role of human capital in economic development class 12

What are the indicators of educational achievement in a country? An improvement in the stock of human capital helps accelerate economic … • Hence, human skill and their efforts help in effective utilization of physical capital. India recognised the importance of human capital in economic growth long ago. People migrate in search of jobs that fetch them higher salaries than what they may get in their native (i) Education confers higher earning capacity on people; (ii) It gives better social standing and pride; (iii) It enables one to make better choice in life; (iv) It provides knowledge to understand the changes taking place in society; (vi) It facilities adaptation of new technologies. • Migration in both these cases involves two kind of cost: (I) Cost of transportation from one place to another;and. 12. 14. Physical capital refers to assets which themselves have been manufactured and are used for production of other goods and services. Children are given different types of school education and health care facilities by their parents and the society. due to this reason , the facilities for the formation of human capital have remained grossly inadequate. 1. It has been observed that educated persons have families as compared to illiterate families. Human capital formation is to be done through conscious policy formulation. Free PDF download of Important Questions with Answers for CBSE Class 11 Indian Economic Development Chapter 5 - Human Capital Formation in India prepared by expert Economics teachers from latest edition of CBSE(NCERT) books. 3. 1. Then, the relationships between human capital and economic growth were analyzed with cointegration and causality tests by using the data of Turkey for the period 1961-2011. Health expenditure directly increases the supply of healthy labour force and is, thus, a source of human capital formation. • Information is necessary to make decision regarding investments in human capital as well as for efficient utilization of the acquired human capital stock. (ii) Is there any relation between human capital and economic growth of a country? In the case of human capital, depreciation takes place with ageing but can be reduced, to a large extent, through continuous investment in education, health, etc. The economic and social benefits of human capital formation and human development are well known. 5. • The literacy rate for both adults as well as youth have increased. In fact, the major difference between the developed and developing countries is the rate of progress in human capital. 16. For example, people want to know the level of salaries associated with various types of jobs, whether the educational institutions provide the right type of employable skills and at what cost. technologies. IT can make existing assets and processes more effective and efficient but, first of all, a basic infrastructure needs to be developed. Education today is inseparable from the development of human capital. Growth in government expenditure on education. Do you know who takes care of education and health in India? It is a source of both increased productivity and technological advancement. • The expenditure on education is very less as compared to the desired level of education expenditure recommended by the various commissions. Technically qualified persons, like engineers and doctors, migrate to other countries because of higher salaries that they may get in such countries. In the human development perspective, human beings are ends in themselves. • Increase in productivity and quality production depends on technical skill of the people, which can be acquired only by means of education, training and maintaining the health of the people. The percentage of ‘education expenditure of total government expenditure’ indicates the importance of education in the scheme of things before the government. medical intervention during illness; (iii) Social medicine, i.e. Before we take up the analysis of the education sector in India, we will look into the need for government intervention in education and health sectors. Due to measurement problems, it is difficult to prove that increase in human capital causes economic growth . To get fastest exam alerts and government job alerts in India, join our Telegram channel. CHAPTER ONE. Table 5.1 that these sectors have grown simultaneously. 5.7 Higher Education: few takers are utilised in our own country. Should Wizard Hit Mommy Class 12 English Notes | StudyTution, RURAL DEVELOPMENT Class 12 Economics Notes | StudyTution, What Where, How and When? Formation of human capital is a partly a social process and partly a conscious decision of the possessor of the human capital . Physical capital is completely mobile between countries except for some artificial trade restrictions. The human capital represents the enhanced labour productivity which is an acquired ability and an outcome of deliberate investment decisions. Human Capital Formation It is the process of adding to the stock of human capital over time. Expenditures on education and health make substantial long-term impact and they cannot be easily reversed; hence, government intervention is essential. The physical capital is needed to make use of physical resources. Nature of benefits flowing from human capital are different from that of physical capital. • Adequate food and proper nourishment to people , along with adequate health and sanitation facilities leads to qualitative improvement in human capital. Both, the union and state governments, have been stepping up expenditures in the education sector over the years in order to fulfil the objective of attaining cent per cent literacy and considerably increase the average educational attainment of Indians. Therefore, physical capital formation can be built even through imports, whereas human capital formation is to be done through conscious policy formulations in consonance with the nature of the society and economy and expenditure by the state and the individuals. individual’s income generating capacity. In 1950, when the Constitution of India was passed by the Constituent Assembly, it was noted in the Directives of the Constitution that the government should provide free and compulsory education for all children up to the age of 14 years within 10 years from the commencement of the Constitution. As a percentage of total government expenditure: It indicates the importance of education in the scheme of things before the government . In December 2002, the Government of India, through the 86th Amendment of the Constitution of India, made free and compulsory education a fundamental right of all children in the age group of 6-14 years. A sick labourer without access to medical facilities is compelled to abstain from work and there is loss of productivity. capital were theoretically investigated. Maud's, Pastor and Serrano aimed to find the role of human capital in the productivity gains of OECD countries form 1965-1990. Why is human capital important for development? The relationship between human capital and economic growth flows in either directions. Human capital benefits not only the owner but also the society in general. The notion that the study of human capital is inherently historical is emphasized and defended. For instance, once a child is admitted to a school or health care centre where the required services are not provided, before the decision is taken to shift the child to another institution, substantial amount of damage would have been done. understand the concepts of Human Resources, Human Capital Formation and Human Development, have understood the links between investment in human capital, economic growth and human development, have understood the need for government spending on education and health. • On-the-job-training may take different forms: (I) Workers may be trained in the firms itself under the supervision of a skilled worker; (II) Workers may be sent for of-campus training. Expenditure regarding on-the-job training is a source of human capital formation as the return of such expenditure in the form of enhanced labour productivity is more than the cost of it. 8. Human capital is intangible and cannot be sold in the market. This may take different forms: one, the workers may be trained in the firm itself under the supervision of a skilled worker; two, the workers may be sent for off-campus training. • In 1950, it was noted in the directive of the constitution that the government should provide free and compulsory education for all children up to the age of 14 years. Investment in education gives additional skills to do the some job or variety of other jobs. Moreover, the human capital formation at this stage is dependent upon the already formed human capital at the school level. Societies need sufficient human capital in the first place—in the form of competent people who have themselves been educated and trained as professors and other professionals. The providers of education and health services may acquire monopoly power and may get involved in exploitation. Human development is based on the idea that education and health are integral to human well-being because only when people have the ability to read and write and the ability to lead a long and healthy life, they will be able to make other choices which they value. Had we achieved this, we would have cent per cent literacy by now. • High level of human capital causes growth of income. • Unemployed people from rural areas migrate to urban areas in search jobs. 7. CBSE Class 12 Economics - Human Capital Formation in India Human Capital Formation In India The stock of skill and expertise of a nation at a point of time is referred to as the Human Capital or the sum total of all the workers engaged in the process of production is called Human Capital. spread of health literacy; As stated earlier , productivity of physical capital is substantially enhanced with the improvement in human capital . Both forms of capital depreciate with time but the nature of depreciation differs between the two. technologies. Human capital formation is thus associated with investment in man and his development … A substantial part of the human capital formation takes place in one’s life when she/he is unable to decide whether it would maximise her/his earnings. The Seventh Five Year Plan says, “Human resources development (read human capital) has necessarily to be assigned a key role in any development strategy, particularly in a country with a large population. • For example, education measured in terms of year of schooling , teache-pupil ratio and enrollment rates may not reflect the quality of education. • The government estimated to get revenue of Rs 4000-5000 crore and the entire amount was allocated for spending on elementary education. You know that the owner of a physical capital, says a bus, need not be present in the place where it is used; whereas, a bus-driver, who possesses the knowledge and ability to drive the bus, should be present when the bus is used for transportation of men and materials. Discuss the need for promoting women’s education in India. Maudos, Pastor and Serrano aimed to find the role of human capital in the productivity gains of OECD countries form 1965-1990. There have been some instances of villagers using e-mail which are cited as examples of such transformation. Education for All — Still a Distant Dream: Though literacy rates for both — adults as well as youth — have increased, still the absolute number of illiterates in India is as much as India’s, population was at the time of independence. Compared to this desired level of education expenditure of around 6 per cent of GDP, the current level of a little over 4 per cent has been quite inadequate. • Tapas majumdar committee recommended that government should spend 1.37 lakh crores in year 1998-99 — 2006-07 to bring all the children of age group between 6- 14 years under Schooling, In 2009, the Government of India enacted the Right of Education Act to make free education a fundamental right of all children in the age group of 6-14 years, • To achieve this aim , government needed an estimated expenditure of around Rs 1 lakh crore over 10 years (1998-199 to 2006-07). during 1952-2014,; it increased from 7.92 to 15.7. That is, benefits from a capital good flow to those who pay the price for the product and services produced by it. have learnt about the state of India’s educational attainment. Health expenditure is a source of human capital formation as it directly increases the supply of health labour force. Bring out the differences between human capital and human development. How is human development a broader term as compared to human capital? 11. Education is considered an important input for the development of a nation. Human capital formation accelerates the economic growth whereas economic growth in turn facilitates human capital formation. How? This means that we need investment in human capital to produce more human capital out of human resources. We know that the labour skill of an educated person is more than that of an uneducated person and hence the former is able to generate more income than the latter and his contribution to economic growth is, consequently, more. Spending on education The constitution of India mentions the functions to be carried out by each level of government. India recognised the importance of human capital in economic growth long ago. • Labour skill of an educated person is more than that of an uneducated person , which enables him to go generate more income than that of an uneducated person. Thus, both education and health, along with many other factors like on-the-job training, job market information and migration, increase an Human capital refers to the “knowledge, information, ideas, skills, and health of individuals” (ecker î ì ì î). • Economic development of a country depends on the minds of the people and their changing attitudes towards creating a’will’ for development. Migration in both these cases involves cost of transport, higher cost of living in the migrated places and psychic costs of living in a strange sociocultural setup. Its accumulation is quite important for economic growth of a country . 4. • Economic development of a country depends on the minds of the people and their changing attitudes towards creating a’will’ for development. India has a rich stock of scientific and technical manpower in the world. Physical capital is the outcome of conscious of owner and is mainly an economic and technical process. Discuss the following as a sources of human capital formation (i) Health infrastructure (ii) Expenditure on migration. Human development is said to have occurred when most of the people of a country or economy are healthy and educated whereas in case of human capital the focus is on health and education as a medium to make the … Chapter: Chapter 5 – Human Capital Formation in India. Read the annual reports of Union Ministries of Human Resource Development and Health and make summaries. The results suggest that the role of human capital is indeed one of facilitating adoption of technology from abroad and creation of appropriate domestic technologies rather than entering on its own as a factor of production.17 In addition, we used likelihood ratio tests to examine whether human capital in levels should be added to a regression which included growth rate of population and physical and human capital … Physical capital is tangible and can be easily sold in the market. But, it does not mean that financial resources should be transfer from tertiary to elementary education. A healthy person, by maintaining personal hygiene and sanitation, stops the spread of contagious diseases and epidemics. Individuals invest in education to increase their future income and raise the living standard. The Seventh Five Year Plan says, “Human resources development (read human capital) has necessarily to be assigned a key role in any development strategy, particularly in a country with a large population. Depreciation In human capital can be reduced by making continuous investments in education and health. Accordingly, expenditures on both education and health are to be carried out simultaneously by all the three tiers of the government. Trained and educated on sound lines, a large population can itself become an asset in accelerating economic growth and in ensuring social change in desired directions.” Human capital considers education and health as a means to increase labour productivity. The percentage of ‘education expenditure of GDP’ expresses how much of our income is being committed to the development of education in the country. Case with physical capital is substantially enhanced with the improvement in the economic growth of a country our... 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