with the pace of economic growth unless accompanied by planned development of manpower.


• India’s major employment generator IT-services has witnessed tremendous pressure through automation, digitisation, cloud computing and restrictions to outsourcing among developed countries.

• There is a growing gap between job creation and the needs of our machine-powered future. We therefore have to embark upon a journey of continuous adjustments to develop, utilise, and maintain human capital and social cohesion.

• Increasing population unfavorably influences the nature of human capital in underdeveloped and developing nations like India. Hence, it diminishes per head availability of existing means like sanitation, jobs, drainage, water purification system, city plan, hospitals, education centers, training centers, food supply, nutrition, roads,
• electricity, power, and so forth.

• Migration of highly talented workers is ‘brain drain’. As a result, this proves to be a hindrance to the procedure of human capital formation in the home country.

• There is immature labor planning in developing nations where no efforts have been made either to increase the standard of training at various stages to keep up the demand and supply of technical labor.

• The procedure of human development is a long haul approach since skill arrangement requires some duration.

• In India, the development assistance for health for a population of 1.3 billion is a total of $650 million out of which the majority is provided for child and newborn care ($230 million) and maternal health ($110 million). India spends less than 3 per cent per capita compared to the US and only about one-third that of China.

• A good amount of population lives underneath the poverty line and don’t have access to basic wellbeing and education. Therefore, a substantial segment of society can’t bear to get an advanced education or costly health treatment for major diseases.


• As the future grows more uncertain, the only way forward is to strengthen the core of the country — and predictably India’s core opportunity is its human capital.
• There needs to be a cohesive plan to fundamentally strengthen this workforce so that India does not miss the bus on the fourth industrial revolution. Health and education will be the first basic inputs to develop and sustain a healthy, highly skilled workforce.

• The need of the hour is to overcome institutional inertia and outdated socio-cultural norms so that the gap between widening skills gaps and skilling systems can be bridged.

• Integration of higher education with skills and vocational education; attracting the most credible talent to the teaching profession; building global recognition to the education system; and streamlining regulation to attract credible private sector entities to education are some structural changes which are needed for transforming education.

• A well nourished and healthy population is necessary for building a futuristic workforce.

• A four pronged approach is required:

o Raise public healthcare spend to 3 per cent of GDP;
o Increase commitment to Non-communicable diseases at par with infectious diseases;
o Develop a sustainable mechanism to fund universal healthcare;

• Build a robust referral and preventive healthcare mechanism to reduce burden on tertiary-care.

• Access to high speed internet, multidisciplinary learning, design thinking, data science and information filtration capabilities are quintessential for making a future ready workforce.

• The best foot forward is to develop a human capital that is physically and emotionally vibrant, flexible and possesses multiple skill sets to be able to seamlessly move around the blurring dividing lines among various industries.

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