Human Capital Formation In India — Economics STD 12 Humanities & Commerce — Question
Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsHuman Capital Formation In India6 Marks
Question
"As physical capital is essential for economic development so is human capital." Explain.
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Answer
Physical capital such as machines, building, etc. are important for economic growth. For economic development, human capital also plays an important role as follows:
When existing human resource is further developed by becoming more educated and healthy, human capital formation takes place. This adds to the productive power of the country by increasing the efficiency of the workers.
Investment in human capital formation yields higher returns in future by yielding larger output.
It improves the social outlook of the workers and helps to increase mobility of labour.
It raises the standard of living of people by increasing their incomes.
The society gains in many indirect ways because the advantages of a more educated or a healthier population spreads to those also who themselves are not directly educated or given health care.
Higher productivity raises the rate of participation which results in high degree of economic and social equality.
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