Human capital formation holds a central role in India’s economic growth, as emphasized in the Seventh Five Year Plan. The plan underscores the pivotal role of human resources development, stating that a well-educated and trained large population can serve as a significant asset in accelerating economic growth and steering social change in desired directions. Expenditures on education and health are undertaken by various levels of government, including the Union Government, State Government, and Local Governments.
In India, the education sector is regulated by ministries of education at the Centre and State levels, along with organizations such as the National Council of Educational Research and Training (NCERT), University Grants Commission (UGC), and All India Council of Technical Education (AICTE). Similarly, the health sector is overseen by ministries of health at the Union and State levels, along with entities like the Indian Council for Medical Research (ICMR).
Empirical evidence supports the notion that India’s strength in human capital formation will contribute to faster economic growth. Deutsche Bank’s report on ‘Global Growth Centres’ predicts India to be among the four major growth centers globally by 2020, emphasizing the crucial role of human capital as the most important factor of production. The report anticipates a 40% increase in the average years of education in India between 2005 and 2020.
The World Bank, in its report on ‘India and the Knowledge Economy,’ suggests that India should transition to a knowledge-based economy. Drawing parallels with Ireland’s effective use of its knowledge economy, the report posits that if India maximizes its knowledge utilization, per capita income could rise from just over US $1000 in 2002 to US $3000 in 2020. India’s strengths in this transition include a skilled workforce, a well-functioning democracy, and a diverse science and technology infrastructure. Examples of this shift include the adoption of e-governance and e-trade in the country.
Objective Type Questions
1. According to the Seventh Five Year Plan, why is human capital considered a significant asset for India’s economic growth?
a) It increases bureaucracy
b) It accelerates economic growth and promotes social change
c) It reduces government expenditures
Answer: b) It accelerates economic growth and promotes social change
2. Which government levels in India are responsible for expenditures on education and health?
a) Union Government only
b) State Government only
c) Union Government, State Government, and Local Governments
Answer: c) Union Government, State Government, and Local Governments
3. Who regulates the education sector in India according to the provided information?
a) National Council of Educational Research and Training (NCERT)
b) Deutsche Bank
c) Indian Council for Medical Research (ICMR)
Answer: a) National Council of Educational Research and Training (NCERT)
4. What does Deutsche Bank’s report on ‘Global Growth Centres’ predict about India by 2020?
a) Decline in economic growth
b) India becoming a major growth center
c) Reduction in average years of education
Answer: b) India becoming a major growth center
5. According to the World Bank’s report, what is essential for India to transition to a knowledge-based economy?
a) Increased bureaucracy
b) Maximizing knowledge utilization
c) Reducing expenditures on education
Answer: b) Maximizing knowledge utilization
6. What is the anticipated increase in the average years of education in India, as per Deutsche Bank’s report?
a) 10%
b) 20%
c) 40%
Answer: c) 40%
7. What are considered strengths for India in transitioning to a knowledge-based economy?
a) Lack of skilled workforce
b) Poorly functioning democracy
c) Skilled workforce, well-functioning democracy, and diverse science and technology infrastructure
Answer: c) Skilled workforce, well-functioning democracy, and diverse science and technology infrastructure
8. What are examples of India’s transition to a knowledge-based economy mentioned in the provided information?
a) Adoption of traditional governance
b) Adoption of e-governance and e-trade
c) Reduction in health sector regulations
Answer: b) Adoption of e-governance and e-trade