There must be a new focus on education | Photo credit: KUMAR SS
What threatens India most is a continued misalignment of priorities. Large amounts of money continue to flow into programs with significant time and financial overruns. The CAG’s review of the Bharatmala Pariyojana Phase I makes this clear. The project, approved at a cost of ₹ 5.35 lakh crore for 34,800 km of highways, had grown to ₹ 8.47 lakh crore by 2023, with only three-quarters of the roads even awarded.
The Dwarka Expressway alone costs ₹250 crore per km – more than 10 times the benchmark for national corridors. This pattern is repeated across sectors – from Sagarmala to the Smart Cities Mission – revealing an obsession with the monumental at the expense of the meaningful. Even as India’s demographic advantage fades, a large number of its population remains undereducated and underskilled.
The numbers tell the story. Public spending on education remains below 5 percent of GDP and on health at just under 2 percent. China spends about 4 percent on health and 6 percent on education, while India spends almost 6 percent combined.
India vs China
In absolute terms the difference is even greater. With a GDP of about $18 trillion, China’s 6 percent spending on education alone is over $1 trillion a year, compared to India’s $160 billion. In healthcare, China’s annual spending is over $700 billion, while India’s spending remains below $80 billion. This trillion-dollar gap explains how China has built an educated, skilled and healthy workforce in a generation.
The structural imbalance starts early. In India, over 12 million children are enrolled in primary school classes, but only 6 to 7 million children are enrolled in grades 9 to 12. Gross enrollment rates are falling from 93 percent in primary school to 77 percent in secondary school and only 56 percent in higher secondary school. The legacy is now visible in the workforce.
According to the latest periodic labor force survey, only about half of India’s working-age population has a secondary education or higher, and barely 3.8 percent have any formal vocational or technical training. This means that millions today in their 30s, 40s and 50s enter the workforce with limited schooling and almost no formal qualifications, confined to low-productivity and manual jobs.
The health situation is equally worrying. In India, there are only about 17.5 qualified health workers per 10,000 population, which is well below the WHO benchmark of 22.8; in states like Bihar the figure is less than 2 per 10,000. Public spending on healthcare per citizen barely exceeds ₹1,000 per year, resulting in disease and malnutrition continuing to impact productivity. The World Bank’s Human Capital Index estimates that a child born in India today will be only 49 percent as productive as he or she could be with full health and education.
Spend wisely
A realignment of public spending is therefore absolutely necessary. India does not need to spend infinitely more; it must be spent differently. Rationalizing food and fuel subsidies to reach only those in real need could conservatively save about ₹100,000 crore per year. Curbing cost overruns on major infrastructure projects, currently more than £5 million, could result in an additional £1.5 million to £2 million. Taken together, such redistributions could easily double public spending on education and health without increasing the budget deficit.
But incremental changes will not be enough. After two decades of underinvestment, India now needs to spend nearly 10 percent of GDP on education, health care and vocational training if it is to match East Asian standards within a generation. This would still put India at the lower end of what countries like China and South Korea are already spending, but would still represent a significant improvement.
Study after study shows that investments in education, health and skills deliver far higher and more sustainable economic returns than capital-intensive projects. A better-trained teacher or nurse contributes more to long-term productivity than another mile of highway, which would have been just as suitable as a freeway.
Fiscal prudence and human development must go hand in hand. The current growth rate, if properly prioritized, could transform a generation of young Indians into one of the world’s most productive workforces. India must do everything it can to avoid wasting what it has.
If India continues to conflate size with success and spending with value, it will squander its most valuable time-bound asset – its people. Unless this changes, India risks growing older without becoming prosperous. That would be a shame because it is completely avoidable.
The author is a columnist and researches the interfaces between state, society and history. He teaches at IISc-Bengaluru
Published on December 10, 2025