Health and education reforms: A blueprint for India's manufacturing dream

India's ambition to lead global manufacturing depends on tackling malnutrition and improving education. The Union Budget 2025 offers a chance to invest in these sectors, leading to sustainable growth

India’s ambition to emerge as a global manufacturing powerhouse mirrors the success of nations like China. With a young, dynamic population and a burgeoning domestic market, the country is poised for transformation. However, achieving this vision depends heavily on two foundational elements: healthcare and education. Current data reveals significant gaps in these areas, which, if left unaddressed, could impede India’s path to becoming a leading manufacturing nation.

 

The malnutrition challenge

 

India faces a pressing issue with malnutrition. Ranking 105th out of 127 nations on the Global Hunger Index, the country scores a worrying 27.3, signifying a ‘serious’ concern in the country. Findings show that 13.7 per cent of the Indian population is undernourished. India has the highest child wasting rate (low weight for their height for children of 5 years or below age) at 18.7 per cent and the 14th-highest child stunting rate (low height for age) at 35.5 per cent, reflecting chronic undernutrition. 

 

That said, in the past couple of decades, schemes like the National Food Security Act, Poshan Abhiyan (National Nutrition Mission), and PM Garib Kalyan Yojna have helped India improve on all nutrition-related parameters, but a lot still needs to be done.

 

In contrast, China, through sustained investments in healthcare, has achieved a ‘very low’ level of undernourishment, child wasting, and child stunting. This has translated into a healthier, more robust workforce — a key driver of its manufacturing success. India, however, continues to grapple with challenges in healthcare infrastructure, accessibility, and funding. If malnutrition persists, it risks not only the health of its citizens but also its economic ambitions.

 

Linking education to economic growth

 

While, India boasts the world’s second-largest education system, it remains insufficient for the demands of an ambitious nation. This is evident from the fact that in 2024, over 1.33 million Indian students pursued education abroad in search of better opportunities. Moreover, the Gross Enrolment Ratio (GER) in higher education in India for the 18-23 age group stands at 28.4 per cent, highlighting inadequacy for the education system to meet the needs. In comparison, China’s GER stands at 60 per cent.

 

A thriving manufacturing sector also demands a skilled, educated workforce. To support this, investments in education — particularly in higher education — must priotitise both expansion and quality improvement. Key measures include increasing accessibility, modernising infrastructure, and aligning curricula with industry demands. Education leads to the adaptability to skill set change whenever needed and hence becomes the focal point for all growth aspirations.

 

Budgetary expectations

 

Between 2012-13 to 2022-23, expenditure towards the Department of Health and Family Welfare constituted less than 2.5 per cent of the overall spending of the union government. Currently, it is less than 2 per cent. Similarly, for education, the spending is less than 3 per cent of the total budgeted expenditure.

 

Expenditure for health and education has grown at an average annual rate of 11 per cent and 4 per cent, respectively. We need to increase the share of health and education in the budget to have a meaningful improvement in their state in India.

 

The Indian government has an opportunity in the upcoming Union Budget 2025 to address critical gaps in health and education that have remained underfunded in the past. A boost in healthcare funding is imperative to combat issues like malnutrition and enhance public health infrastructure, paving the way for a healthier and more resilient population.

 

Similarly, the government should prioritise significant investments in education to enhance quality, accessibility, and infrastructure. By doing so, it can elevate the domestic education system and reduce the dependency on foreign institutions for higher studies. A forward-looking approach in these sectors could yield transformative benefits for the country.

 

The way forward

 

India’s aspiration to become a global manufacturing leader rests on the health and education of its citizens. Strategic, sustained investments in these sectors will lay the groundwork for a healthier, more educated and skilled workforce, capable of driving innovation and productivity.

 

As we approach the centenary of India’s independence, prioritising healthcare and education is not just a moral imperative — it is an economic necessity. These investments will define India’s trajectory, transforming it into a developed nation and a true manufacturing powerhouse.

 

Swarup Anand Mohanty is Vice-Chairman and CEO, Mirae Asset Investment Managers (India)

Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper