By Santosh Kumar Mohapatra
For decades, the discourse on development has centered on roads, industries, technology, and economic growth. Governments proudly showcase new highways, airports, industrial investments, and rising GDP figures as symbols of national progress.
While these achievements are important, they represent only one dimension of development. The true wealth of a nation lies in the quality of its people. Economists describe this as human capital—the collective health, education, skills, knowledge, creativity, and productive capacity of a country’s population. The latest World Bank report, “Building Human Capital Where It Matters: Homes, Neighborhoods, and Workplaces,” reinforces the same philosophy. It also warns that global progress in building human capital has slowed, and in many countries has even reversed, posing a serious challenge to future economic growth and social well-being.
Learning outcomes have stagnated, nutritional deficiencies continue to affect millions of children, skill gaps are widening, and opportunities for productive employment remain inadequate. These are not merely social concerns; they directly reduce future earnings, weaken economic productivity, and undermine the long-term capacity of nations to sustain growth.
The report challenges the conventional belief that human capital is created only in schools and hospitals. While quality education and healthcare remain indispensable, human development is shaped much more broadly through three interconnected environments—homes, neighborhoods, and workplaces.
Every child’s journey begins at home. Long before entering a classroom, children develop the cognitive, emotional, and social foundations that shape their future learning and well-being. Research cited by the World Bank shows that children whose mothers have higher levels of education generally perform better in language, mathematics, and cognitive development. These early advantages often persist throughout life, influencing educational attainment, employability, and lifetime earnings.
The message is clear: children need far more than food, school fees, and textbooks. Emotional security, parental involvement, intellectual stimulation, and supportive family relationships are equally essential. A society that neglects these foundations risks weakening its future human capital. Consequently, policies that strengthen families—including social protection, income support, early childhood development programmes, parental education, and employment opportunities for caregivers—deserve far greater attention. Evidence consistently shows that investments made during early childhood generate some of the highest social and economic returns available to any government.
The report’s second major insight is that where people live profoundly influences how they live. Access to quality schools, healthcare, transportation, public services, safe streets, clean environments, and employment opportunities varies dramatically across neighborhoods. As a result, two families with similar incomes can experience very different life outcomes simply because they live in different communities.
The report introduces the Human Capital Index Plus (HCI+) report 2026. This expanded metric tracks human capital from birth through age 65, quantifying how gaps in care, environment, and job markets translate into forgone lifetime earnings. The Human Capital Index Plus is based on three fundamental pillars: health, education, and productive employment. It assesses whether people are healthy enough to lead productive lives, whether they receive quality education and acquire useful skills, and whether those skills are effectively utilized through meaningful employment.
The latest Human Capital Index Plus presents a sobering picture for India. Among 162 countries, Japan ranks first, followed by Singapore and the Netherlands, while India stands at 120th. India possesses one of the world’s youngest populations and frequently celebrates its demographic dividend. However, a young population becomes a dividend only when it is healthy, educated, skilled, and productively employed. Otherwise, it risks becoming a demographic burden.
As India aspires to become a developed nation by 2047, investment in human capital must become the country’s foremost priority. India’s 120th rank should therefore serve as a wake-up call. The country’s future will depend less on the size of its economy and more on the quality of its human capital. Nations become truly developed not when they build more infrastructure, but when they build healthier, better educated, more skilled, and more productive citizens.
The writer is an Odisha-based economist & columnist.
