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    Ch.4 Notes 12 Ied Ris

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    Ch.4 Notes 12 Ied Ris

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    15 views3 pages

    Ch.4 Notes 12 Ied Ris

    Uploaded by

    aryaharshit222

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 3

    Chapter-4 HUMAN CAPITAL FORMATION

    Human resource: All the people of the country who are able to work and willing to work are
    said to be human resource, example: Working population of the country.
    Human capital: It refers to the stock of skills and expertise of a country, which exists at a
    point of time. It is intangible.
    Human Capital Formation - It refers to the process of acquiring and increasing
    the number of persons who have the skill, education and experience which are
    critical for the economic and political development of a country.
    Difference between Human Capital and Physical Capital Formation

    Physical Capital Human Capital


    1. Refers to the stock of skill, ability,
     All those resources which are
    expertise, education and
    required for further production, knowledge in a nation at a given
    like plants and machinery, factory point.
    buildings, equipment etc. 2. Can’t be sold.
     Sold in market. 3. No depreciation.
     Depreciates over time. 4. Can’t be Separated.
     Separable from its owner. 5. Partially a social process.
     Economic and technical process

    Importance of Human Capital Formation in Economic Development


    a) Physical capital utilized efficiently.
    b) Optimum utilisation of resources.
    c) Better Co-ordination between factors.
    d) Innovations & technological improvement.
    e) Rate of economic growth becomes faster.
    f) Changes in the outlook of the labour force.
    g) Production of National Wealth goes up.
    h) Quality of life improves.

    Sources of Human Capital Formation


    Expenditure on Education: increases future income & raises standard of living.
    Expenditure on Health: helps to build productive labour force & improve
    quality of life.
    On-the-job-training: increases skill & efficiency of workers.
    Expenditure on Migration: helps to increase earnings in the migrated place.
    Expenditure on Information: helps to make decisions in investment in human
    capital.

    Concept of Human Development Index (HDI)


    Human development index is broadly an arrangement of social aggregates average of
    longevity, knowledge and access to resources. India’s position is 132nd out of 191 countries of

    pg. 1
    the world. It is from the HDI prepared by UNDP in 2021. The value of HDI is 0.633.

    Problems of Human Capital Formation


    Insufficient resources: Resources allocated have been much less than resources
    required.
    Serious inefficiencies: Underutilization of resources, massive illiteracy, poor health
    facilities etc have not been attended to properly.
    High growth of population: Reduces per head availability of facilities & hence
    quality of human capital.
    Lack of proper manpower planning: Wastage of resources due to imbalance
    between
    demand & supply of skilled manpower resources.
    Insufficient on-the-job-training in Primary sector: Serious deficiency of human
    capital formation in the primary sector, mainly, agriculture.
    Low academic standards: Large numbers of poor quality higher education
    institutions churning out skill deficient human capital.
    Brain drain: Cost of loss of quality human capital which migrates in search of better
    jobs & salaries are very high.

    EDUCATION SECTOR IN INDIA


    Education: It refers to the process of teaching, training and learning especially in schools or
    colleges, to improve knowledge and develop skill.

    RIGHT TO EDUCATION ACT: A Fundamental Right

    The Constitution (Eighty-sixth Amendment) Act, 2002 inserted Article 21-A in the
    Constitution of India to provide free and compulsory education of all children in the age group
    of six to fourteen years as a Fundamental Right.
    ‘Free education’ means that no child, other than a child who has been admitted by his or her
    parents to a school which is not supported by the appropriate Government, shall be liable to pay
    any kind of fee or charges or expenses which may prevent him or her from pursuing and
    completing elementary education.
    ‘Compulsory education’ casts an obligation on the appropriate Government and local
    authorities to provide and ensure admission, attendance and completion of elementary
    education by all children in the 6-14 age group. With this, India has moved forward to a rights
    based framework that casts a legal obligation on the Central and State Governments to
    implement this fundamental child right as enshrined in the Article 21-A of the Constitution,
    in accordance with the provisions of the RTE Act.
    Educational Achievement in India
    It is based on three components:
    Adult literacy rate: It refers to the ratio of literate adult population to the total adult population
    in a country. This rate is the most important indicator for a country as it indicates the
    percentage of the population that can participate in the economic activity of the country. It has
    shown a rise amongst both males & females.

    Primary completion rate: It refers to percentage of students completing the last year of
    primary school. Lower primary education completion rate leads to lower youth literacy rate
    and, hence, lower adult literacy rate. It has shown a rise amongst both males & females.

    Youth literacy rate: It is the percentage of people in the age group of 15-24 who can, with
    understanding, read and write a short, simple statement on their everyday life. higher the youth

    pg. 2
    literacy rate, higher will be the achievement of a country in terms of education. It has shown a
    rise amongst both males & females.

    Development/Availability of Education in India


    a. Elementary Education:
     Sarv Shiksha Abhiyan (SSA)
     Mid day Meal Plan.
     Kasturba Gandhi Vidyalaya..
     Balika Vidyalaya Scheme.
    b. Secondary Education:
     Navodaya Vidyalaya.
     Kendriya Vidyalaya.
     National Council of Educational Research and Training.
     Vocationalisation of Secondary Education.
    c. University and Higher Education:
     IGNOU
     Academic Staff College.
    d. Technical, Medical and Agriculture Education
    e. Rural Education
    f. Adult and Continuing Education

    Inadequacies and Challenges in Education Sector in India


     Widespread Illiteracy.
     Low rural access level.
     Low enrolment ratio.
    a) Insufficient Government Expenditure.
    b) Unbalanced Development.
    c) Disparities in Educational Development.
    d) Defective Examination System.
    (a) Gender Bias.
    (b) Lack of Vocational Training.
    (c) Low Standard of Education.
    (d) Privatisation of Education.

    Do following questions in your register:


    1. Discuss the need for expenditure on information as a source of human capital.
    2. “Higher income leads to high level of human capital.” Comment.
    3. Give an account of government’s expenditure on education.
    4. What are the objectives and functions of NCERT, UGC, AICTE and ICMR.
    5. Suggest measures to reduce problems of human capital formation.
    6. Explain the various sources of human capital.

    pg. 3

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