Union Budget 2024: Govt has to recognize India is racing against time to improve economic growth

The last few years there has been significantly greater realization across the country – with policy makers, industry and broader society – that India has a very short window left for reaping its demographic dividend. And in the absence of good quality jobs backed by skilled manpower, we will be frittering away that opportunity very easily.

To put in perspective the median age in our country is about 28 years and 68% of our population is in the working age group of 15 – 64 years. This is an unmatched opportunity to drive growth compared to most other nations in the world, and certainly an opportunity that no developed country can match. However, this story is changing with India’s overall fertility rate (number of children born to a woman) coming down - over a period of time this will reduce the number of individuals coming into the working age population. The other reality is that states and regions with higher fertility are also characterized by lower scores on social or economic development indices, and as a consequence perhaps, very often have relatively poorer education infrastructure. Potentially we are staring at a situation where the next wave of individuals who can contribute to the economy will come from places with poorer quality of education – all the way from primary to tertiary. 

Quality of education has time and again been identified as a strong indicator of future prosperity. Multiple academic and developmental institutions have highlighted the impact education has not only on economic development but also in its ability to withstand shocks and changes to labor market demands. In India we have seen gradual improvement in our access to education with Gross Enrolment Ratios going up every year over the last decade. But in spite of higher enrolment ratios, the median years spent in schools has remained quite low – approximately 7.5 years in urban India and less than 5 in rural India. Underlying all of these are two core distinct and connected challenges - the quality of education as it stands and the investments in improving the quality of education.

Quality of education is prone to interpretation and judgement. There are some globally accepted ranking such as PISA (Program for International Student Assessments run by OECD), however India has not participated in this program since 2009 – this was the year when we ranked 72nd across 73 participating countries. There are other assessments such as UNESCO studies which found that only 12% of Indian students in the age group of 10 – 16 were proficient in basic mathematics or the World Economic Forum report from 2021 that ranked the quality of education in the country at 90th in the world. While the data and these studies presents an acutely damning picture, the underlying reality is probability not lost on most of us. 

Linked to this is the fact that the investment in education – through school infrastructure, accessibility, teacher quality etc. has been poor. According to the Ministry of Education, only 4.8 per cent of all government schools in India have adequate infrastructure, including classrooms, libraries, and computer labs. The OECD average of teacher to student ratio in public schools is 21 whereas in India it stands at 42. Even NCERT has acknowledged in a 2021 report that approximately 40% teachers recruited by government schools don’t have the requisite qualifications. All of this stems from the fact that spending on education in India as a percentage of GDP still lags most BRICS countries – and by extension countries that are on the road to becoming developed economies. 

The key to building a stronger economy for us will lie in enhancing government spending on education and bringing in more structured public private partnerships in primary and secondary education. This will not solve today’s problems, but make us stronger as a nation over the next two decades and achieve the 2047 vision that has been outlined. 
Indian Finance Ministers have often used to quotes in their budget speeches, here is a suggestion from Benjamin Franklin, for this years speech “By failing to prepare you are preparing to fail.”

Views are personal. The author is partner with Deloitte in Human Capital Consulting