English rendering of PM’s address in the 136th Episode of Mann Ki Baat on 26.07.2026
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2289560&RegID=3&LID=1
English rendering of PM’s address in the 136th Episode of Mann Ki Baat on 26.07.2026
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2289560&RegID=3&LID=1
4 comments:
https://www.youtube.com/watch?v=tt_3bUYpD5Y iksit Bharat Dream Vs Human Capital Deficit #moneylife #debashisbasu
India's highways, airports and digital infrastructure showcase rapid progress. But is physical infrastructure alone enough to achieve the dream of Viksit Bharat? [music]
0:10
Hello and welcome to money news. So I am
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Dashishbas.
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It's widely assumed that India will
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sustain 7 to 8% annual growth rate in
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gross domestic product for the next
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several decades and soon we'll reach
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upper middle class upper middle income
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category according to World Bank. And
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there are hopes that by 2047 we'll even
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reach the higher income category. That's
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the among the rich nations.
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On surface the momentum looks
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impressive. Sleek new highways sliced
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through the countryside. Gleaming new
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airports open in tier 2 cities and on a
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worldclass digital public infrastructure
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handles billions of real time realtime
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transactions. Yet beneath this facade
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lies a different reality. The current
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structural quality of India's growth is
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heavily on physical, capital and elite
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services but dangerously light on the
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capabilities of its broader population.
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At its present trajectory, this lopsided
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model will move the needle towards
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developed country status far more slowly
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than policy makers care to admit or even
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understand. India risks hitting a glass
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ceiling long before it crosses the
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threshold into an upper middle upper
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middle income category. The reason is
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very simple. It is stark and
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consistently underaddressed issue, a
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profound and systemic failure to develop
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something that is being recognized as
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the most important factor everywhere in
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the world behind a country's prosperity
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and that is human capital.
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Traditionally, classical economists
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viewed economic growth as a mechanical
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function of adding more workers, more
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land, more machines, and more capital.
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But when applied to the modern economy,
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this breaks down. Physical capital such
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as factory or a highway is subject to
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unforgiving law of diminishing returns.
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A country can double its stock of
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tractors or computers, but it also needs
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to double its role of literate, educated
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and qualified workers to operate them.
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Otherwise, they will just sit around
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rusting
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and eventually the initial surge in
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growth due to such investment
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will flatten. In 1992, economist George
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Pank, David Romer, and David Wheel
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mathematically rewrote this orthodoxy.
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They isolated human capital, the
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collective blend of education, health
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and specialized skills as its own
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independent standalone factor behind
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growth. Now, human capital, not
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geography, not culture, not natural
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resources, now explains why some nations
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become wealthy while others remain
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stagnant. In the old models, a country
In this thought-provoking talk, Debashis Basu argues that India's biggest challenge is not the lack of capital or technology, but a persistent human capital deficit. Drawing on economic research by Gregory Mankiw, David Romer, David Weil, Robert Lucas and Paul Romer, he explains why education, healthcare and skills—not just GDP growth—determine whether a nation becomes truly prosperous.
that invested four times more heavily
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than another in physical machinery only
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ended up twice as rich. But in the new
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model of manu ror and wheel when high
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physical capital investment is
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multiplied by high human capital
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investment it creates a compounding
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effect a 16-fold leap in wealth per
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worker.
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Furthermore growth theorists like Robert
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Lucas and Paul Roma demonstrated that
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human capital possesses a unique
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economic superpower. It does not suffer
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from diminishing returns. Unlike a
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physical machine, knowledge is nonrival.
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An engineer who invents a more efficient
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piece of software or better logistics
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algorithm creates an asset that can be
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replicated across the entire economy
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simultaneously. This creates positive
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spillovers, raising the productivity of
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every factory, farm and office worker
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nationwide. In short, physical capital
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builds the floor of an economy, but it's
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the human capital that is the engine
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that pulls it puts the ceiling upwards.
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How do we know this? Because this model
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is not just an academic construct. It is
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the historical ledger of 20th century's
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greatest economic miracles. In 1950s,
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South Korea was a war torn nation with
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an adult literacy rate of just 20%. It
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possessed no oil, no minerals, and
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negligible physical wealth or natural
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resources. Yet the state treated
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education policy as its core industrial
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policy. It systematically eliminated
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illiteracy to feed light manufacturing
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in the 1960s, expanded vocational
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technical schools to supply heavy
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industries in the 1970s, and flooded
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universities with science, technology,
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and engineering resources in the 1980s.
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Today, it stands as a global innovation
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giant.
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Singapore faced an equally grim start
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upon its sudden independence in 1965
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from Malaysia, lacking even domestic
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water supply. Prime Minister Lee Kwanu
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noted that the island's only asset was
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its people. The state ruthlessly aligned
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its schooling system with the exact
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technical requirements of foreign
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multinationals. Later, rather than
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letting skills grow obsolate, it
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pioneered continuous state funded adult
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retraining. China the ultimate
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manufacturing leviers and followed a
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human capital playbook too before Deng
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Xiaoping opened the economy in 1978
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decades of public investment had already
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secured widespread basic literacy and
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rural healthcare when global supply
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chains arrived they did not just find
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cheap labor they found highly
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disciplined literate workforce capable
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of breeding blueprints and executing
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complex assembly when that model ran its
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course Beijing executed the largest
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higher education expansion in human
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industry graduating over 1 cr students
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annually heavily weighted towards
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engineering to lead the world now in
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electric vehicles and green technology
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and many other things India's path has
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been the opposite the country has
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successfully cultivated brilliant
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worldclass elite look at the all the
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IITs that we have and all the people who
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coming out of there the premier
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technical institutes and business school
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supplies the CEOs of Silicon Valley and
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the engineers powering sophisticated
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global capability centers in Bangalore.
This elite creamy layer allowed India to
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skip standard mass employment
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manufacturing and jump straight into the
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high-end digital services. But an
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economy of 140 cr people cannot ride to
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the upper middle upper middle income
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status on the back of a few million tech
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professionals. Below this pinnacle of
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excellence lies a vast starkly neglected
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human capital landscape. While billions
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of dollars have fallen into physical
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infrastructure, basic foundational
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learning and public health languish.
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Data from World Bank's human capital
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index consistently highlights that a
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child born in India today will grow up
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to be only half as productive as they
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could be under conditions of complete
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education and full health. The
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structural bottlenecks are painfully
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clear. Number one, the skilling
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mismatch. While India produces millions
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of college graduates every year,
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industry surveys routinely show that
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nearly half are unemployable straight
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out of school due to lack of practical
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market aligned skills. Number two, the
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vocational deficit. Only about 4% of
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India's total work forces received
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formal vocational training. The nation's
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network of industrial training
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institutes is structurally
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underutilized, burdened by outdated
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curricular and social stigma that prices
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empty degrees over real world technical
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skills. And finally, the health track.
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Chronic challenges like childhood
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stunting and malnutrition permanently
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impaired cognitive development, placing
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an invisible structural break on the
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future of the labor force.
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If India is to transform its much wanted
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demographic dividend from a ticking time
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bomb into an economic engine, it must
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dramatically pivot its national
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strategy. Constructing physical
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infrastructure is necessary, but
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highways are only as useful as the value
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of goods and ideas that moving across
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them. What should we do? First, the
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implementation of national education
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policy must be accelerated with a
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hyperfocus on breaking the academic
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vocational divide. Vocational training
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must be destigmatized and integrated
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directly into the schooling cycle,
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shifting the educational metric from
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wrote memorization to verifiable
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employability. Second, the state must
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forge deep institutional partnerships
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between industry training centers
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meriting the Singaporean model.
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Curricular ITI and polytechnics should
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be dynamically updated by companies that
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hire them, making apprenticeship
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promotions the norm rather than the
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exception. Finally, public funding must
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aggressively target foundational
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childhood health and early years
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education, ensuring that raw biological
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capacity for the next generation is not
compromised before they ever step into
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classroom. These are the bare minimum
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steps and most importantly these ideas
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are all known and have been articulated
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many times by experts. I'm not saying
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anything new. The question is are we as
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a country are our policy makers,
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politicians, the secretaries, the
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bureaucrats, the think tanks are they
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serious enough to implement them with
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targeted results and accountability.
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India can continue down its current
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path. There's no problem. We will have
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celebrating headline grabbing GDP
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figures. It's little down this year.
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It'll probably go up next year driven by
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capital intensive projects and elite
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services sector but it will leave
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hundreds of millions of its citizens
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underskilled and underutilized.
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Or we can recognize that the true wealth
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of a nation does not lie in it in the
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concrete that we are pouring but in the
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trained capabilities of its mind. Until
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New Delhi closes this human capital
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deficit, its lopsided model will not
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move the needle towards the developed
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country status. Indeed, even moving out
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of the low middle income status that
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India currently is will be a struggle.
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