Where Should India Invest More

Where Should India Invest More – Human Capital or Human Development?
1. Introduction
2. Human capital vs human development
3. Why invest in human capital?
4. Human development why?
5. Where should India invest?
6. Conclusion
Every nation thrives not on its resources but on the quality of its people.
It is the ability of the citizens which make a nation prosperous. For
instance, Singapore achieved independence much later than India or
Pakistan, yet it ranks higher in human development index.
Notwithstanding scarcity of resources, it continues to be one of the most
developed nations of Asia. So, what promotes development? Human
capital or human development ? Or, are both necessary for India to
achieve its growth goals?
Human capital refers to the abilities, skill sets and knowledge resource
of the citizens of a country. The more knowledgeable people are, the
more is the economic progress. On the other hand, human development
refers to all around development of the people viz, literacy, health,
social development and equality. Historically, while human capital has
been the tool for civilizations to advance, human development has
helped in effective utilization of the human capital. Be it the Indus valley
civilization, the Egyptian or even the Mesopotamian, the knowledge
level of people, helped them trade, connect and survive. However, it was
only after the period of renaissance and reform, that human
development came to epitomize real development. The ideas of Locke,
Voltaire led to shedding of older beliefs regarding the way of life and
societies and was an inspiration for French and American revolutions
which gave “liberty, equality, Fraternity” and the declaration of “Rights
of Man”. India, too, having spent most of its history entangled in social
traditions and customs of castiesm, gender biasness, realized the value
of human development through the efforts of various reformers like
Raja Ram Mohan Roy, Ishwar Chandra Vidyasagar. Post independence,
both human capital and human development has seen tremendous
growth. However, to reach a level as that of developed countries, should
India focus on human capital or human development?
Human capital is the most important resource for an organization or a

country. The value created by people, through their knowledge, talent,
innovation and even invention, gives an edge to the nation. This value
can even be new mode of production or even improving the efficiency of
a conventional method of production. India ranks 103 on the World
Economic Forum’s Human capital Index rankings. It is lowest in the
BRICS. It is quite clear that India has to invest a lot in developing human
capital to reach the likes of developed nations. A number of factors
hamper human capital development in India which include, low
educational attainment, low deployment of human capital, and a large
population still dependent on agriculture. A part from this, poor
participation of women in labour force causes a lag in economic growth.
According to IMF, India can add upto 27% in its GDP if women labour
force participation is realized fully. The lack of human capital has led to
a dependence of India on various other countries like China, US etc.
Being geopolitically surrounded by two hostile nations, India needs to
maintain better armament and weaponry for deterrence and security.
India is said to be the largest arms importer. A better human capital can
lead to realization of the goal of “Make in India”. India is also short of
qualified healthcare staff and doctors, which distorts the availability and
affordability of quality healthcare to people who are forced to opt of Out
of pocket expenditures for access to costly private sector healthcare.
Human capital investment is also the need of the hour as the large
demographic dividend that India has, can turn out to be a benefit only if
their talent, knowledge and skill are better utilized in an economic way.
Thus India should invest in raising its human capital for economic
growth and raising the standards of its people. However, in a diverse
and large country like India, is human capital sufficient to realize
development?
India has completed more than seven decades post independence.
However, its growth has been a story of both a success and some yet to
be successful. Although, being one of the fastest-growing large
economies, it ranks 131out of 188 countries in UNDP’s HDR report.
There is a lot of disparity in human development across the states. For
instance, institutional deliveries in Puducherry are high at 99.9%, while
in Nagaland, it is only 32%. India still faces many challenges in realizing
human development for its diverse population. While there has been
progress in improvement of maternal mortality ratio (MMR), Infant
Mortality ratio (IMR), many pockets in the country are still devoid of
even primary healthcare which causes asymmetry of availability of
healthcare. Further, in the field of education, ASER reports have
highlighted the need for improving quality of outcomes both at primary
and secondary levels. Also, due to overdependence on agriculture and
dwindling incomes of farmers due to rainfed irrigation and climate
change, a large rural population has lower income than their urban
counterparts. This has led to migration, crowding in cities like Mumbai
and Delhi whose limited resources and services are overburdened.
Apart from this the environmental effects of unplanned and unregulated
development has also affected the quality of the environment that
people live in. Some of the Indian cities continue to be the most polluted
with poor Air quality levels. The growing events of smog, pollution due
to pollutants like PM 2.5, PM 10 and increase of GHGs hampers and
endangers health and state of children and women. It is no wonder that
if India does not invest in improving the health, education and the
quality of the living environment of its people, there will be either
distorted development or an inequitable one. Human capital’s worth
and output can only be realized if there is human development.
However, to realize human development, there has to be deployment of
human capital.
Human development and human capital are dependent on each other.

Like the factors of production in any organization, they are the factors of
growth and development of a country. They cannot be mutually
exclusive and therefore India must invest in both to realize its
Sustainable development goals (SDGs). If India can earn both fame and
foreign exchange by deploying foreign satellites by using human capital,
it can even earn the vision of the preamble of our constitution

Where Should India Invest More

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Where Should India Invest More – Human Capital or Human Development?

Human capital is the most important resource for an organization or a

Human development and human capital are dependent on each other.

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