India 2025- The Human Resource Capital of The World


This article is about a vision- India 2025. India has emerged as one of the fastest growing economies with GDP growth targeted at 9 percent. Several reports have predicted India to be the third largest economy by 2025 and the second by 2050. One of the main reasons behind this positive speculation is its demographic profile. By the year 2026, 64.8 percent of the Indian population is expected to be in the working age bracket. This time-bound demographic advantage presents new opportunities as well as concerns. This paper deals with these challenges and addressing them. The economy could further be boosted by bridging the gender gap at work. The paper concludes with the example of South Korea, which is widely recognized as a model of economic success through competitiveness of its human resources. Certainly India shines in today’s fragile world economy with the potential of being a superpower, but only the time will prove whether we succeed in becoming the human resource capital of the world!

Present Scenario


Moody’s reports project India to grow with 7.5% in 2016 & 2017

As per the reports by World Bank, India is one of the few countries in the world where the working age population will be far in excess of those dependent on them and this will continue for at least three decades till 2040. A decade-long study by Harvard University’s Centre for International Development, published recently, has concluded that India will be the world’s fastest-growing economy over the next ten years. If the Harvard study is right, India’s GDP (PPP) in 2025 at $15 trillion will be the world’s third largest after China and the United States. The latest report released by NASSCOM, Perspective 2025: Shaping the Digital Revolution, outlines that the Indian technology and services industry is on track to reach its goal of $200 billion to $225 billion in revenues by 2020 and furthermore, to reach revenues of $350 billion by 2025. All the reports point India as the brightest star in coming decades. Today India sits at the forefront of the new economic paradigm. It is one of the fastest growing economies with GDP growth targeted at 7.5 percent in 2016 & 2017 as per Moody’s.  Most analysts expect the Indian economy to grow at sustained high rates during the coming decades and emerge as one of the largest economies in the world. According to Goldman Sachs, India is projected to become the second largest economy in the world by the year 2050.

Understanding The Scenario

India today, is its own initiative- An initiative to rebuilt, reinvent and re-energize! The focus towards both job generation and skill development, will lead the nation to greener “Demographic Dividend” pastures. The vision India 2025 is taking shape. With a population of 1.3 billion, of which about 0.8 billion in the working age, youthful India is surely going to paint the world red!

  1. Job Creation

We have about 12 million graduates joining workforce every year. In order to provide job opportunities to all of them, it is important to have an engine for generating new jobs. Startup India will help in achieving this. Launching of Startup India and Mudra Fund has given a much needed impetus to young entrepreneurs. NASSCOM Report 2014- 15 states that Software Startups are going to create 80000 jobs by next year. India is The Fastest Growing and 3rd Largest Start-Up Ecosystem Globally (Source: NASSCOM) and the Startups if nurtured are going to change the Indian business and jobs landscape.

2. Skill Development

Skilling India aims to provide skill training to about 120 lakh youth in the country and within a small span of time. The vision is to undertake skill development at an enhanced scale with a view to make India ‘Human Resource Capital’ of the world. The National Policy on Skill Development and Entrepreneurship, 2015 will help in meeting the challenge of skilling at scale with speed and standard (quality).

The Challenges Ahead

  1. Bypassing Manufacturing Sector

In case of the Indian economy it has not passed through the steady stages linearly instead Indian economy bypassed manufacturing stage and jumped to service stage directly. As a result, the primary sector although constitutes 50 % of working population, but its contribution to GDP is mere 17%. Similarly manufacturing share in GDP is 24 % while it constitutes 23 % of population. While service sector although constitute much. smaller working population but its contribution to GDP is more than 50%.

Economists regard this neglect to manufacturing and agriculture as the main cause of mass poverty and unemployment present in India.

2. Demographic Dividend

Currently it is estimated that only 2.3% of the workforce in India has undergone formal skill training as compared to 68% in the UK, 75% in Germany, 52% in USA, 80% in Japan and 96% in South Korea.India has the advantage of the “demographic dividend” (younger population compared to the ageing population of developed countries), which can be cultivated to build a skilled workforce in the near future. “The country’s population pyramid is expected to bulge across the 15–59 age groups over the next decade. This demographic advantage is predicted to last only until 2040. India therefore has a very narrow time frame to harness its demographic dividend and to overcome its skill shortages,” The mission is clear- To take advantage of the demographic dividend, which is both — the biggest opportunity and the biggest concern — for the country & to change the public perception about Skilling.

Addressing The Challenges

Three important aspects will help to a great extent in addressing the above mentioned challenges:

  1. Job-Skill Matching

In 2012, U.S. economists Alvin Roth and Lloyd Shapley won the Nobel Prize In 2012 for their match-making theories relating to supply-demand issues prevalent in the market. Their work underpins the economics discipline by providing insights into how scarce resources can be allocated. And it is time to implement these principles to the most critical resource of today – Talent.

2. Smart technology

Skilling needs to go as virtual as possible, job interviews for frontline jobs might need to be replaced with online assessments, Video interviewing, In fact mobile compatible video interviewing will pick up pace, applicant tracking focuses on candidate experience keeping them informed of various process stages. Moreover online courses in the form of MOOCs and online assessment should be encouraged.

3. Formal Training

The last aspect is creating a formal training/apprenticeship framework – especially for the fresh workforce. Reports suggest that Countries with well-defined training/apprenticeship programs across domain areas often rank better on employment numbers. A formal internship program can work wonders in reducing gap between the expectations of talent supply and demand sides and increase employability.

Boosting Further

India can increase its 2025 gross domestic product (GDP), estimated at $4.83 trillion, by between 16% and 60% simply by enabling women to participate in the economy on par with men, according to a new study by the McKinsey Global Institute (MGI). The upper end of that range—if everything works out the way it should, or a so called full-potential scenario—could add $2.9 trillion to India’s 2025 GDP. The lower end—the so-called best-in-region scenario in which all countries only match the rate of improvement of the best country in the region—could add $700 billion.

This can be done by equating the working hours, shifting in high values sectors,  discouraging unpaid works & Increased access to internet, mobile and financial services.


With about 10 million capable and flexible human capital joining the workforce every year, the country begs to wonder, what got us here – will it take us further towards our vison of India 2025? About 93% of the labour force in India – which works in the unorganised sector – is largely untouched by any kind of formal training.

Perhaps, we can learn a lesson from South Korea, which is widely recognized  as a model of economic success through competitiveness of its human resource capital. Since the 1960s, Korea has been linking education to macro-economic development plans, so as to provide trained workforce that supports industrial policy.


  1. Linking skills to jobs– Perspectives on skill development, Confederation of Indian Industries
  2. India Skills Report– 2016, Confederation of Indian Industries
  3. The Power of Parity: How equality for women could drive $12 trillion in global growth, McKinsey Global Institute
  4. India’s economic geography in 2025: states, clusters & cities, McKinsey & Company
  5. NASSCOM Perspective 2025: Shaping the digital revolution

Published in Feb 2016

More about the author- Pankaj Kumar