We all have heard of the term ‘capital’ in economics. Adam Smith defines capital as “That part of man’s stock which he expects to afford him revenue”. Capital is one of the four sectors of production– land, labour, and entrepreneurship being the other three. There are many types of capital. However, for time being, we shall focus our discussion on two types of capital – physical capital and human capital. Physical capital is related to the non-human assets which help in the production process.  It includes machinery, buildings, computers, etc – which are tangible in nature. Physical capital is divided into 2 categories – working capital and fixed capital. Whereas, human capital is connected with human assets – education, health, or skills. It cannot be touched, however, it can be measured and analyzed. In the manufacturing economy, humans are counted as ‘labour’ – one of the four factors of production. In that sense, an individual is a resource – ie. labour/worker. However, as we moved from a manufacturing economy to an informational economy, there is a paradigm shift in the way humans are seen. A human being is now not seen as a resource/labour, but rather is seen as an asset or capital. Hence the term ‘Human Capital’. Remember what we mentioned in the beginning – capital is also one of the four factors of production. It is from the 7th Five Year Plan onward that we began to focus on Human Development. To quote the Plan document, “Human resources development has necessarily to be assigned a key role in any development strategy, particularly in a country with a large population. Trained and educated on sound lines, a large population can itself become an asset in accelerating economic growth and ensuring a social change in desired directions“. India’s rank in Human Development Index (HDI) 2021 is 132. India is home to the world’s youngest population as half of its population is below the age of 25. This demographic advantage in India is available for five decades from 2005-06 to 2055-56, longer than any other country in the world. This demographic advantage can be reaped only if education, skilling, and employment opportunities are provided to the young population.