How early childhood development shapes human capital formation 

Years later, when letters still refuse to form meaning, the system calls her a failure. But she did not fail. The failure happened years earlier, in the years when nobody built the foundation. Learning never truly began. The system simply didn’t notice until it was too late.

This is evident in the Annual Status of Education Report (ASER) 2024, which found that 76 per cent of Class 3 students, 55.2 per cent of Class 5 students, and 32.5 per cent of Class 8 students couldn’t read at a Class 2 level. 

Investing in early childhood development 

For two decades, the ASER has returned with the same verdicts: more than half of India’s Class 5 children cannot read a Class 2 text. India’s response to poor learning has largely focused on schools, teachers, curriculum, and assessments. But this approach assumes that children enter school with basic readiness. But many do not. 

Children come with different early experiences. Some have access to language, play, and care. Others face poor nutrition, illness, and limited interaction. Schools receive children after the most consequential years of their development have already passed. These differences translate into learning gaps from the first day of school.

James Heckman, a Nobel Laureate in Economics and an expert in the economics of human development, argued that the highest rate of return in early childhood development comes from investing as early as possible. A child before six develops language, curiosity, and the capacity to concentrate faster than an adult. Denying these foundations is like asking a child to build a house without first laying the ground floor.

But Amartya Sen saw it beyond economics. In his capability approach, Sen argued that the objective of development should be the expansion of human capabilities that enable them to live with freedom and dignity. This approach underpins the United Nations’ concept of Human Development. 

Meghalaya’s Early Childhood Development model

Within this broader context, Meghalaya’s Early Childhood Development (ECD) model offers an example. The state faces multiple risks, including high maternal mortality, anaemia among women and children, and gaps in antenatal care. These issues, which are often compounded by poverty, remoteness, and low trust in the healthcare system, shape children’s development even before they are born. 

A child born to an anaemic mother, without access to proper care, in a remote setting with weak health support, begins life at a disadvantage. If nutrition remains poor and early developmental delays are not identified, the gap does not close. It widens. 

Recognising the interlinked nature of nutrition, health, and developmental delays, Meghalaya adopted a systems-based ECD mission that focuses on early identification and coordinated action. The idea is simple: a child cannot develop in fragments. Nutrition, care, protection, and learning must come together through policy and practice.

Evolution of policies

The evolution of policy on early childhood in India has not happened in a vacuum. The National Education Policy (NEP) 2020 places Early Childhood Care and Education (ECCE) at the center of foundational learning, recognising that cognitive development begins long before formal schooling. 

POSHAN Abhiyaan (Prime Minister’s Overarching Scheme for Holistic Nourishment) exemplifies this, as it moved from treating nutrition primarily as a welfare concern to recognising it as a national priority linked to human capital development, the Sustainable Development Goals (SDGs), and long-term growth.

Mission Poshan 2.0 (Mission Saksham Anganwadi and Poshan 2.0) consolidated India’s nutrition initiatives by creating a unified and integrated framework that subsumed the following schemes:

Anganwadi Services

Scheme for Adolescent Girls

POSHAN Abhiyaan

Anganwadi centres play a crucial role in early childhood education, alongside nutritional and health support. The Early Childhood Care and Education (ECCE) Policy 2013 emphasises the “need to ensure Early Childhood Care and Education for every child below six years across the country”. 

Early childhood health, nutrition and education

Several states have moved rapidly on this. Uttar Pradesh is hiring 20,000 Balvatika educators and investing Rs 260 crore from Samagra Shiksha budgets to hire ECCE educators. Odisha has introduced pre-primary grades in over 45,000 primary and composite schools, hiring an equal number of dedicated helpers to ensure effective classroom support. Haryana has also expanded pre-primary education to over 8,000 primary schools.

The objective is to build foundational literacy, numeracy, communication, and socio-emotional skills during the most formative years of a child’s life. However, implementation remains uneven. 

For instance, of the existing 14 lakh Anganwadi Centres, 12 lakh require an additional educator. Many children leave Anganwadis as they approach age five, with only 37 per cent of 5-year-olds and 11 per cent of 6-year-olds still enrolled. 

Yet, the recognition of the fact that investment in early nutrition, health, and learning are investments in human capital now shapes not just school readiness and learning outcomes, but also future productivity. 

Literacy as an issue of governance

Whether a child learns to read cannot be determined by the classroom alone. It depends on whether her mother received antenatal care and nutritional supplements, and whether the local Anganwadi was functional and adequately staffed. Foundational literacy is therefore not only limited to education, but also an issue of governance.

This has implications for India’s demographic future. India is expected to reach the world’s largest working age population by 2055. But a demographic dividend is not automatic; it is created through sustained investments in human capabilities. 

Millions entering the workforce must be healthy, educated, and capable of participating in the economy. As economists such as Arvind Subramanian and Josh Felman have argued, a large population without adequate human capital will not be a dividend but a developmental burden.

In this context, foundational literacy acquires greater importance in the age of artificial intelligence and digital economies. Today’s children are growing up in a world mediated by algorithms, automated systems, and digitally curated information. A child who cannot read with comprehension cannot effectively evaluate online information, understand health advisory, or resist misinformation. 

Marginalised communities, AI literacy 

The learning crisis does affect all children equally. It disproportionately affects girls from marginalised communities and tribes, particularly in remote districts. Enrollment may not be a problem, but dropout rates during adolescence remain high among girls who are pulled into unpaid domestic labour and caregiving responsibilities. 

Such educational exclusion cannot be corrected through later intervention alone. It reflects a systemic failure to sustain girls’ education, with long-term consequences for human capital formation.

Research by Esther Duflo demonstrates that women’s education is the most powerful driver of intergenerational human development. Educated women contribute to lower child mortality, improved household nutrition, and better learning outcomes for future generations.

At the same time, the demands of literacy in the twenty-first century are changing. Artificial intelligence is increasingly becoming a basic infrastructure for accessing information, employment, and healthcare services.

 India’s early childhood push for human capital

India’s recent initiatives like the NIPUN Bharat (National Initiative for Proficiency in Reading with Understanding and Numeracy), Mission Saksham Anganwadi, Meghalaya’s integrated ECD framework, and focus on ECCE represent a genuine effort to address the roots of the country’s learning and human capital development issues. 

These initiatives recognise that human capital formation begins in the first five years of a child’s life. It is shaped by the nutrition children receive, the care they experience, and the learning environment in which they grow. Human capital remains the foundation of sustainable development and meaningful economic growth that is durable rather than merely statistical. Every effort to strengthen foundational skills is a step toward that promise.

Post read questions

Foundational literacy is not merely an educational issue but a governance challenge. Examine in the context of early childhood development in India.

Discuss the significance of the National Education Policy (NEP) 2020 in strengthening Early Childhood Care and Education (ECCE) in India.

How do nutrition, maternal health, and early learning shape educational outcomes in later years? Examine with suitable examples.

Educational inequality begins long before a child enters school. Discuss with reference to early childhood development in India.

Evaluate the role of Mission Saksham Anganwadi and Poshan 2.0 in addressing India’s foundational learning issue.

(Archana Singh is an Assistant Professor of Gender and Economics at the International Institute for Population Sciences, Mumbai, and Pushpendra Singh is an Assistant Professor of Economics at Somaiya Vidyavihar University, Mumbai.) 

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