In the past few decades, the importance of Human Capital is widely accepted by everyone. Governments around the globe are determined to further enhance and develop the same and to ripe the fruit of higher development and growth. With this post, I will try to make you all aware of this new concept of Human capital and will look into developments in India.
Human capital can be understood as the economic benefit that can be culminated by imparting Education, Health, etc. It is the measuring criteria of one's skills, capacity, and different qualities of labor which affects the earning potential and productive capabilities.
Like any other capital, it also has a variety of sources like education, health, job training, and migration. We will be mainly discussing education as a source of human capital.
Education plays a vital role in improving and bettering human capital. As well-educated labor will contribute more than uneducated labor, keeping in mind the same Indian government is also trying to increase its expenditure, and the share of education has grown from .5% in the 1960s to above 4% today.
Still, we failed to achieve cent percent literacy rate. In the past various committees have suggested more investment in education by increasing its share in GDP to 6%, but our government has failed in achieving it. After the seventh Five Year Plan, there are some efforts from the side of government to capitalize on the same this can be traced to the fact that the government has enacted a law giving education as a fundamental right of children below 14. But even after this, the percentage of illiterates in rural areas and among the distressed classes of society is very less. In urban areas, it can be said good.
According to various global surveys, India has a vast power of human capital. Surveys also stated that if India invests more in human capital its growth will reflect heavily on economic growth. It also stated that the average income will also increase from $1000 in 2001 to $3000 by 2020.
Keeping in mind the importance of human capital and its impact on economic growth, steps taken by the Indian government is not sufficient and there is a huge need for target-oriented policies to extract significantly from the Human capital.
UPSC
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