Rethinking India’s Human Capital Strategy

India stands at a decisive moment in its human development journey. Enrolment numbers rise, mortality indicators fall, and digital platforms expand across sectors. The Economic Survey 2025–26 acknowledges these gains but urges a deeper examination of outcomes. In education and health, access no longer forms the central challenge. Retention, quality, relevance, and well-being now define the policy frontier.

With nearly one-fourth of its population in the 3–18 age group, India carries a demographic responsibility that extends well beyond basic provisioning. The choices that the state makes today shape productivity, social mobility, and economic resilience for decades. The Survey therefore frames education and health not as welfare domains but as foundational economic investments.

The Limits of Enrolment-Centric Policy

India achieves near-universal enrolment at early stages of schooling. Foundational and preparatory Gross Enrolment Ratios remain high, supported by sustained expansion of schooling infrastructure. Yet Expected Years of Schooling stagnates at 13 years, well below the National Education Policy target of 15.

This gap reflects a structural weakness in student retention. A large share of schools offer education only up to the preparatory stage, while access to secondary schooling remains uneven, especially in rural areas. Urban students benefit from proximity and continuity. Rural students encounter distance, higher costs, and transition barriers that increase dropout risk after Grade VIII.

Infrastructure improvements in sanitation, electricity, and digital connectivity address necessary conditions, but they do not resolve spatial inequality. Policy needs to prioritise consolidation of school networks, transport support, and expansion of composite schools that allow uninterrupted progression.

Equity Requires Systemic Integration

The Survey outlines several equity-focused interventions. PM-SHRI Schools aim to demonstrate NEP-aligned learning environments. Kasturba Gandhi Balika Vidyalayas extend educational access for girls into secondary levels. Tribal initiatives such as PM-JANMAN and Dharti Aaba Abhiyan target regional and social disadvantage. Adult education under the ULLAS programme advances literacy goals across states.

These efforts matter, but the Survey also reveals their limits. Only a minority of schools accommodate children with special needs, and trained support staff remain scarce. Emotional safety and student motivation register at modest levels across the system. These indicators point to a deeper issue: equity often functions as a parallel intervention rather than a core design principle.

Inclusion cannot rely solely on targeted schemes. Teacher preparation, psychosocial support, and child protection frameworks need integration into everyday school functioning. Without this shift, gains in access risk erosion at later stages.

Learning Outcomes and the Question of Well-being

The PARAKH Rashtriya Sarvekshan shows encouraging recovery in foundational learning, with rural students and government schools performing strongly at early grades. These results challenge persistent assumptions about public schooling quality.

However, the Survey resists a narrow interpretation of success. Learning outcomes extend beyond test scores. Motivation, emotional security, and school climate influence attendance, retention, and long-term attainment. When a significant share of students report low motivation or insecurity, policy must respond at the system level.

The proposed shift toward diagnostic and feedback-oriented assessments aligns with this broader understanding. Strengthened Vidya Samiksha Kendras and independent benchmarking can support timely intervention rather than post-facto evaluation.

Adolescents at the Margins

The most pressing concern relates to adolescents. Nearly two crore individuals between 14 and 18 years remain outside the school system. Economic necessity drives many of these exits, as young people supplement household income or perform domestic work.

Formal skilling reaches only a negligible share of this group, and training opportunities cluster heavily in IT and IT-enabled services. This mismatch limits relevance for a diverse economy and weakens labour market outcomes.

The Survey argues for early integration of vocational education, stronger school–industry linkages, and alignment with national skilling priorities. Education systems need to recognise that relevance determines retention, particularly for economically vulnerable households.

Health Gains Amid New Transitions

India records sustained improvement in maternal, infant, and child mortality indicators. Public health infrastructure, targeted programmes, and digital health platforms contribute to these outcomes. Initiatives under Ayushman Bharat and the Ayushman Bharat Digital Mission expand access and transparency, while telemedicine reduces geographic barriers.

Yet success introduces new challenges. Non-communicable diseases dominate the disease burden, obesity affects a growing share of adults, and ultra-processed food consumption rises sharply. Improvements in calorie intake coexist with persistent micronutrient deficiencies.

These trends demand a stronger preventive orientation. Regulation, behavioural change communication, and school-based nutrition interventions require greater emphasis alongside curative care.

Digital Expansion and Youth Well-being

Rapid digitalisation reshapes both education and health delivery. Internet access reaches most households, and the digital economy forms a growing share of national output. At the same time, excessive screen exposure poses risks to attention, cognition, and mental well-being, particularly among children and adolescents.

The Survey’s call for digital hygiene and inclusion of well-being indicators in school evaluation frameworks deserves careful consideration. Technology policy cannot remain detached from its social consequences.

From Reach to Depth

The Economic Survey 2025–26 sends a clear signal. India succeeds in expanding reach. The next phase demands depth. Education policy must retain students, nurture well-being, and build employable skills. Health policy must prevent illness as actively as it treats disease. Equity must move from targeted correction to universal design.

Only such a shift can convert demographic potential into durable human capital and sustain India’s long-term development trajectory.