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Chapter 5: Human Capital Formation In India
Think of one factor that has made a great difference in the evolution of mankind.
Perhaps it is the human capacity to store and transmit knowledge that they have been doing through conversation, songs, and through elaborate lectures. But humans soon found out that we need a good deal of training and skill to do things efficiently.
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 or her contribution to economic growth is, consequently, more.
Education is sought not only as it confers higher earning capacity on people but also for its other highly valued benefits: it gives one a better social standing and pride; it enables one to make better choices in life; it provides knowledge to understand the changes taking place in society; it also stimulates innovations.
Moreover, the availability of an educated labor force facilitates the adaptation of new technologies. Economists have stressed the need for expanding educational opportunities in a nation as it accelerates the development process.
5.2 What Is Human Capital?
Just as a country can turn physical resources like land into physical capital like factories, similarly, it can also turn human resources like nurses, farmers, teachers, and students into human capital like engineers and doctors.
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.
In other words, we need good human capital to produce other human capital (say, nurses, farmers, teachers, doctors, engineers…). This means that we need investment in human capital
to produce more human capital out of human resources.
Let us understand a little more of what human capital means by posing the following questions :
(i) What are the sources of human capital?
(ii) Is there any relationship between human capital and the economic growth of a country?
(iii) Is the formation of human capital linked to people’s all-round development or, as it is now called, human development?
(iv) What role can the government play in human capital formation in India?
5.3 SOURCES OF HUMAN CAPITAL
Investment in education is considered one of the main sources of human capital. There are several other sources as well.
Investments in health, on- the job training, migration, and information are the other sources of human capital formation Why do your parents spend
money on education?
Spending on education by individuals is similar to spending on capital goods by companies with the objective of increasing future profits over a period of time. Likewise, individuals invest in education with the objective of increasing their future income.
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NCERT Solutions Class 11 Economics Chapter 5 Human Capital Formation In India
1. What are the two major sources of human capital in a country?
Two major sources of human capital in a country are:
1. Health: Health is one of the most important sources of human capital. Healthy individuals can contribute to human capital formation by being more active, energetic.
2. Education: Education plays an important role in human capital formation, an educated individual will be better equipped to learn modern technology and increase the overall productivity of the nation.
2. What are the indicators of educational achievement in a country?
Some of the indicators of Educational achievement in a country are:
1. Primary Education Completion Rate: This rate shows the percentage of students who have completed the last year of primary education.
It includes students who studied in classes 1 to 8 and are between the age group 6 to 14 years. It has been shown that lower primary education completion rate is instrumental in a lower youth literacy rate and correspondingly lower adult literacy rate.
2. Youth Literacy Rate: This highlights the rate of literate people between the ages 15-24 who are able to read and write. As youth are the pillar of a nation, the more this segment is educated, more will be the development of the nation.
3. Adult Literacy Rate: It refers to all the literate population who are more than 15 years of age. It is expressed as a percentage and the higher the literacy rate, more will be the employment opportunities.
This category is very important as a literate population will be better equipped to perform many tasks. It is an important indicator that indicates the number of people who can actively participate in economic development activity.
3. Why do we observe regional differences in educational attainment in India?
In India, there are many religions, cultures, and communities. Each state of India is different from the other one and therefore regional differences exist which causes hindrances in attaining education in our country.
We see that some regions lack the proper facilities required to sustain education while in some states there is very high literacy rates.
People in less educated states are mostly involved in agriculture or any other informal sector and hence do not value education that much and it is also due to the low standard of living and poverty that people prefer not to educate children and make them involved in informal sectors. This explains the regional difference that is prevalent in India in case of education.
NCERT Class 11 Economics Textbook Chapter 5 Human Capital Formation In India With Answer PDF Free Download