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India; an emerging knowledge economy


In the new economic order of Knowledge Economy, knowledge leads the way for wealth creation. Knowledge is extensively used either as a product or a tool for economic prosperity. This blog highlights  the enabling environments in India that facilitate the emergence of India as a Knowledge Economy.


Enabling Environment: Formal Education System 


Historic Innovations

With traceable history of formal education dating back to 5th Century BCE or BC, starting from Taxila and Nalanda, India stands among the world's most favourite Education Gateways. The developments in the 5th Century BCE had the strong back up of the centuries of experience acquired from the Gurukul system of education, perhaps the earliest form of residential education system, existed since the vedic period.

Whether it is vedic era or the era of ancient India or medieval era or colonial era or the present independent era, the education system in India, both formal and non-formal, managed to attain new heights steadily. This progress was not a routine play of the times, instead it was (and is) definitely planned by realizing the value of education.

After independence in 1947, determined efforts were made to build a network of schools, universities, and their affiliated colleges throughout the country. This was further supported by many policy/legislation initiatives.

Legal framework

The establishment of the UGC as a statutory body under an Act of Parliament in 1956 was the first major legislative measure initiated by the Independent India in the higher education sector.

Another milestone in the current century, the 86th amendment of the Indian Constitution to make education a fundamental right, was passed by the Indian Parliament in 2002. The latest most important legislation is the Right of Children to Free and Compulsory Education Act, passed by the Parliament in 2009 and enacted on 1st April, 2010. The new law makes it obligatory for the state governments and local bodies to ensure that every child in the age group 6 -14 gets education in a school in the neighbourhood.

Towards boarder-less education

One of the most required enabling environments  for the growth of a Knowledge Economy is an education system that is completely receptive to the demands of the world labour market. The permanent solution for this, not only in Indian context but also for all Nations in the world, is yet to be materialized Transnational Qualifications Framework (TQF) that would ensure the labour market acceptance of qualifications across the world. We have two major initiatives in the world in this regards viz European Qualifications Framework (EQF) initiative of European Union and the Transnational Qualifications Framework being promoted by Commonwealth of Learning (COL) though its Virtual University for Small States in the Commonwealth (VUSSC) project. But it does not mean that Knowledge Economies should await TQF to be materialized. National Qualifications Frameworks that are receptive to the demands of the world can also effectively nurture Knowledge Economies.

In the above context, the Central Board of Secondary Education (CBSE), the apex body of Secondary Education in India, had implemented a National Qualification Framework for classes up to 12th earlier and now decided to launch an international “child-centric” curriculum from 1st April, 2010. The new curriculum will help Indian students get admission in foreign universities and facilitate admission for those wanting to study in India.

Indian UGC's Higher Education Information Systems Project, launched in 2004, among other things, aims at National Qualification Framework, Graduates Registration & Information System, Knowledge Repository, Web-based Standard Solution for an Educational Institution , Recognition Management System, Expertise & Facilities Database etc. These initiatives would definitely help UGC to design a higher education system that is receptive to the demands of a Knowledge Economy. 

Network of educational institutions

Access to formal education is vital to the growth and sustenance of Knowledge Economies. India has a strong and mature education system with more than one million schools to impart primary, secondary and higher secondary education, thousands of institutions providing accredited certificate and diploma courses on almost all professional  disciplines and a higher education system with  over 300 Universities and 45,000 Colleges affiliated to them (and growing each year). All categories/disciplines of study and research
being demanded by the world labour market are available through these extensive network of educational institutions. 

Enabling Environment: Lifelong Learning System 

Knowledge Economies cannot sustain depending on formal education systems alone. Knowledge Economies become a reality when human development is best assured through strong lifelong learning systems. Lifelong learning systems incorporate all modes and methods of education like  formal/non-formal, conventional classroom based and technology mediated leaner centric open distance learning etc etc.

Indian education policies provide due emphasis for Lifelong Learning. The report of the Education Commission (1964-66) observed that education does not end with shooling but it is a lifelong process. The National Policy on Education in India – 1986 (modified in 1992) considered Lifelong Education as the cherished goal of the educational process which presupposes universal literacy, provision of opportunities for youth, housewives, agricultural and industrial workers and professionals to continue the education of their choice at the pace suited to them. It observes that the critical development issue is the continuous upgradation of skills so as to produce manpower resources of the kind and the number required by the society. The Eleventh Five year Plan (2007-20012) envisages strong Lifelong Learning Systems. All these policy initiatives together triggered sincere efforts to design effective lifelong learning systems in all sectors, which include Formal Education, Adult Education, Literacy programmes including e-Literacy, Extension Education in all sectors of vocation, Lifelong policy based human resource Training and Development initiatives in government including public sector undertakings, all walks of service/production/finance industry etc.

The PREAMBLE to the Skill Development Policy of India (2009) starts with the following statements:

Skills and knowledge are the driving forces of economic growth and social development for any country. Countries with higher and better levels of skills adjust more effectively to the challenges and opportunities of world of work.

Potentially, the target group for skill development comprises all those in the labour force, including those entering the labour market for the first time (12.8 million annually), those employed in the organized sector (26.0 million) and those working in the unorganized sector (433 million) in 2004-05. The current capacity of the skill development programs is 3.1 million. India has set a target of skilling 500 million people by 2022.

Enabling Environment: Connectivity

Connectivity is the Circulatory System of a Knowledge Economy. Therefore  the strength and weakness of the connectivity will directly influence the health of a Knowledge Economy. Timely acquisition, transition and application of knowledge guide the development of a Knowledge Economy and continue to determine its fate.Though the emphasis is for ICT based connectivity, all other conventional methods of connecting people that are organized effectively will also contribute for the formation, growth and sustenance of Knowledge Economies.


As per a Press Release of the TELECOM REGULATORY AUTHORITY OF INDIA (TRAI) dated 23/02/2010, by 31st January 2010, the Total Telephone subscriber base of  India reached 581.81 Million and the Wireless subscription reached 545.05 Million. With this, the overall Tele-density in India reached 49.50. Total Broadband subscriber base has increased from 7.83 million in December-09 to 8.03 million in January-2010.


Enabling Environment: Governance, Commerce and Industry

In reality the enabling environment for Knowledge Economy in  Commerce and Industry is the net effect of all other enabling environments that we discussed above. Very fast growth of service sector industry including consultancy and management services, e-commerce, BPO, share marketing, software industry, prominence of e-governance etc can be taken as reliable indications for the formation of a Knowledge Economy.Current decade has so far recorded tremendous growth of the above indicators in India. In short, Governance, Commerce and Industry including financial sector provide a very enabling environment for  the emergence of India as a Knowledge Economy. 

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