June 22 (Bloomberg) -- India plans to set up 30 universities and 6,000 model schools and is considering ways to establish a college in each of its 340 districts to improve the quality of education and add to the pool of skilled workforce.

``We need a quantum leap in our approach to higher education,'' Prime Minister Manmohan Singh said in an address at the University of Mumbai today. ``We need a massive expansion of higher education opportunities. We need to upgrade the quality of the higher educational institutions so that they work on the frontiers of knowledge.''

Less than half the students from school continue into college education in India, the world's second-most populous nation. Almost two-third of the country's universities and about 90 percent of the colleges are rated as below average of quality parameters, according to Prime Minister Singh. India needs to take advantage of its young population to sustain its pace of growth and reduce the number of poor, Singh said.

``We are at a point when the dynamics of our population growth can catapult us into a prolonged cycle of rapid economic growth,'' said Singh. ``We need to translate this potential into reality.''

About 54 percent of India's population was aged 24 or below in 2001, the government has said.

The government's plans to expand the number of universities, colleges and schools and improve the quality of education come when company associations are raising concerns of a shortage of skilled workers.

Skill Shortage

Companies in India will face shortage of skilled people in the next five years, the New Delhi-based PHD Chamber of Commerce and Industry said this month.

``No organized efforts are visible both at the private and public domain to create and upgrade the skill sets,'' Sanjay Bhatia, president of the PHD Chamber, said in a news release on June 12.

The government plans to establish 30 universities across the country, Singh said. Work on these universities will start in the next two to three months, he said.

``They should become the launching pads for our entry into the knowledge economy,'' said Singh.

The government will work with the states to ``support'' the expansion of colleges to the country's 340 districts. India is considering ways to fund the establishment of the colleges, Singh said.

India is working on a program to set up one ``high quality school'' in every block of the country, Singh said. These 6,000 publicly funded schools will establish ``benchmarks for excellence,'' he said.

To contact the reporter on this story: Gautam Chakravorthy in Mumbai at chakravorthy@bloomberg.net; Subramaniam Sharma in New Delhi at ssharma@bloomberg.net.

Last Updated: June 22, 2007 09:05 EDT