Japan, the small island country, is devoid of any major natural resource. It is frequently impacted by disasters like Tsunami and Earthquake. Still, it is the third-largest GDP of the world in nominal terms, after the USA and China. While, the Democratic Republic Of Congo, the African country, endowed with rich resource deposit does not feature even in the top 50 GDP of the world. In fact, it is currently at the 88th position. Similarly, Jharkhand, the most mineral-rich state of India, also lags on the development parameter. The answer to this dichotomy lies at the heart of the understanding of growth and development.
The human capital of a region is contributed by the people of the region and their standard of living. The Standard of living is an overarching concept that cuts across many domains. It has been appositely captured in the Sustainable Development Goals (SDGs) announced by the United Nations in 2015. It includes poverty reduction, zero hunger, quality education as well as no discrimination among people. Taking any one of them away makes human capital development imperfect.
Saudi Arabia, for instance, due to its huge reserve of petroleum is richer than many countries. As per International Monetary Fund figures, in terms of per capita GDP adjusted for purchasing power parity (PPP), Saudi Arabia with rank 14 is above Germany (Rank 17) and France( Rank 25). But the level of education and freedom to women and homosexuals are discouraging. Such lopsided economic growth makes human capital development amputated.
There have been many realisations that have strengthened our belief that investing in human capital is the need of the hour. For it is the human capital of a country that puts to use the natural resources of the country and derive benefits from it. Human capital can ensure the economic growth of the country and generate sufficient wealth to further invest in the development of human capital.
India at the time of independence, in 1947, had a literacy rate of 12% and an average life expectancy of 32 years. Due to the dearth of skilled workers economic activity was also subdued, which can be seen in the budget outlay. The annual budget outlay for 1947 was 1.97 billion Rupees. Whereas now, as per census 2011, the literacy rate is 74% and life expectancy is nearing 70 years. And budget for 2020-21 is 3 trillion Rupees. Even after adjusting it for inflation, it is a huge jump. How did this happen? It happened due to systematic investment in human resource development, which cyclically generated more revenue and enabled greater investment.
Another important aspect of human development is that it empowers people and improves their way of life, which in itself is a goal to strive for. Suppose, in a hypothetical scenario, investment in human capital does not result in economic gains for the country but improves the literacy of people enabling them to read a medical prescription, or improves their health and frees them from ailments. Should not these goals in themselves be worth pursuing? As Immanuel Kant, the German thinker, said "Humans are to be treated as an end in themselves and not as a mere means to achieve another end."
Also when economic development is accompanied by human development, it brings peace and stability in society. Most of the roots of conflict in society emerge from limited economic opportunity when people start feeling hopeless or because of ignorance and lack of education. At the same time, such a conflict-prone scenario offers a breeding ground for extremism and foreign influence in the form of neo-colonialism. Hence, focussing on human resource development becomes important for the country's sovereignty and integrity.
African decolonisation started in the 1960s resulting in many countries becoming independent. But, they lacked the skill to govern themselves. For example, the Democratic Republic Of Congo, erstwhile Belgian Congo, had only 16 people who had some form of a university degree at the time of independence in 1960. Such conditions led to the start of neo-colonialism, where stronger countries in the name of economic development and technology transfer started asserting control over resources through their Multi-National Companies.
Investing in human resources is of paramount urgency to India. Human development indicators for India are not very encouraging. National Family Health Survey(NFHS) 2015-16 states that 39% of under-5 children are stunted (less height for age), and 21% of them are wasted (less weight for height) reflecting chronic and severe malnutrition respectively. Around 50% of the women, that is 1 out of every 2, are anaemic. Add to this, there is a regional divide, where states like Bihar and Jharkhand perform even poorly. COVID19 pandemic also exposed the inadequacy of India's health infrastructure. All of these findings put out an SOS signal to our health system.
Similarly, educational gains are also not encouraging. Annual Status of Education Report (ASER) 2018, by NGO Pratham, says about 50% of class 5 students are unable to read textbooks meant for students of class 2. And foundational literacy and numeracy skills are hugely missing. Even as the employability of pass-outs from higher education is dismal. As per India Skills Report 2019, 43% of engineers remained unemployed.
This need for urgency is felt even more if the above indicators are juxtaposed with recent demographic trends. According to a report by the reputed medical journal The Lancet, India's population will peak at 1.6 billion in 2048, and thereafter it will decline. What this means is that we will start having an ageing population. Currently, India is among the world's youngest countries with a median age of 29 years which offers us the potential of demographic dividend in the form of an increased workforce. And the window to reap this demographic dividend is now less than three decades.
Recent steps by the government in the form of National Nutrition Mission, National Health Policy aiming at universal health coverage, and recently presented National Education Policy do offer hope. If India can utilise this opportunity by investing in human capital, it certainly can make the 21st century the Indian century.
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