– By Dr Rumki Majumdar and Debdatta Ghatak
As India strives toward its vision of becoming a “Viksit Bharat” by 2047, the centenary of its independence, the upcoming Union Budget plays a crucial role in charting the nation’s course toward sustainable and inclusive growth. Central to this vision is the country’s demographic dividend—a youthful population that holds immense potential to drive economic growth. This advantage, however, comes with the responsibility of ensuring that adequate investments are made in key sectors such as education, health, and infrastructure, to lay a robust and resilient foundation for the future.
Education lays the foundation for shaping the next generation of skilled labour and talent, which serves as India’s core competitive advantage in the global arena. India will have to intensify its efforts to create an empowered and future-ready workforce. The government must leverage the Union Budget to initiate comprehensive efforts aimed at enhancing the entire human capital development value chain—spanning primary and secondary education, vocational training, higher education, and upskilling and reskilling.
The upcoming budget should focus on addressing the pressing need for foundational literacy and numeracy (FLN). Research indicates that 45.3% of children in India are not proficient in reading, writing, and arithmetic at the end of primary school. This alarming statistic underscores the need to prioritise initiatives like NIPUN (National Initiative for Proficiency in Reading with Understanding and Numeracy), which aim to improve learning outcomes at the foundational level. In addition, there’s a need for enhancement of primary and secondary education in rural and sub-urban areas to bridge the urban-rural divide. We expect the government to prioritize digital education and the expansion of e-learning platforms in the coming budget that would enable equal access to quality education for all, regardless of geographical location.
Equally critical is the need to scale up skill development programs at every stage of a profession (and for all profession) that address both current and future industry demands. The government must invest in vocational training and emerging fields like artificial intelligence, coding, and renewable energy and incentivise the private sector to create industry-relevant training programs, provide apprenticeships, and collaborate on cutting-edge research and development initiatives.
The second focus of the government should be to improve the healthcare sector to match the standards of nations with comparable per capita GDP. Improved health infrastructure directly correlates with better life expectancy, which in turn fuels economic growth. Studies reveal that a 1% increase in life expectancy can lead to a 2.55% rise in productivity—an essential driver of economic expansion. We expect higher spending allocation towards health infrastructure, improved doctor and bed-to-patient ratios, and preventive care and mental health, in collaboration with private institutions to expand capacity and reach. Preventive healthcare is a critical area that demands greater attention. Currently, only 14% of government healthcare funds are allocated to preventive measures. Given the rising burden of non-communicable diseases in the country, this allocation must be increased. Investments in public health campaigns, vaccination programs, and early diagnosis initiatives can significantly reduce healthcare costs while improving overall productivity.
In addition to direct budget outlay towards education and health, we expect continued spending on physical and digital infrastructure that will align with the goals of improving education and healthcare. Digital infrastructure, in particular, has the potential to revolutionize both education and healthcare. For instance, allocation towards modern facilities including smart classrooms, well-equipped laboratories, and digital libraries in schools and colleges will increase quality and access to effective learning. Similarly, digital healthcare infrastructure can improve diagnostics and outcomes, both in primary health centers in rural areas and in specialized tertiary hospitals in urban hubs.
Specific asks from the union budget this year
For one, we would expect the government to expand broadband connectivity to remote and underserved regions to bridge the digital divide, enabling access to online learning platforms and telemedicine services. This connectivity is crucial for ensuring that quality education and healthcare are not limited to urban centers but are available to every citizen.
The second ask would be to prioritise the access to clean water and building of sanitation facilities in schools and hospitals, as these are essential for maintaining health and hygiene.
Thirdly, the government should be integrating education and healthcare needs into its broader infrastructure agenda. For instance, allocation towards upgrading roads and transport can improve access to schools, hospitals, and emergency services. Mid-day meal schemes in schools could be combined with health and nutrition awareness initiatives and free medical checkups. Improved educational outcomes and skill development programs that will not only enhance current productivity but also prepare the workforce of tomorrow. We believe addressing both the immediate and long-term workforce challenges will hinge on the strategic policy priorities set in this year’s and the upcoming Union Budgets.
(Dr Rumki Majumdar is Economist at Deloitte India; and Debdatta Ghatak is Manager at Deloitte India.)
(Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.)