New Delhi, Nov 19 (IANS): India's biggest strength will be its demographic dividend, President Pranab Mukherjee said Tuesday and noted that innovation was critical to enhance country's competitive advantage in an increasingly globalised world.

Speaking at a function at Rashtrapati Bhavan after receiving third year's "Report to the People" of National Innovation Council, the president said knowledge and innovation were the twin pillars on which the country will prosper in the 21st century.

"Innovation is crucial to enhance competitiveness in an increasingly globalised world. In Indian context, it is critical," the president said.

He said innovation should be used to meet challenges in sectors such health, education and housing.

He said innovation should be applied "not only to generate solutions but to make development process more inclusive."

Noting that India's biggest strength is going to be demographic dividend, he said innovation in education, skill development and entrepreneurship can help the youth of the country emerge as workforce for India and also the world.

He said the India should use innovation as ladder to become a developed country and called upon all citizens to be part of the "innovation movement".

Speaking on the occasion, Rural Development Minister Jairam Ramesh hoped that 250,000 gram panchayats in the country will be connected through national optical fibre network by the end of next year.

Ramesh said his ministry had offered the ministry of communications to be "anchor investor" to take net connectivity from a single point in villages to schools and other such places.

He said use of Aadhaar will revolutionise cash payments and will help curb corruption.

Ramesh said his ministry has started concurrent evaluation of its schemes to know about physical outcomes of nearly Rs.100,000 crore investment in rural development by the central government every year.

Sam Pitroda, chairman, National Innovation Council (NIC), said the government formed the council to increase productivity, improve efficiency and bring down costs.

He said the United Progressive Alliance government was using innovation to democratise information.

Pitroda said NIC wanted to create new ecosystem for people to think differently and was taking several initiatives in schools like scholarships and awards.