Viksit Bharat 2047: Empowering Human Capital for India's Inclusive Growth

The article authored by Sherwin Fernandes originally appeared in ET Education

The Vision and the Engine of Growth

As India sets its sights on becoming a "Viksit Bharat" (Developed India) by 2047, the nation is crafting an economic narrative that's as ambitious as it is inspiring. This journey, blending impressive growth with the pursuit of inclusive development, offers a glimpse into a country transforming itself with remarkable vigor. The Ministry of Finance's projection of 6.5-7% GDP growth for FY25 isn't just a statistic – it is a statement of intent. As the world's 5th largest economy and its fastest-growing major one, India is flexing its muscles on the global stage. The digital revolution, spearheaded by initiatives like Aadhaar, UPI, and ONDC, has set new benchmarks for inclusive digitalization, reshaping financial inclusion and efficiency across sectors.

A Tale of Two Markets and the Human Capital Imperative

This growth story is nuanced by intriguing market trends. Goldman Sachs researcher Arnab Mitra highlights a fascinating dichotomy: luxury brands in automobiles, watches, and spirits are outpacing mass-market companies. This surge in luxury consumption reflects the evolving aspirations of a segment of India's population, while also underscoring the opportunities for broad-based economic development. In the realm of education and employment, India faces both challenges and opportunities. World Bank data reveals that 12.14% (2022) of Indians aged 25 and older hold a bachelor's degree, while 55.95% (2023) of the labor force has basic education. Less than two-thirds (2022) of the population aged 25+ have completed at least primary education.

Investing in the Future: Education and Employment

Recognizing the importance of human capital development, the government has responded proactively with a comprehensive package in the 2024 Union Budget, allocating a substantial Rs 1.48 lakh crore for education, employment, and skill development. This ambitious initiative includes financial support for higher education loans, a new skilling scheme targeting 20 lakh youth, and the upgradation of 1,000 ITIs. An innovative internship program for 1 crore youth, funded through corporate CSR, aims to bridge the gap between education and employment. Efforts like these are already bearing fruit, with graduate employability improving from 34% to 51.25% over the past decade.

The employment landscape presents a complex picture. While official unemployment figures stand at around 3.2% (2022-23), independent estimates from the Centre for Monitoring Indian Economy (CMIE) put it at 9.2% as of June 2024. These figures highlight the ongoing need for job creation and skill development, areas where the government's focused initiatives are aiming to make a significant impact.

Triumphs and Challenges: Poverty Alleviation and Equitable Growth

India's success in poverty alleviation stands out as a remarkable achievement. The upliftment of around 415 million people from poverty between 2005 and 2021, as recognized by the Global Multidimensional Poverty Index, showcases the country's commitment to inclusive growth and its ability to drive large-scale socio-economic change. As the nation progresses, it's navigating the complexities of balancing rapid growth with equitable distribution. The rise of Indian billionaires reflects the country's economic dynamism and entrepreneurial spirit. However, a recent study by the World Inequality Lab, including insights from prominent economists like Thomas Piketty, suggests that this rapid wealth creation has been accompanied by increasing income inequality causing it to surpass the U.S., Brazil and South Africa in this regard.

Manufacturing and Strategies for Sustainable Growth

The manufacturing sector, contributing 12.84% to GDP in 2023 as per World Bank data, offers significant potential for growth. While net FDI inflows have seen a decrease from $42 billion in FY23 to $26.5 billion in FY24, this challenge also presents an opportunity for policy innovation to attract investment and boost manufacturing. As global supply chains diversify away from China towards Vietnam and Mexico, India too could capitalize on this shift.

As India walks this economic tightrope, several key strategies emerge. Govindasamy Viswanathan, Chancellor of the Vellore Institute of Technology, has long advocated for an increase in education expenditure to 6% of GDP. India can leverage its strengths in the digital space by utilizing technology and AI for inclusive education and skill development. Additionally, fostering stronger industry-academia collaborations will ensure graduates possess the skills employers demand. Implementing targeted policies to stimulate labor-intensive sectors will create much-needed jobs. Sustained increases in budgetary allocations to schemes like the Anganwadi Services, POSHAN Abhiyan, Scheme for Adolescent Girls, and National Creche Scheme, along with integrated Child Development Services and child nutrition provisions, can tackle malnutrition and stunted growth.

Nurturing the Future and the Road to Viksit Bharat

As India traverses this path to Viksit Bharat, it's undertaking a balancing act of epic proportions – harmonizing the growth of luxury markets with broad-based development, addressing the needs of both urban and rural populations, and fostering innovation while preserving tradition. The road ahead is filled with both challenges and opportunities. As we look towards 2047, India's economic renaissance is more than just a national aspiration – it's a story of global significance. The world watches with anticipation as this country brimming with potential navigates its path, balancing growth with equity, and tradition with innovation. India's journey offers a unique model of development that could redefine the parameters of economic success in the 21st century. ?By continuing to significantly ramp up investment in its most valuable asset – its vibrant, diverse, and democratically empowered 1.4 billion people – and by unleashing the full potential of a nation destined for greatness, India is poised to claim its rightful place among the developed nations. The most exciting chapters of this story are yet to be written, and they promise to be nothing short of extraordinary.