Karnataka 1st PUC Economics Question Bank Chapter 5 Human Capital Formation in India
1st PUC Economics Human Capital Formation in India Textbook Questions and Answers
I. Choose the correct answer (each question carries 1 mark)
Who can work better an any in the following?
(a) A sick person
(b) An unhealthy labourer
(c) A person with sound health
(d) None of the above
(c) A person with sound health
India’s literacy rate in 2013
What per cent of GDP as estimated by the Tapas Majum dar Committee should be spent for education.
Education for all,
(a) Still not a distant dream
(b) Still a distant dream
(c) Dreani only
(d) None of the above
(b) Still a distant dream
II. Fill in the blanks (each question carries 1 mark)
Investment in education is considered as one of the main sources of________
The government of India has also started levying a 2% of________ on all union taxes.
The revenue from education cess has been earmarked for spending on_________
Health expenditure directly increases the supply of
The contribution of an educated person to economic growth is more than that of a person.
III. Match the following (each question carries 1 mark)
|1. More contribution to national income||(a) Global growth to centres|
|2. Deutsche Bank||(b) India and the knowledge economy|
|3. World Bank||(c) Literacy rate|
|4. Educational achievements||(d) Illiterate person|
|5. Better gender equity||(e) A positive development|
|(f) Skilled labourer|
|(g) A negative development|
1- f; 2 – a; 3 – b; 4 – c; 5 – e;
IV. Answer the following questions in a word/ sentence (each question carries 1 mark)
State the need for investment in human capital.
There is a need to undertake investments in human capital. It is necessary to invest in human resources to make them more innovative, productive and useful by investing in their education, health and training. The government is taking many steps to educate, train and protect the health of the population to make it qualitative for economic development.
Why individuals spend money on education?
Investment in education is considered one of the main sources of human capital formation. Spending on education by individuals is similar to spending on capital goods by companies to increase their profits in future. Similarly, individuals invest in education in order to increase their earnings in the front of money income in future. Investment in education also promotes individual development which ultimately promotes the overall economic growth of the country.
National Council of Educational Research and Training.
State the reasons for migration.
People migrate in search of jobs that bring them higher income than what they get in their native places. Unemployment is the main reason for rural-urban migration in India.
University Grants Commission.
What was the literacy rate of India as per the 2001 census?
The literacy rate of India as per the 2001 census was 65.2%(2011 census 74%).
Indian Council of Medical Research.
IV. Answer the following questions in four sentences (each question carries 2 marks)
State the meaning of human capital. (S-2018)
Human capital refers to that part of the population that possesses skills, knowledge, education and experience. It also includes the ability of human beings to give their best and their ability to create economic value for things.
What are the two major sources of human capital in a country?
Education and Health are two main sources of human capital. Education raises the standard and quality of living of people. It increases the productive capacity and productivity- of the workforce by enhancing their skills. Health indirectly- helps in the economic development by supplying an active energetic and healthy workforce for better production.
What are the indicators of educational achievement in a country?
The indicators of educational achievements are as follows:
- Adult literacy level
- Primary7 education completion rate
- Youth literacy rate.
Bring out the differences between human capital and human development.
|Human Capital||Human Development|
|1. It means investing in human beings as we do in physical capital in order to get future returns in the font of higher productivity and earnings||1. It refers to the overall development of human beings which includes economic, social, political and spiritual aspects of their living.|
|2. It considers education and health as the means to increase labour productivity||2. It is based on the idea that education and health are integral to human wellbeing|
|3. It treats human beings as a means to an end. the end is the increase in productivity||3. It treats human beings as ends themselves|
|4. It is a narrow concept||4. It is a broader concept|
What factors contribute to human capital formation?
The factors which contribute to human capital formation are as follows:
- Expenditure on education
- Expenditure on health
- Expenditure on training
- Expenditure on information
What are the various forms of health expenditures? (N-2018)
The various forms of health expenditures as follows:
- Preventive medicine (vaccination)
- Curative medicine (medical intervention during illness)
- Social medicine (spread of health awareness)
- Provision of clean drinking water and good sanitation.
VI. Answer the following questions in twelve sentences (each question carries four marks)
Education is considered to be an important input for the development of the nation. How?
It is a well-known fact that the work skill of an educated person is more than that of an uneducated, person and that skilled labour always generates more income than unskilled labour. The contribution of an educated person to economic growth is more than that of an illiterate person.
Education provides knowledge to understand changes in society and scientific advancements and facilitate inventions and innovations. Further, the availability of an educated labour force facilitates adaptation to new technologies.
To sum up, education is considered as an important input for the development of a nation in the following ways:
- It gives a person the capacity to earn higher earnings.
- It provides knowledge to understand the changes taking place in society
- It encourages innovations and inventions
- It facilitates the development and adoption of new techniques of production.
How does investment in human capital contribute to growth?
Economic growth refers to an increase in real national income of a country over a period of time and human capital refers to skills and knowledge imbibed in human beings.
We know that the work skill of an educated person is more than that of an illiterate person and that the former generates more income than the latter. The contribution of the educated person to economic growth is more than that of an uneducated person.
Health is also an important factor for economic growth as a healthy person could provide uninterrupted output for a longer period of time.
Human capital contributes substantially not only towards increasing labour productivity but also stimulates innovations and creates the ability to absorb new technologies.
Therefore, a higher rate of human capital foundation definitely contributes more towards the country’s economic growth.
Bring out the need for on-the-job training for a person.
On-the-job training is nothing but an arrangement of training in which workers are given an opportunity7 to obtain skills while working. It includes the following:
- Providing training to workers in the industry itself
- Arranging training facilities outside the industry i.e., off-campus training
- Providing online training and arranging satellite programmes.
- Arranging excursion to industrially advanced regions and providing hands-on training. The on-the-job training facility helps human capital formation in the following ways:
- The employees cum trainees get ample time for learning new methods of production under the supervision of skilled workers
- The employees’ get extra technical skill without incurring any expenditure
- The employees will get adjusted to technical advancements and get promotion in their jobs
- It helps in undertaking innovations.
How government organisations facilitate the functioning of schools and hospitals in India?
The government organizations facilitate the functioning of schools and hospitals i.e., education and health in India as follows:
(a) Education sector: In India, the ministries of education at die Union and State level, Departments of Education and various organizations like the National Council of Educational Research and Training, University Grants Commission and All India Council of Technical Education facilitate institutions that come under the education to provide primary7, secondary, graduate and post-graduate and technical education respectively.
(b) Health sector: The ministries of health at the Union and State level, Departments of health and various organizations like the Indian Council for Medical Research facilitate institutions that come under tire health sector.
Further, as basic education and health care are considered as Re-fundamental rights of the citizens, it is essential that the Government should provide education and health services free of cost for the deserving citizens and those from the socially oppressed classes.
Explain the need for acquiring information relating to health and education expenditures.
The majority of people spend huge amounts to acquire information relating to the labour market and other markets like education and health.
For instance, 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 lands at what cost. This type of information is required to make decisions regarding investments in human capital and efficient utilisation of the acquired human capital stock.
Expenditure incurred for acquiring information relating to the labour market and other markets is also a source of human capital formation.
In simple words, people spend money to acquire information for the following reasons:
- To know the labour market (about salary’, types of jobs available, schools and colleges for the right type of employable skills-based education) and other markets like education and health.
- They spend on the above information to make decisions regarding investments in human capital and for efficient utilization of acquired human capital stock.
Discuss the need for promoting women’s education in India.
The difference in the literacy rates between males and females is narrowing signifying a positive development in general equality. There is a need to promote education for women in India on the following grounds:
- Education improves the economic independence of women
- Education increases the social status of women in the society
- Education makes a favourable impact on the fertility rate (i.e., it reduces birth rate)
- Education leads to better health care for both women and children.
VII. Answer the following questions in twenty sentences (each question carries 6 marks)
Discuss the following as a source of human capital formation.
(a) Health infrastructure
(b) Expenditure on migration.
(a) Health infrastructure: The various forms of health expenditures are as follows:
- Preventive medicine vaccinations to prevent deadly diseases
- Curative medicine obtaining medical treatment during illness
- Social medicine spread awareness about keeping good health and its importance.
- Provision of clean drinking water and good sanitation.
Healthy individuals are a food source of human capital as they directly contribute to regular and higher productivity of labour. A sick labourer without access to medical facilities has to remain absent from work. This leads to a loss of productivity. Hence, expenditure on health is an important source of human capital formation.
(b) Expenditure on migration: People migrate from their native places in search of jobs that may bring higher salaries. Unemployment is the only reason for rural-urban migration in India. Technically qualified persons like engineers and doctors migrate to other countries to earn better income. Though there is a high cost of transport, high cost of living and other factors, the enhanced income will motivate people to migrate. Hence, expenditure on migration is also a source of human capital formation.
Examine the role of education in the economic development of a nation. (N-2018)(S-2018)
Education plays a predominant role in the economic development of India in the following ways:
(a) It modernizes the attitude and behaviour of the people: Education brings favourable changes in the attitude and behaviour of people. It gives inputs like what is right and what is wrong and contributes to taking sound and value judgments.
(b) Promotes science and technology: Education always provides knowledge about the latest technology to people who know reading and writing. It explains the new methods of production through innovations in various sectors of the economy. By providing scope for the latest techniques of production, it develops agriculture, industry, transport, power, etc.
(c) Increases mobility of labours: Education helps the labourers to search for more rewarding employment opportunities all over the w7orld. It helps to choose a suitable career according to one’s educational qualifications. It makes them move from country to country or state to state as and when required.
(d) Creates national and developmental consciousness: Education creates civic, national and developmental consciousness among the literates. It provides information about the past events in history and tells about the freedom struggle of great national leaders like Mahatma Gandhi, Bhagath Singh, Subhas Chandra Bose and others. It makes people develop a sense of patriotism and helps them to adopt strategies of progress in life.
(e) Contributes to skilled and trained workers: Education generates a skilled and trained labour force needed for the development of the country. Education includes both general and technical education. The general education includes a Bachelor of Arts. Bachelor of Commerce, Bachelor in Business Administration, etc. at the degree level and technical education includes Bachelor in Engineering in different streams like mechanical, civil, electronic, electrical, computer, etc. All these contribute to the supply of skilled labour for the overall development of the country.
(f) Act as a source of knowledge: Education is a house of knowledge for all purposes. Any¬thing to know we need to be literate. It helps people to take decisions on the basis of their knowledge gained in different stages while getting an education.
(g) Develops moral values: As education provides a number of stories and incidents in people’s lives, people can definitely develop moral values. These moral values are included in their daily life. Some of the moral values are not to sell adulterated products, in the case of the seller and in the case of a buyer, not to create inconvenience for others in their routine life and so on.
(h) Creates awareness about culture and politics: Education always provides complete information about the cultural heritage of any nation. It explains how they are constructed with the investment of money and human capital. It helps them to preserve historical monuments, inscriptions and other valuable items. It also provides day-to-day information about politics when the person is literate.
Trace the relationship between human capital and economic growth.
It is a well, known fact that an educated person can create more income than an uneducated individual. There is a direct relation between Human Capital and Economic Growth in every country.
The term economic growth refers to an increase in the real national income of a country. The contribution of the educated person to economic growth is more than that of an uneducated person. As the economic growth includes the overall development of an economy in all the sectors, it is education that plays an eminent role in bringing transition from low productivity to higher productivity in any. economy.
As education increases the efficiency of labour, it results in innovations and improvements in the application of science and technology in the agriculture, industry and service sectors of the country.
The Government of India has recognized the importance of human capital in economic growth long ago. The T” five-year plan says that the human resources development (human capital) has necessarily to be assigned a key role in any development strategy, particularly a country7 with a large population.
The IBRD (International Bank for Reconstruction and Development) also known as World Bank, in its recent report ‘India and the Knowledge Economy-leveraging strengths and opportunities’ states that India should make a transition to the knowledge economy and if it uses its knowledge then the per capita income of India will increase from 1000 US dollars to 3000 US dollars by 2020.