The central government has drafted a new education policy with accessibility, equity, quality, accountability and affordability as its cornerstones, he said.
"These are the five pillars of the new national education policy. The objective is to ensure quality education at affordable cost to everyone," he said.
He was addressing a meeting at the foundation stone laying ceremony of Vellore Institute of Technology's Andhra Pradesh campus at Ainavolu village in the capital region Amaravati.
"It is a shame to all of us that 35 per cent of our population is still illiterate even all these years after Independence. It is a shame for the country, the system and the political leadership that 35 per cent of people cannot read or write. This should be taken as a challenge," he said.
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Naidu also stressed the need for more focus on research activity.
"We need more research scholars as we are lacking in research. While China has 39 per cent PhDs, India has only 3.40 per cent. In China, enrolment in engineering courses is 34 per cent compared to just six per cent here," he pointed out.
"There is nothing wrong in going abroad. You go, learn, earn and return," he remarked.
Observing that the "Soviet model of socialism" did not suit India, Naidu said the government and the private sector should work together to further development.
"We have to hone the local talent and encourage it. As part of that public-private partnership is essential to set up institutions. We have to create wealth so that it can be distributed to all," the Union Minister noted.
Chandrababu Naidu said Andhra Pradesh would emerge as the
number one in knowledge in future.
"Some of the best universities of the world will come to Amaravati to open their campuses. This will become a knowledge hub soon," he said. Amaravati would be developed as one of the top 10 best cities in the world, he said.
VIT, a deemed university, would complete construction of buildings in Amaravati in six months and start courses from the next academic year, its Chancellor G Viswanathan said.
Viswanathan also announced that VIT was adopting Ainavolu, Sakhamuru and Velagapudi villages in the capital for development.