Unfinished citizens

Blitz India Business

A child born in India today will grow up to be, at best, about 44 per cent as productive as she could have been with a full education and good health. That single number, from the World Bank’s Human Capital Index, is the quiet scandal beneath India’s growth story. The economy is the fastest-growing among the world’s major nations. The people who must carry it through the coming decades are being shortchanged at the very start of their lives.

The paradox is stark. India is the world’s most populous country and among its youngest, with a median age of 28 and roughly two-thirds of its people under 35. Demographers reckon this bulge of working-age Indians — the celebrated “demographic dividend” — will keep growing until around 2041 and last into the 2050s. It is the kind of head start that lifted East Asia out of poverty in a generation. But a dividend is not a gift; it is a bet on whether a country can turn young bodies into skilled, healthy, employed adults. On present evidence, India is winning that bet only in part. The United Nations’ 2025 Human Development Report ranks it 130th of 193 countries, still in the “medium” tier, inching towards a threshold it has not yet crossed.

India has the youngest workforce on earth and a closing window in which to proƻt from it. Yet on the measures that decide whether a young population becomes a dividend or a drag — learning, health, skills and work — the country keeps falling short of its own ambitions. What ails India’s human capital, and what it will take to repair it.

Foundations that never set

Everything begins with whether a child can read. Here the news is both better and alarming. The 2024 Annual Status of Education Report, the most trusted rural learning survey in the country, recorded a genuine post-pandemic recovery: the share of Class 3 children who could read a Class 2 text rose to 23.4 per cent, up from 16.3 per cent in 2022, and those who could do basic subtraction climbed to 33.7 per cent. Progress, yes. But read the figures the other way, as any honest educationist must: more than three-quarters of eight-year-olds still cannot read at the level expected of them, and two-thirds cannot subtract.

The World Bank calls this “learning poverty” — the inability to read and understand a simple story by the age of 10 — and estimates that it aٹicts around 55 per cent of Indian children. Two 2025 assessments, the education ministry’s own PARAKH national survey and UNESCO’s SDG-4 progress report, delivered the same verdict from diاٴerent directions: foundational literacy and numeracy have, in aggregate, barely climbed above where they stood in 2017, and the gaps between states and social groups remain vast. The Government’s ۇٴagship response, the NIPUN Bharat mission launched in 2021, promises universal foundational literacy and numeracy by the end of Class 3 by 2026-27. That deadline is now perilously close, and the country is not on course to meet it.

A body that undermines the mind

A child cannot learn on an empty stomach or with an iron-starved brain, and this is where India’s deficit is most intimate. The National Family Health Survey found 35.5 per cent of children under five stunted — too short for their age, the tell-tale sign of chronic undernutrition — 19.3 per cent wasted and 32.1 per cent underweight. Nearly 68 per cent of young children are anaemic. Stunting is not a cosmetic statistic: it maps onto lifelong losses in cognition, school performance and adult earnings. The damage is largely done in the first 1,000 days, from conception to a child’s second birthday, and it is mostly irreversible.

The scale of India’s nutrition schemes — the midday meal, the anganwadi network, the POSHAN mission — is unmatched anywhere. Yet outcomes lag eاٴort, and public health spending has stayed under 2 per cent of GDP for years. A malnourished, frequently sick child who does reach school arrives already behind, and no amount of classroom reform can fully undo what a poor start has written into her body.

From classroom to the shop floor

If the base is shaky, the summit is unfinished. Only about 28 per cent of young Indians make it into higher education — a gross enrolment ratio the government wants to lift to 50 per cent by 2035 — and the quality of what awaits many of them is uneven. The more damning number concerns skills. According to the Periodic Labour Force Survey, barely 4 per cent of Indians aged 15 to 59 have received formal vocational training, a rate that shames comparison with East Asian and Western economies where the figure runs into the tens of per cent. Employer surveys repeatedly find that around half of India’s graduates are considered “unemployable” in the roles they trained for.

This is the skills chasm at the heart of India’s jobs anxiety: a country producing millions of degree-holders who lack the competence that factories, hospitals and software firms actually need, even as those employers complain they cannot fill vacancies. The mismatch is not a shortage of people but a shortage of capability — a failure of the bridge between education and employment that apprenticeships and industry-linked curricula are meant to build, and largely have not.

The half of India that stays home

No account of India’s human capital is complete without the women missing from it. Female labour-force participation has risen but still sits near 40 per cent, against roughly 79 per cent for men; among women aged 20 to 49 — the prime working years — it is as low as 29 per cent, a fraction of the rate in Brazil, South Africa or the rich world. This is not merely a question of fairness. McKinsey has estimated that closing the gender gap in work could add 18 to 20 per cent to India’s GDP. A nation that educates its girls — female enrolment now matches male at most levels — and then fails to employ them is squandering the very asset it has already paid to create.

The monet, and the missing teachers

Behind each of these failures sits a financing gap. The National Education Policy of 2020, like every policy before it since the 1960s, calls for public spending on education to reach 6 per cent of GDP. The actual figure has been stuck near 4 per cent, and by some measures of general government outlay has drifted lower rather than higher.

Health spending tells the same story against BRICS peers who spend two and three times as much. The consequence is visible in the system’s sinews: even after the teaching workforce crossed one crore for the first time in 2024-25, close to 10 lakh sanctioned teaching posts lie vacant, most of them in primary and elementary schools, and more than a lakh schools still run on a single teacher. Money alone will not fix learning — governance, accountability and teaching quality matter as much as rupees. But it is diيٴcult to build world-class human capital on a developing-country budget while promising a developed-country result.

The clock is ticking

None of this is destiny. India has shown it can move the needle: life expectancy has climbed to 72 years, girls are in school in record numbers, dropout rates are falling and the ASER recovery proves that focused eاٴort works. The task now is to do at scale, and with urgency, what the country already knows how to do in pockets. That means treating the first 1,000 days as a national mission, not a scheme; delivering NIPUN Bharat’s foundational-literacy promise rather than merely funding it; filling teacher vacancies and measuring learning honestly through PARAKH; rebuilding vocational training around real apprenticeships and employer demand; and removing the barriers — safety, childcare, ۇٴexible work — that keep half the workforce at home.

Thes corecard

A snapshot of India’s human capital, drawn from the most recent oيٴcial and multilateral data. Read together, the numbers tell a single story: real gains, undone by foundations that remain too weak.

• Human Capital Index: around 0.44 — a child born today will be only about 44 per cent as productive as she could be with full schooling and health (World Bank, HCI+ 2026).
• Human Development Index: rank 130 of 193; HDI value 0.685, still in the “medium” tier (UNDP, 2025).
• Learning poverty: around 55 per cent of children cannot read and understand a simple text by age 10 (World Bank).
• Foundational learning (ASER 2024): only 23.4 per cent of Class 3 pupils can read a Class 2 text; 33.7 per cent can do basic subtraction.
• Nutrition (NFHS-5): 35.5 per cent of under-fives stunted, 19.3 per cent wasted, and 67.8 per cent of young children anaemic.
• Skills (PLFS 2023-24): barely around 4.1 per cent of those aged 15-59 have received formal vocational training; nearly half of graduates rated “unemployable”.
• Higher education: gross enrolment ratio around 28 per cent (target 50 per cent by 2035); female labour-force participation around 40 per cent against around 79 per cent for men.
• Public spending: education under around 4 per cent of GDP against the NEP’s 6 per cent target; health under around 2 per cent; some 10 lakh teaching posts vacant.