HUMAN CAPITAL FORMATION

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R.S. SAINI

PGT-ECONOMICS

PM SHRI K. V. SILCHAR

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MEANING:

• Human capital formation implies the additions to the stock of abilities and skills among the population of the country.

EXPENDITURE ON EDUCATION

SOURCES

EXPENDITURE ON HEALTH

ON JOB TRAINING

MIGRATION

INFORMAT ION

EXPENDITURE ON EDUCATION

Objectives

• Increase in future income
• Better social standing and pride
• Better choices in life
• Understanding of social changes
• Stimulates innovations

EXPENDITURE ON HEALTH

Objectives

• More production due to good health
• Regular work more output

ON JOB TRAINING

On job training

Within firm

Off campus training

Benefit –increased productivity

EXPENDITURE ON MIGRATION

Types of migration

Rural to urban

International

migration

EXPENDITURE ON MIGRATION

Involves cost of

Higher living

Socio culture change

Psychic cost

Transportation

EXPENDITURE ON INFORMATION

• Information regarding labour market
• Information regarding salaries related to various jobs

PHYSICAL CAPITAL V/S HUMAN CAPITAL

ROLE OF HUMAN CAPITAL FORMATION IN ECONOMIC DEVELOPMENT

• Increase in production(GDP)
• Increase in productivity and efficiency
• Change in outlook and attitude
• Stimulates inventions and innovations
• Increase in life expectancy
• Higher rate of participation
• Adoption of new technology

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IMPORTANCE OF HUMAN CAPITAL IN INDIA

• India recognised the importance of human capital in economic growth long ago.
• 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 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.”

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PROBLEMS RELATED TO HUMAN CAPITAL FORMATION

• Rising population
• Migration(brain drain)
• Lack of proper man power planning(imbalance between demand and supply of labour)
• Low level of academic standard(mismatch between required and actual academic level)
• Poverty
• Widespread inefficiencies(lack of on job training, eradication of poverty ,unemployment, illiteracy)

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STATE OF HUMAN CAPITAL FORMATION IN

INDIA(govt responsibility)

• Responsibilityof all levels of government expenditures on both education and health are to be carried out simultaneously by all the three tiers of the government.
• Existence of public and private sector education and health care services create both private and social benefits and this is the reason for the existence of both private and public institutions in the education and health service markets.
• Long term impact Expenditures on education and health make substantial long-term impact.
• Free health care and education for socially oppressed class basic education and health care is considered as a right of the citizens, then it is essential that the government should provide education and health services free of cost for the deserving citizens.

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Different institutions of health and education in India

• National Council of Educational Research and Training (NCERT),
• University Grants Commission (UGC)
• All India Council of Technical Education (AICTE)facilitate institutions which come under the education sector
• National Medical Commission and Indian Council for Medical Research (ICMR)facilitate institutions which come under the health sector.

The National Council of Educational Research and Training (NCERT)

It is an autonomous organisation setup in 1961 by the Government of India to assist and advise the Central and State Governments on policies and programmes for qualitative improvement in school education. Major objectives of the NCERT and its constituent units are to:

• Undertake, aid, promote and coordinate research in areas related to school education;
• Prepare and publish model textbooks, supplementary material, newsletters, journals and other related literature;
• Organize pre-service and in-service training of teachers;
• Develop and disseminate innovative educational techniques and practices;

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• Collaborate and network with state educational departments, universities, NGOs and other educational institutions;
• Act as a clearing house for ideas and information in matters related to school education;
• Act as a nodal agency for achieving goals of universalisation of elementary education. In addition to research, development, training, extension, publication and dissemination activities, the NCERT is an implementation agency for bilateral cultural exchange programmes with other countries in the field of school education.
• The NCERT also interacts and works in collaboration with the international organisations, visiting foreign delegations and offers various training facilities to educational personnel from developing countries.

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University Grants Commission (UGC)

• The UGC has the unique distinction of being the only grant-giving agency in the country which has been vested with two responsibilities: that of providing funds and that of coordination, determination and maintenance of standards in institutions of higher education.
• The UGC’s mandate includes:
• Promoting and coordinating university education.
• Determining and maintaining standards of teaching, examination and research in universities.
• Framing regulations on minimum standards of education.
• Monitoring developments in the field of collegiate and university education; disbursing grants to the universities and colleges.
• Serving as a vital link between the Union and State governments and institutions of higher learning.
• Advising the Central and State governments on the measures necessary for the improvement of university education.

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All India Council of Technical Education (AICTE)

• The All India Council for Technical Education (AICTE) is the statutory body and a national-level council for technical education, under Department of Higher Education, Ministry of Human Resource Development
• Established in November 1945 first as an advisory body and later on in 1987 given statutory status by an Act of Parliament, AICTE is responsible for proper planning and coordinated development of the technical education and management education system in India. The AICTE accredits postgraduate and graduate programs under specific categories at Indian institutions as per its charter.

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National Medical Commission and Indian Council for Medical Research (ICMR)

The council performs research on and control and management of communicable diseases, fertility, maternal and child health, nutritional disorders, health care delivery (including the development of alternative strategies), environmental and occupational health problems; major non-communicable diseases such as cancer, cardiovascular diseases, blindness, diabetes and other metabolic and hematological disorders; mental health; and drugs.

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ROLE OF GOVERNMENT IN HUMAN CAPITAL FORMATION IN INDIA

• Education and health care is responsibility of all three levels of government because
• Long term impact
• Existence of monopoly power and exploitation by private sector
• Ensures proper quality and correct price by private providers
• Lack of proper health care and basic education for BPL people
• Education and health care are basic rights of citizens
• Essential to provide free services to socially oppressed classes.

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GROWTH IN GOVERNMENT EXPENDITURE ON EDUCATION

• Education is a wider term than literacy
• Education is the process of gaining knowledge and developing necessary skills to participate in the growth process of the country
• Government expenditure on education
• It is expressed in two terms
• As a percent of total expenditure: it refers to importance given to education in government plans
• As a percent of GDP: how much of national income is committed to GDP

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Educational achievement in India

Challenges in education

• High illiteracy rate
• Gender bias
• Lack of vocational training
• Low standard of education
• Insufficient government expenditure
• Privatisation of education
• Low access level for rural people

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Future prospects

• Education for all –still a distant dream
• though literacy rate has increased but absolute no. of illiterates is still high
• DPSP directs the state to provide free and compulsory education to children up to 14 within 10 years ,but still not achieved 100%
• Gender equity better than before
• Female literacy has improved
• Positive development towards gender equity
• Women education makes favourable impact on fertility rate and health care of children
• still we need to promote women education for economic independence and social status of women.
• Higher education –a few taker
• Lesser No. of people reaching higher level
• Unemployment among the youth is high
• Allocation towards higher education should be increased

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THANK YOU