Human Capital Formation in India

Education in India

Education is a very important factor in the economic development of any country. India since the early days of independence has always focused on improving the literacy rate in our country. Even today the government runs many programs to promote Primary and Higher Education in India. Let us study more about them.

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Human Capital

Human Capital and Economic Growth stay hand in hand together, keeping an eye on the development of the country. Long back the Indians recognized the importance of human capital. The seventh five-year plan dictates, “Human resources development has necessarily to be assigned a key role in any development strategy, particularly in a country with a large population”.

Looking at the below-mentioned points, one can certainly say that both, human capital and economic growth are interdependent on each other.

  • Skilled and specialized workers can handle complex machines or techniques, which unskilled workers cannot. This human capital increases the productivity of physical capital. This increases productivity and hence increased production leads to economic growth.
  • New methods of production can be introduced by innovative human capital and these facilitate an increase of production and economic growth in the form of an increase in GDP.
  • A higher rate of participation of human capital and equality amongst them leads to higher employment rate. As the employment increases there will be a rise in production. Also, the standard of living increases by an increase in income and increase in employment opportunities helps in reducing inequalities of wealth. The increment in employment rate and reduction in income inequalities are indicators of economic development.
  • A positive picture of the society can be depicted when the process of human capital formation goes in right direction. All the conventional and orthodox school of thoughts gets eradicated and hence the rate of participation in the workforce increases the production level.

Education in India

Education in India means the process of teaching, learning, and training of human capital in schools and colleges. This improves and increases knowledge and results in skill development hence enhancing the quality of the human capital. Our government has always valued the importance of education in India and this is reflected in our economic policies.

Growth in Government Expenditure on Education

There are two areas where government expresses there expenditure.

  • As a percentage of total government expenditure.
  • As a percentage of Gross Domestic Product (GDP).

The percentage of expenditure on education out of total government expenditure is the indicator of the importance of education in the scheme of expenses before the government. The commitment level towards the development of education in our country can be shown by the percentage of expenditure done on education out of total GDP.

During 1952-2010, the percentage of total education expenditure out of total government expenditure increased from 7.92% to 11.10%. At the same time, the percentage of GDP of the country increased from 0.64% to 3.25%. As the expenditure on education was not constant during that time, the growth of country was irregular in that era.

Expenditure on Elementary Education in India

In comparison to expenditure done on elementary education and higher education, the major share was grabbed by elementary education. On the contrary, expenditure per student on higher education was higher than that of elementary education.

As the expansion of school education is going on, we need more trained teachers who have studied at educational institutes. Therefore, expenditure on all levels of education should increase. Himachal Pradesh spends Rs. 2005 as per capita education expenditure as compared to Bihar which spends Rs. 515. This results in differences of educational opportunities between states.

Free and Compulsory Education

Education In India(Source: Law Times Journal)

The education commission (1964-66) recommended that at least 6% of GDP should be spent on education to make a recognizable growth rate in education. In December 2002, the government of India, through its 86th amendment of the Constitution of India, declared for free and compulsory education as a fundamental right to all children in the age group of 6-14 years.

The Tapas Majumdar Committee was appointed by the government of India in the year 1998. The committee estimated an expenditure of Rs. 1.37 Lakh crore (approx) for 1998-99 to 2006-07, to cater all Indian children of 6-14 years age group, under the umbrella of school education.

Currently, the expenditure is around 4%, which has to be increased to 6% to reach desired results in years to come. Government levies education cess at the rate of 2% on all union taxes. The revenues from education cess will be earmarked for spending on elementary education.

Educational Achievement in India

Barometers of educational achievement in a country are:

  • Adult literacy level
  • Primary education completion rate
  • Youth literacy rate
PARTICULARS Gender 1990 (%) 2000 (%) 2005-10 (%)
Adult Literacy Rate Male 61.90 68.4 76.7
Female 37.9 45.4 54.9
Primary Completion Rate Male 78 85 96
Female 61 69 95
Youth Literacy Rate Male 76.6 79.7 88
Female 54.2 64.8 74

Future Prospects

Indian government considers education as a key area where drastic growth and development is required. So various future prospects have been considered and policies are drafted. The vision is to ensure that education in India is of the highest quality and available to the whole population without discrimination. Let us look at some projects the government wishes to implement successfully.

1. Education for all – A Dream

Though the education level has increased for both youth as well as adults, still the number of illiterates is as much as the population was at the time of independence. The constituent assembly passed the Constitution of India in the year 1950. Free and compulsory education for the children till 14 years of age within 10 years from the commencement of constitution was noted as Directive Principal of the constitution. Following are the factors which make education for all a dream:

  • Gender bias
  • Low rural access
  • Increasing number of illiterates
  • Privatization
  • Low expenditure on education by government

2. Improving Gender Equity

The differences between male and female are reducing and the same can be seen in literacy rate, showcasing a development in gender equity. Still, hard work left to promote the education of women. There are various reasons, such as:

  • The social status of women
  • Healthcare of women and children
  • Improving economic independence

Therefore, we cannot feel satisfied with the upward movement in literacy rate as long miles to go for gender equity. Kerala, Mizoram, Goa and New Delhi are having high literacy rate, whereas, Bihar, Uttar Pradesh, Arunachal Pradesh and Rajasthan are educationally backward states. Social and Economic Poverty are main reasons for educational backwardness.

3. Higher Education

People in India face great difficulty to reach the higher levels in the current education system. As per National Sample Survey Organization data, in the FY 2007-08, the unemployment rate was 18.10% for youth with education up to secondary level. Whereas unemployment rate for youth with education up to primary level was only 11.60%. The government should take emphasis on allocation of higher education and improve the students.

Solved Question for You

Q1. What is Education? What are its objectives?

Solution: Education In India mean, the process of teaching, learning and training of human capital in schools and colleges. This improves and increases knowledge and results in skill development. Objectives of Education

  • Development of Science and Technology.
  • Use of natural resources and human capital in all regions of the country.
  • It elaborates the human thinking and level of thought process increases.

All above produces good citizens.

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