CBSE Class 11 Economics Human Capital Formation In India

Question : What does AICTE stand for? ( Choose the correct option)
a) All India Council for Technology Education
b) All India Council for Technical Education
c) All India Commission for Technology Education
d) All India Commission for Technical Education
Answer: All India Commission for Technical Education

Question : Human capital is called an investment that brings_________. ( Choose the correct option)
a) Qualitative improvement in labour
b) Quantitative improvement in labour
c) Both
c) None
Answer: Qualitative improvement in labour

Question : Literate refers to___________. ( Choose the correct option)
a) Ability to read, write and understand any one language
b) All educated people working and producing goods or services
c) Ability to read and write any script
d) Ability to read, write and understand any one literature
Answer: Ability to read, write and understand any one language

Question :  ____________ is the stock of productive knowledge, skills, ethical and moral values, training and good health. ( Fill up the blank with correct answer)
Answer: Human Capital

Question : Which of the following is not the source of human capital formation? ( Choose the correct option)
a) Expenditure on medical facilities
b) On job Training
c) Migration
d) Brain Drain
Answer: D

Question : What is the Indian literacy rate?
Answer: 74.04%

Question : Which of the below-mentioned institution guides higher education?
a) NCERT
b) IGNOU
c) UGC
d) ICMR
Answer: UGC

Question : Whether the following statement is true or false?
Answer: The ministries of health at the union and state level, departments of health and various organisations like Indian Council for Medical Research (ICMR) facilitate institutions which come under the health sector‘. (T)

Question : Human capital is___________; it is endogenously built in the body and mind of its owner.(tangible / in tangible) ( Fill in the blank with correct alternative)
Answer: intangible

Question : Stocks and shares of the companies are known as______. ( Financial/Physical/Human) ( Fill up the blank with correct option)
Answer: Financial capital

Question : What is the name of the movement started by the national literacy mission?
Answer: The movement started by the national literacy mission is ‗Education for all‘.

Question : Whether the following statement is true or false? The Seventh Five Year Plan says, ―Human resources development (read human capital) has necessarily to be assigned a key role in any development strategy.
Answer: True

Question : What is human capital formation?
Answer: Human capital formation is the procedure of transforming the people in a nation into the workers who are capable of producing commodities and services.

Question : ______ and ______ are the twin pillars of economic development and social sector reforms.
a) Education and infrastructure
b) Education and health
c) Education and poverty
d) Education and employment
Answer: Education and health

Question : Deutsche Bank, a German bank, in its report on ‗Global Growth Centers‘ (published on 1.7.05) identified that India will emerge as one among four major growth centers in the world by the year 2020. Between 2005 and 2020 we expect a ________% rise in the average years of education in India, to just above 7 years...‖ ( Fill in the blank with correct answer)
Answer: 40 per cent

Question : __________ has the least literacy rate in India. ( Write the correct answer)
Answer: Bihar

Question : Which state in India has the highest literacy rate?
Answer: Kerala

Question : According to World Bank- ‗India should make a transition to the knowledge economy and if it uses its knowledge as much as _____________does. (England/ Ireland) ( Choose the correct option)
Answer: Ireland

Question : Identify the correct sequence of alternatives given in Column II by matching them with respective terms in Column I:
COLUMN I                                            COLUMN II
a) National Council of Educational          i) A statutory body for determination
Research and Training                              and maintenance of standards of higher education
b) University Grants Commission           ii) Apex body in India for coordination
                                                               and promotion of biomedical research
c) All India Council of Technical              iii) Autonomous organisation to promote, conduct educational
Education                                                  research and experiments the innovative ideas
d) Indian Council for Medical Research   iv) A statutory body that plan, coordinate and develop technical education in India.
Choose the correct option
a) iii, i, iv, ii
b) ii, i, iv, iii
c) iv, iii, ii, i
d) ii, iii, iv, i
Answer: A Q

Question : Tapas Majumdar Committee appointed by the government of India in 1998, aims at improving ___________________. ( Health/ Education/ Infrastructure) (Fill up the blank with correct option)
Answer: Education

Question : Identify the correct sequence of alternatives given in Column II by matching them with respective terms in Column I:
      COLUMN I                                                             COLUMN II
a) Education Commission recommended                        i) 2010
at least 6% of GDP to be spent on education.
b) Tapas Majumdar Committee recommended               ii) 2001
Rs. 1.37 lakh cr. Expenditure over 10 yearsto
bring all children (6-14 yrs) under school education
c) Enactment of ‗Right to Education Act‘ to make         iii)1998
free education to all children of 6 to 14 years of age.
d) Sarv Shiksha Abhiyan- Universalisation of                iv) 1964
elementary education
Choose the correct option
a) iii, i, iv, ii
b )ii, i, iv, iii
c) iv, iii, ii, i i
d) iv, iii, i, ii
Answer: C

Question : What are the two major sources of human capital in a country?
Answer: Investments in education and health are the two major sources of human capital.

Question : What are the indicators of educational achievement in a country?
Answer: Some of the indicators of educational achievement in a country are;
i) Gross Enrolment Ratio ( GER)
ii) Adult Literacy Rate (ALR)
iii) Primary education completion rate
iv) Literacy rate v)Net Attendance Ratio ( NAR)

Question : Why do we observe regional differences in educational attainment in India?
Answer: The per capita education expenditure differs from one state to another. In 2009-10, it was as high as Rs. 12,500 in Himachal Pradesh and as low as Rs. 2200 in Punjab. Disparity in per capita educational expenditure is the reason for regional differences in educational attainment in India. In 2014-15, the per capita public expenditure on elementary education differs considerably across states From as high as Rs 34,651 in Himachal Pradesh to as low as Rs 4088 in Bihar. This leads to differences in Educational opportunities and attainments across states.

Question : Bring out the differences between human capital and human development.
Answer: Human capital and human development may sound similar but there are differences between them. Human capital considers education and health as a means to increase labour productivity. Human development is based on idea that education and health are integral to human well being because only when the people have ability to read and write and can live a healthy and longer life, they will be in a better position to make choices. Human capital considers human beings as a means to an end. In this case, improved productivity is the end. Human development considers human beings as an end. From the perspective of human capital, if investment in education and health does not result in improved productivity then that investment is unproductive. Human development considers investment in health and education should be increased even if it does not result in apparent productivity.

Question : How is human development a broader term as compared to human capital?
Answer: Human capital looks at only one aspect, i.e. productivity of labour. Human development looks at various other aspects which encompass quality of life of individual and of society. Human capital looks at short term gains, while human development looks at long term gains. Hence, it is apparent that human development is a broader term as compared to human capital.

Question : What factors contribute to human capital formation?
Answer: i) Investment in education,
ii) Expenditure on health care
iii) on the job training,
iv) migration,
v) Awareness/ Information

Question : How government organisations facilitate the functioning of schools and hospitals in India?
Answer: The government organizations see to it that the private providers of these services adhere to certain standards and charge standard prices. Moreover, government institutions also facilitate opening and running of government owned educational institutions and hospitals so that the masses can be provided the benefits of these services.

NCERT: National Council of Educational Research and Training (1961): It is an autonomous organisation of the Government of India. (headquarters-New Delhi: Director: Hrushikesh Senapaty) The NCERT was established with the agenda to design and support a common system of education which is national in character and also enables and encourages the diverse culture across the country. Based on the recommendations of the Education Commission(1964-66), the first national policy statement on education was issued in 1968. The policy adopted of a uniform pattern of school education across country consisting of 10 years of general education program followed by 2 years of diversified schooling.
UGC: The University Grants Commission of India (UGC India) is a statutory body set up by the Government of India in accordance to the UGC Act 1956, and is charged with coordination, determination and maintenance of standards of higher education. It provides recognition to universities in India, and disbursements of funds to such recognised universities and colleges. Its headquarters is in New Delhi.
AICTE: The All India Council for Technical Education (AICTE- Established in November 1945) is the statutory body and a national-level council for technical education. 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.
ICMR: The Indian Council of Medical Research (ICMR), the apex body in India for the formulation, coordination and promotion of Biomedical Research, is one of the oldest and largest medical research bodies in the world. The ICMR is funded by the Government of India through the Department of Health Research, Ministry of Health and Family Welfare.

The council's research priorities coincide with National health priorities such as control and management of communicable diseases, fertility control, maternal and child health, nutrition, developing alternative strategies for health care, occupational health problems; research on major non communicable diseases like cancer, cardiovascular diseases, blindness, diabetes, mental health research and drug research (including traditional remedies). These efforts are undertaken with a view to reduce the total burden of disease and to promote health and well-being of the population

Question : Education is considered to be an important input for the development of a nation. How?
Answer: It is a fact that an educated person earns higher income than an uneducated manual labourer. In a factory, a shop-floor worker earns much less than people at managerial level and this difference is because of difference in skills and education. To understand it better, we can compare the situation in India with that in Ireland. It is said that Ireland is a country which uses its knowledge economy very efficiently. If India begins to use its knowledge economy as efficiently as Ireland does then its per capita income would improve from current level of $ 1,000 to $ 3,000 by 2020. This illustrates why education is considered to be an important input for the development of a nation.

Question : Discuss the following as a source of human capital formation
a. Health infrastructure
Answer: Investment on health infrastructure helps in making healthy citizens which can lead a long life. A healthy worker would be in a position to utilize maximum number of working days and hence his productivity would be better than an unhealthy worker. Thus, health infrastructure is an important source of human capital formation.
b. Expenditure on migration
Answer: People often migrate in search of better employment opportunities. Migration involves various costs. One of the costs involved in migration is the cost of travel. Another cost is the higher cost of living in a bigger place. Additionally, migration also involves psychological costs of settling in an alien cultural environment.

Question : Establish the need for acquiring information relating to health and education expenditure for the effective utilisation of human resources.
Answer: Information relating to health and education expenditure reveals many aspects. It shows relative number of people who can afford education and healthcare expenses and those who cannot. This figure can be utilized in deciding the current number of available human resources. This figure also helps in deciding about the section of the society which needs help from government agencies. Thus, information relating to health and education expenditure is essential for effective utilization of human resources.

Question : How does investment in human capital contribute to Economic Growth?
Answer: Human capital is a means to achieve and improve economic productivity. Investment in human capital means promoting Education and health sectors of the economy.
Investment in education:
i) Educational Qualification: It provides formal certificates and degrees of educational qualification which are minimum eligibility criteria to get a good job. ii)Provides skills: A person can acquire various skills which makes a person capable of performing their jobs efficiently. Communication skills, Decision making, scientific skills, analytical skills etc. It helps in preparing qualified and skilled human resources.
iii) Instils moral values: Education in real sense makes strong foundation of personality. It Strong character building is the base for economic development of the country. Investment in Health: i)Better Productivity: A healthy person has more concentration level. He can do more work in less time. Investment in health helps in preparing healthy human capital which can be better at productivity.
ii) Economic Growth: A better productivity of the human resources helps in economic growth of the nation. A productive contribution helps in increasing GDP and National Income of the country. iii)More innovative and creative: A healthy person is more innovative and creative which will improve he overall production in quantity and quality both. It improves overall quality of life.

Question : There is a downward trend in inequality world-wide with a rise in the average education levels‘. Comment.
Answer: Education opens new avenues of employment. It is beyond doubt that an educated person has better chances of landing a high paying job. Even if a person decides to become an entrepreneur, education level helps in doing a business in a better way. Throughout the world, education levels have risen over the years. This has resulted in participation of more people in the workforce. Rising number of women in the workforce can be a clear indicator of benefits which education can impart towards employability. In case of India, many sections of the society which were downtrodden and oppressed since ages have been able to improve their socio-economic status because of education. All these developments have helped in reducing the inequality between the rich and the poor.

Question : Examine the role of education in the economic development of a nation.
Answer: i) Educational Qualification: It provides formal certificates and degrees of educational qualification which are minimum eligibility criteria to get a good job.
ii) Provides skills: A person can acquire various skills which makes a person capable of performing their jobs efficiently. Communication skills, Decision making, scientific skills, analytical skills etc. It helps in preparing qualified and skilled human resources.
iii) Instils moral values: Education in real sense makes strong foundation of personality. It Strong character building is the base for economic development of the country.
iv) More innovative and creative: An educated person is innovative and creative which will improve he overall production in quantity and quality both. It improves overall quality of life.
v) Economic Growth: A better productivity of the human resources helps in economic growth of the nation. A productive contribution helps in increasing GDP and National Income of the country.

Question : Explain how investment in education stimulates economic growth.
Answer: If we carefully analyse the data given in this chapter, it is clear that literacy level has risen from about 17% in 1951 to 74.04% in 2010. During this period, life expectancy has increased and child mortality has reduced substantially. In view of these figures, it can be inferred that better education level has helped in achieving better quality of life and more productive workforce. Per capita income which was Rs. 5,700 in 1951 has risen to 38,000 in 2010 & 92,565 in 2019; a whopping growth of 400%. Per capita income is a good indicator of economic development of a nation. Hence, it can be said that education has an important role to play in the economic development of a nation.

Question : Bring out the need for on-the-job-training for a person.
Answer: On the job training is very important for any job. It involves training the person suitable skills which are relevant to the job. Responsibilities and challenges keep on changing in a job and hence, on the job training is a continuous process. By providing on the job training an organization ensures that the employee becomes more skillful and thus more productive.

Question : Discuss the need for promoting women‘s education in India.
Answer: Education among women needs to be promoted due to following reasons.
i) Less literacy among females: Literacy rate in India is 74.04% . literacy among females is 65.5 per cent whereas the literacy rate among males is 82.1 per cent in India.
ii) Patriarchal System of Society: India is a patriarchal society in which there is too much gender-based discrimination. Women‘s participation in economic development is required to be increased. As the example of developed nations show, greater participation of women in the workforce helps in economic growth of the nation
iii) Educated women are asset for the family: Most of the thinkers believe that educating a woman helps in educating the family and subsequently the society. Women‘s education is found to have positive effect on reducing the family size as it helps in reducing fertility.
iv) Better health Status of family: If the women are educated, can take care of health and hygiene of the family. She takes care of the balanced diet of the family members. She is well aware of the diseases and symptoms and help the family members to get rid of it.

Question : Argue in favour of the need for different forms of government intervention in education and health sectors.
Answer: i) Controlling Fee structure: Government must interfere to control the high fee charged by private hospitals and school, colleges.
ii) Controlling unethical practices: by implementation of laws strictly the unlawful activities in health and education must be controlled by the government.
iii) Control monopoly: But normal consumers usually do not have enough information about the institutions which provide these services. Private providers of these services often acquire the monopoly status.

Question : What are the main problems of human capital formation in India?
Answer: Some of the problems of human capital formation in India are discussed as follows.
i) Poverty: A large section of the population is so poor that is cannot afford even the basic education and healthcare facilities. Most of the people cannot afford to get treatment at super speciality hospitals. Similarly, most of the people cannot afford to get higher education.
ii) More burden of Government Finances: The government expenditure on education and healthcare has been increasing over the years but in terms of percentage of GDP it is not adequate.
iii) Increasing Population: Rising population is a burden on resources if the human beings are not educated and healthy. In fact they become liability.

Question : In your view, is it essential for the government to regulate the fee structure in education and health care institutions? If so, why?
Answer: Profit maximization is a major goal of most of the private institutions. More often than not, private institutions in education and healthcare sector indulge in exploitation of their consumers. As we know most of the people are not in a position to afford the expenses for these institutions. Moreover, education and healthcare not only provide benefit to the individual but to the whole society. Hence, it is essential for the government to regulate the fee structure in education and healthcare institutions. Extra Questions:

Question : Explain the importance of Information as a source of Human Capital formation?
Answer: i) Updated Knowledge: People spend to acquire information relating to the labour market and other markets like education and health. For example, people want to know the level of salaries associated with various types of jobs,
ii)Helps in Decision Making: It provides knowledge about educational institutions that whether they provide the right type of employable skills and at what cost. This information is necessary to make decisions regarding investments in human capital as well as for efficient utilisation of the acquired human capital stock.

Question : Who can work better—a sick person or a person with sound health?
OR
‘Health expenditure directly increases the supply of healthy labour force’. Explain the statement showing expenditure on health as an important source of human capital formation.
Answer: A sick labourer without access to medical facilities is compelled to abstain from work and there is loss of productivity. Hence, expenditure on health is an important source of human capital formation.

Question : How does government measures the expenditure on education?
Answer: Expenditure by the government is expressed in two ways
(i)as a percentage of total government expenditure- The percentage of education expenditure of total government expenditure‘ indicates the importance of education in the scheme of things before the govt.
(ii) as a percentage of Gross Domestic Product (GDP)- The percentage of education expenditure of GDP‘ expresses how much of our income is being committed to the development of education in the country.

Question : Analyse the Indian Government’s expenditure on education.
Education expenditure as percentage of total government expenditure:
Answer: i) Increase in Expenditure: During 1952-2014, education expenditure as percentage of total government expenditure increased from 7.92 to 15.7 and as percentage of GDP increased from 0.64 to 4.13.
Throughout this period the increase in education expenditure has not been uniform and there has been irregular rise and fall. To this if we include the private expenditure incurred by individuals and by philanthropic institutions, the total education expenditure should be much higher.
ii) Share of expenditure at different levels: Elementary education takes a major share of total education expenditure and the share of the higher education (institutions of higher learning like colleges, polytechnics and universities) is the least. Though, on an average, the government spends less on tertiary education,expenditure per student‘ in tertiary education is higher than that of elementary level. This does not mean that financial resources should be transferred from tertiary education to elementary education. As we expand school education, we need more teachers who are trained in the higher educational institutions; therefore, expenditure on all levels of education should be increased.
iii) Inadequate expenditure on education: One can understand the inadequacy of the expenditure on education if we compare it with the desired level of education expenditure as recommended by

Question : ‘School dropouts are giving way to child labour’. Discuss how this is a loss to human capital.
Answer: School drop outs refer to a situation when the children leave their studies after class V or VIII or after X classes. It is total wastage of resources. It is loss of human capital as the child is not studying later.