New Delhi [India], March 28 : India must significantly increase its spending on healthcare and education to achieve the goal of Viksit Bharat and become a developed nation by 2047, according to a report by EY.
The report suggested that the government should raise its expenditure on education to 6.5 per cent of GDP and healthcare to 3.8 per cent of GDP over the next two decades.
It said "Education spending by the government may need to rise to 6.5 per cent of GDP by FY2048 from its current 4.6 per cent"
At present, India's education spending stands at 4.6 per cent of GDP, while healthcare spending is much lower at 1.1 per cent as of 2021.
The report highlighted that to match the standards of high-income countries, India should raise its education spending to at least 4.8 per cent of GDP. Some peer nations, such as South Africa and the Euro area, allocate even higher proportions, ranging from 5.05 per cent to 6.55 per cent of GDP. India needs to raise it per capita expenditure on education seven fold by 2048 for the Viksit Bharat goals.
"We have estimated the required level of per capita expenditure consistent with the per capita GDP of a developed country threshold at close to USD600. This means that going forward, the per capita government expenditure on education may have to be augmented from its present level of USD83.2 to US$600, a more than seven-fold increase. This increase may be required to be brought about during FY26 to FY48." said the report
It added "we require to factor in the share of young population that needs to be educated and trained. For this purpose, we consider the share of population up to the age of 20 years. The higher is the share of this young population, the higher is the requirement of expenditure on education".
For healthcare, the report noted that increasing spending to 3.8 per cent of GDP by FY2048 is essential to ensure better access to medical facilities and improved health outcomes.
The study estimated that a 2.5 percentage point increase in education expenditure and a 3 percentage point rise in healthcare spending will be necessary over the coming years.
"By the time India reaches a developed country status, the general government per capita spending on education may be required at 6.5 per cent of GDP," the report states.
Given India's young population and expanding workforce, higher investment in education is crucial to prepare the country for future challenges.
The findings emphasized that a well-educated and healthy population is essential for India's long-term growth. Strengthening these sectors will not only help achieve the 'Viksit Bharat' vision but also improve overall living standards and economic progress.