Economics As A Social Science:

Exam Practice 1
a) A positive statement is an objective and fact-based statement that can be proven or
disproved. In contrast, a normative statement is subjective and opinion-oriented. An
example of a positive statement from the excerpt would be ‘India’s current spending
of 3.83 per cent of it’s gross domestic product (GDP) on education was not sufficient
to catch up.’ This statement is a fact that can be proven or disproved. An example of a
normative statement would be ‘If India increases its spending on education, it could
become a major supplier of skilled and qualified workers to the rest of the world.’
because this statement is a value judgement and cannot be supported or refuted.

b) India has a population of 1.3 billion people, 47% of which are children. (315 million
students.) The country has ambitions to improve their education system, however
their spending of only 3.83 percent of their gross domestic product is insufficient to
reach their goal. However, if they were to match their spendings in education with
western countries such as the UK and USA, their economy would improve.

There is a massive demand for skilled and qualified workers in India, and if those jobs
were filled then steady wages would greatly increase consumption of goods and
participation in the economy. (Such as investing, entrepreneurship.) With skilled
workers and more potential for consumption, businesses would open and become
competitive, possibly attracting foreign firms which would greatly benefit gross
domestic product and tax revenues.

However, there are many drawbacks. First of all, there is already a lack of teachers in
India, and many teachers are underqualified for their jobs. Educating and training
teachers would cost a lot of money, therefore that would have to be the first step in
improving education. Another obstacle would be the lack of infrastructure that
facilitated the commute to schools. If money is dedicated to education, then funding
in other sectors would be the opportunity cost. The benefit of funding other sectors
would be mostly lost to the funding of education, and India has a prominent lack of
infrastructure. If there aren’t sufficient pedestrian friendly roads and public
transportation, then rural areas wouldn’t share the benefits of the education system
as urban areas would.

I think measures could take up to a decade to take effect in overall society and the
economy, especially considering the lack of teachers and infrastructure. Despite this,
the higher funding of the education system would prove to be a significant advantage
for India’s economy, specifically concerning a possible influx of foreign companies
and more skilled workers.