Objective Type Questions

person dnd hence the fo

is more than that of
an
uneducared

is consequently more. Kmeris abe to

*ne labour skill of
more income
an educated person

than the latter and his

contribunon
to
(Fill up the blank
with
genen
opportunes
n d nanon. Give reason correct on
educational

have stressed the need for expanding Similarly

. cOnOmists

into physical capital

like tactories, rly, it can
up the biank withalso
like land
Just d country can turn physical
resources

and doctors.
(FiH turn humg
resources like students into_ like engineers
rect
4. We need investment in human capital. Give reason.
onsw
(Fill up the blank with
.Investments in education convert human being5 into -
cored o
outeo
5. represents enhanced labour productivity
which is
future income
an acquired
source5.
ability and an
aniwer
outcome of deliberg
increase
decisions with an expectation that it will
(Fill
Ement

up the blank with

correc
7. Investment in education, health, on-the-job training; and are the sources of
huma. answe
formation. (Fill up the blank with correct
8, Individuals invest in education with the objective of: (Choose the correct answer
(a) increasing their future income.
aterng
(b) accelerating the development process.
(c) facilitating adaptation of new technologies.
(d) All of the above.
9. Like education, health is also considered important. Give reason.
10. EXpenditure on health is an important source of human capital formaion. gIve reason.

11. Match the following:

(a) Medical intervention during illness. () Preventive medicine
(6) Spread of health literacy (i) Curative medicine
(i) Social medicine
12. Firms will insist that the workers should work for a specinc period of time, arter their on-the-job training. Give
13. reason.
Expenditure regarding on-the-job training is a source of human capital formation as
(Complete the sentence!
4 is the reason for the rural-urban migration in India.
(Fill up the blank with correct
15. Technically qualified answer
persons, like engineers and doctors,
migrate to other countries because

16. In both cases- Rural-urban (Complete the sentence

the
migration and migrahon to other countries-involves
migrated places and cost of transport, higher cost of
17. (Fill up the blank with
living m
Expenditure on
migration is a source of human capital formation. Give correct answe
18. reason.
Expenditure incurred for acquiring informahon
capital formation. Give reason. relahng to the labour market and other markets is a source ot
19. The two nume
forms of capital formation are
20. Physical capital is
(Fil up the blank with
market, only
and can be
easily sold in the correct answE
the services of the human market. Human
capital are sold. capital is ;it is not sold in
the
otn
and (tangible/intangible)
along with many other l up the blanks with correct opo
migration, increase an individuals income factors ike
generating capacity. on-the-job training, job mation and
22. The enhanced
productivity of human beings or human market Wers
u p the blanks with correct onswe
a) contributes capital:
substanially towards increasing
(b) stimulates innovations. labour (Choose the correct alternanve
(c) creates ability to absorb
productivity.
new
(d) All of the above technologies.
23. The causality between human capital ànd
economic growth
Tun
independent reports on the indian economy, flows in either directions.
strength in in
recent Give reasons.
times, have identified
that India would grow due to

Fill up
d would
the
grow faster
blank with c o r e c ta n s w e

122

a pter 5- Human Capital Forma on n

 World Bank, in ts report, ndia and the knowledge Economy - Leveraging Strengths and opportunities, states that in
should make transinon to the knowledge economy and if it uses its knowledge as much as Ireland does, then the per capita
come of India will increase from a little over USS 1000 in 2002 to in 2020.
(Fil up the blank with corect answer)
Human capital considers ds a means to increase labour productivity.
26.
(Fil up the blank with correct answer
.is the outcome of investment in education, health, an-the-job training, migration and information.
up the blonk with correct onswer
(PI
28. Both private and puone insntuons exist in the education and health service markets in India because _
(Complete the sentence)

29. Government interventon is essential in the education and health service markets in India because
(Complete the sentence)

30. Match the following:

a) The percentage of educaion expenditure of total () expresses how much of our income is being committ

government expenditure, to the development of education in the country.

(b) The percentage of 'education expenditure of GDP i) indicates the importance of education in the scneme

ofthings before the government.

31. During 1952-2014, education expenditure as percentage of total government expenditure increased from .92o
and as percentage of GDP increased from 0.64 to (Fill up the blanks with correct answers)
True/False? Give reason.
32. During 1952-2014 the increase in education expenditure has been uniform.
takes a major share of total education expenditure and the share _is the least. (tertiary
3
(Fill
of up the blanks with correct options)
education/Elementary education)
Give reason.
34. Financial resources should be transferred from tertiary education to elementary education. True/False?
be spent education so as to
35. The education commission (1964-66) had recommended that at least of GDP on

make a notceable rate of growth in educational achievements. (Fill up the blank with correct answer)

of around
36. The Tapas Majumdar Committee, appointed by the government of India in 1998, estimated an expenditure
of 6-14 under
Over 10 years (1998-99 to 2005-07) to being all Indian children in the age group years
(Fl up the blank with correct answer)
the purview of school educanon.
to make tree education a fundamental right of all children in the
37. In 2009 the government of India enacted
(Fill up the blank with correct answer)
age group of 6-14 years.
males who studied graduation and above
38. As per NSSO data, in the year 2011-12, the rate of unemployment among youth
Their urban counterparts had relatively less level of unemployment of
in rural areas was
(FIl up the blanks with correct answers)

of the young rural female graduates are unemployed in 2011-12, as per NSSO data.
39 Nearly- (Fll up the blank with correct answer)
o f primary level educated youth in rural and urban areas were unemployed in 2011-12, as per
40. Only about.
the blank with correct answer
NSSO data. Filup
41. The government should increase allocanon for hißher educahon and als0 improve the standard of higher education
institutions. Give reasons.
42. The spread of education and health services across different sectors of society should be ensured s0 as to simultaneously

attain ana
(Fill up the blanks with correct answers)
43. In which year the Government of India enacted the Right to Education (RTE) Act? (Choose the correct alternative)

(a) 2007 (b) 2008

2009 2010
44. Which of the following is a major source of Human Capital Formation in a country? (Choose the correct alternative)

a) Expenditure on defence (b) Expenditure on subsidy

C) Expenditure on education (d) Expenditure on fertilizers

45. The government of India is leving a percent Education Cess on all the union taxes for spending on elementary
educaion. (Choose the correct alternative)

(a) 2 percent (6) 5 percent

(c) 10 percent (d) 12 percent

23
Andian Economic Development Xf -by Subhash Dey
 & Creat1ng
Type
ype Questio
Evaluating
HOTS Analysing,
reach
he 0o growth goal a s as recommmendedi
to
a few steps
has taken
he goverunment
of India your answer.
y or

the Education

D o o u agree
Commission, 1909.

with the given

statement?
G i v e valid
aiVE
Y
reasons
in support
3mar
to a
considerable exten ct to make
An given statement is correct
enacted
the Kignt
to
audt
the
Government of India of o-
4 yeas.
n009, children in the age group cesS on all Uninn.
undamental
right of all 2 per cent eduCtion
on

been started levying a cicmentary cducation,

of lIndia has also
on
o v e r n m e n t

has been
earmarked
for spending educatuon and
revenucs trom the education
cess
or higher new loan scheme
for the promotion
gOvernment also sanctions a large outlay
he
for stiudents to pursue higher
cducation.
4o or Di which is less than the
e 66% tar
about
education is only
OWEvCr,Still government expenditure on

1964.
the Education Commission
s
proposcd by
STgYying
a
positive developm
Q.2 The difference in literacy rates between males and females are narrowing
in India
women
s tmminemt."

"
gEnaer equity, stil the need
to promote education for
DO
you agree with the statement?
Give reasons in suPport of your answer
mark
b e t o r e , as revealed from the followine
is better than
Ans. The statement is correct. No
given
doubt the gender equity
data:
1990 2015
Adult Literacy Ratio
62 81
Male
38 65
Female
Still there is a need to promore women education in India due to of the tollowing reasons.

(i) To improve economic independence and social status of women

(Gi) Women education makes a favouralble impact on fertility rate and health care of women and children.
Therefore. we cannot be complacent about the upward movement in the literacy rares and we have miles to
in achieving cent per cent adult literacy.

Q.3 Critically appraise the growth of education sector in India during 1952-2014. marks
Ans. Critical Appraisal of the growth of education sector in India during 1952-2014:
(i) Inadecquate government expenditure on education: The Education Commission, 1964 had recommcn
that least 6 per cent of in the
at
GDP be spent education to make
on
noticeable rate of growtn so as a
educational achievements. The lapas Majumdar Committee, 1998
estimated an expenditurc around
1.37 lakh 10 years (1998-99 to
crore over
2006-07) of6-14 to
bring all Indian children in the age group
ycars under the purview of school education.

Investment in education systerm in India has been woeful failure. In 1952, we were
a ager ot
0.64% of our GDP on education that rose to
only 4.13% in 2014. This has fallen well
spending
arget
proposed by the Eaducation Commission (1964-66). Education nment short o
to expenditure percentage ot tota
expenditure increasecd from 7.92 15.7 during 1952-2014. Moreover, ei as
increac u

education expenditure has nor been unitorm and

there has been
throughout this period the

(ii) Higher education-a tew takeES: Elementary education takes irregular rise and fall.
and the share of higher education major share of total cducation expenditu a
(colleges, polytechnics and
The Indian education pyramid is
universities) is the least.
ducation level. steep,
Morcover, the evel lesser among
ot unemployment indicating
and lesser
educated hignc
numberyouths is the
of peopie
1 a t ithe
on

SSO data,
NSS in 2011-12, the rate of
rea
above in rural areas was 1
Per cent; and
unemployment among youth males who studied
in
urban areas, it was 16
Fa severely atect
per cent. T he mos

Chapter 5- Human Capital

 were young rural remale graduates as nearly 30
per cent of them are
about 3-6 per cent or prmary level educated unemployed. In contrast to
tt
youth in rural and urban areas were
the government should increase allocation for unemployed. nereoc 1

rducation instirutions, sO that

higher education and also
students improve the standard or higner
are
imparted employable skills in such institutions.
Regional difterences in cducational attainment: In 2014-15, the
lementary cducation ditffers capita public expenditure
per on

considerably across states from high as34,651 asin Himachal Pradesh

low as4,088 in Bihar. This leads to as
ditterences in educational
to

id Educational for all-still adistant

opportunities and attainments across Sted
drcam: Though literacy rates for both adults well youth have as as -

increased, still the absolute number of illiterates in India is much

independence.
as as Indias population was at the tume or

In 1950, when the Constitution of India was

passed, it was noted in the
Directive Principles of the Constitution
that the government should provide free and
within 10 ycars trom tne
compulsory education for all children up to the age of 14 years
commencement of the Constitution.
literacy by now.
Had we achieved this, we would have 1O00
 Self Assessment Test 5.1

Formation in India
Chapter 5: Human Capital
Time allowed: 1 hour
" Tne cducation commission (1964-66) had recommended that at least
Maximum Mark
bt GDP
cuucation so as to make a noticeable rate of growth in cducational achievements. be
(Fill up the blank with
correct
.2 n which year the Government of India enacted the Right to Education (RTE) Act? Answer) (|
(Choose the correct alter
(a) 2007 b) 2008 (\
n
(c) 2009
(d) 2010
Q3 The government of India is (ess all the union
leaving a percent Education on
taxes tor spend
clementary cducation. (Choose the correct
(a) 2 percent
(b) 5 percent allernative) (1
(c) 10 percent
(d) 12 percent

Q4
*
represents enhanced labour productivity which is an acquired abilty and an
outcome of dalL
nvestment decisions with of delibe
an expectation that it will increase future income sources.

(Fill up tihe blank wth correct

ansuer)(1 m
Q.5 Match the tollowing:
(a) The of
percentage 'education expenditure (i) expresses how much of our income is
being commi
o total government expenditure. to
the development ot cducation in the country.
(b) The
percentage ot 'cducation
expenditure | (i1) indicates the importance of education in
the scheme
GDP things betore the government.
Q.6 Empirical evidence to
prove that increase in human capital causes economic
Comment. growth is rather nebuou
murt
Q.7 Examine the role of education in the economic
development of a nation. (3 made
Q.8 What are the sources of human capital tormation? Explain any four.
(4 mur
Q9 How do the rwo
independent reports on the Indian economy, in recent times, have
identified that india4 maw
grow faster due to its strengtn in human
captal tormation? Explain.
Q.10 Criticaly appraise the growth of education sector in India
during 1952-2014. (6

a r m a t o n

126 Chapter 5- Human Capital

 Assessment
Test 5.2
self
Chapter 5: Human Capital Formation in India
allowed:
I hour
Time Maximum Marks: 25

2009 the governnent or India enacted

to make tree education a fundamental right of all
hildretn in the age group of 6-14 years.
(Fill up the blank with correct ansuwer) (I mark) |
and
Both. along with
many other factors like
armation and migration, increase on-the-job training, job market
an
individuals income
generating capacity
(Fill up the blanks with correct answers) (1 mark)
What are the two major sources Ot human
capital in a
country? mark)
04 Why do we observe regioal ditterences in educational attainment in India?
(1 mark)
05 Two independent reports on the Indian economy, in recent times, have identified that India would grow taster
due to its strength in
(Fill up the blank with correct answer) (1 mark)
06 What are the ditferent torms in which firms spend on giving on-the-job training to their workers: How is the
expenditure regarding on-the-job training a source of human capital formation. (3marks)
0.7 Education 15 sought not only as it confers higher carning capacity on people but also for its other highly valued
benefits. Examine the statement.
(3 marks)
Q8 What are the main problems of human capital formation in India?
(4 marks)
09 Education Commission 1964-66 had reconmmended that at least 6 per cent of GDP must be spent on education.
How far India has been able achieve the said
to
goal 4 marks)
Q.10 What is 'Human Capital? Explain the role of human capital in economic
development of country.
a

marks)

ndian omic
Economic De
Development XII by Subhash
Dey
127
 Self Assessment Test 5.3

Chapter 4: Poverty
Formation in India
Chapter 5: Human Capital
lime allowed: 1 hour 30 minutes

ot Jail Cost of Living?

Maximum Maka
was the first person to detine poverty in terms

"
(Choose the
correct
(a) Dadabai Naroji (b) V.K.R.V. Rao alternative) (1,
(c) Willian Digby (d) R.C. Desai

9.2 The approach to reduce poverty through specitic poverty alleviatiOn programmes has been initie
(Choose tihe correct niiated fon
alternativei
(a) Second Five Year (b) Third Five Year plan
plan
(c) Fifth Five Year (d) Seventh Five Year plan
plan
3 Name the programme initiated by the Central Government to help the clderly pcople and poor
and de
wonen.
* u p p o s e you are from a poor family and you wish to get help Irom the government to set upa petty shor
which scheme will
you apply tor assistance and wny: shop- U
Economists have stressed the neced for expanding educational opporrunitics in a nation. Give reason.
(
Q.6 is the outcome of investment in education, health, on-the-job training, migration
intormation. (Fill up thhe blank uwith correct
answer) (1 m
Q what are the indicators of educational achievement in a country:

Q.8 Is it correct to
say that poverry has shifted from rural to urban areas: Use the trends in
poverty ratio to
suppe
your answer.
(3 mat
Q.9 Explain the three self-employment programmes to alleviate poverty in India.
mat
Q.10 What is Human Capital? What are two major sources of human capital in a
country? (3 ma
Q.11 The third
approach
to
addressing poverty is to provide minimum basic amenities to the people. How
did t
public expenditure on social consumption needs help in improving people's living standard?
4 matk
Q.12 How can you understand the inadequacy ot the expenditure on education in India?
(4 ut
Q.13 Explain che role of human capital in economic
development. (4 mati
Q.14 Critically examine the three-dimensional approach to
poverty reduction by the government. (6 maki
Q.15 Critically appraise the growth of education sector in India during 1952-2014. (6 marl

Fomado
128
Chapter 5-Human L d p i t a l
 Check List to Objective Type Questions
1. cconomic growth
23. Highet income Causes
building ot level
high level of hum
2. As it accelerates the that
ecoomic
development prucess apital and
vicc-versa, is
high ot hunan
3. human capital causes growth ot income. capi
10poduce more hunan cupita lsay. doctors, 24. human capital tormation
engincers ..)
out of human tesources. 25. USS 3000
.human capital 26. education and health
6. human capital
27, FHuman capital tormation

8.
migration;
a)
intormation 28. cducation and nealth care services create both privar
increasing their future income. sOCal benetits

"
Also considered as an important input for the 29. Cxpenditures on
caducaton nd
nealtn make substanti
development of nation much a as as it Is long-term impact and they cannot be casily reversed.
development of an individua. important tor the

30. (a) - (i). (b) - (ii)

10. A petson with sound health can work
hand, sick labourers
withour access
better. On the other 31. 15.7: 4.13
to medical tacilitics 3.2. False: Throughour this
period, increase in
is
compelled to ahstain from
work and there is loss of
the cducation
productivity. Hence,
expenditure has not been unitorim and there has
been
expenditure on health is an important r e g u i a r Tise and tall.
source of human
capital tornation. 5.5. Elementary cducation; tertiary education
I.(a) (i1), (h) - (ii)
4. False: As
12.
Durng that time
we
expand elementary cducation (.e.
schol
period, it can recover the benetits of the education), we necd more teachers who
cnhanced are trained
productivity owing to the
training through
the erurn or Such expenditure in the fornm of enhanced tertiary cducation (i.C. higher educational institurions like
abour colleges and universities
etc.). T heretorc,
productivity is more than the cost of it. all levels ot cducation should be increasecd.
expenditure on
4. Jner
15.
nepioynent
of
35. 6 pcrcent
higher salaries that they may get in
l. such counties o. C1.37 lakh crore
psychic costs ot living in a
I/. The enhanced
sttang Soc10-eeurall up
sct
5 / . the Right to Education Act
carning in the new
plac outweigh the 38. 19
costs of per cent; 16
per cent
migration; tience. expenditure on mgration is 9. S0 per cent
also a source ot human capital torm1.ation.
0.
18. Because this intormation is
necessary to make
per cent
decisions 4. o that students
Cgarding investmcnts in human capital as well as for are
imparted employable skills in
efficient utilisation ot the
acquired human
nstituttons. such
capital stock.
cconotnic growth; cquity
19. physical capital and human capital .. (c)2009
20. tangible: intangible
44. (c)
21. cducation ; health
45. (a) 2
Expenditure on
education
22. (d) All ot the above percent
ng of Answers to 'SELF
high level. ASSESSMENT TESTS' Questions
high leve of evel of human selfAssessment Test 5.1
human This shows the apathy of the government towa
capita oecnt
2009

4.humancapital
e s t i e n t ii the education system. Une can
the recommcnded 6% p.a, of the GDP would
(1
have been
(b cducation systeini woud nave
()
ofHuman apital Formation:
Peproperiy the present
reached untoreseen heignts.
10.
es
create both dvcstnsnu iLcuu
iiaduals increase their stents
future income. cducation by
An cducated
in
Human CGapital' represents enhanccd productivity of
uman beings. for example, human esources becoming
private and person like an c n g e e r a dOctor carns more than a
and doctors through investments in cducation.
health make a
tactory worker.
engineers
illietate peron. cg. Obviously, the labour skills of an cducared person is more
pt
easily revetsed. antial
casily Inesncns o n wih souncl health can than that ot an uneducated person and hence the former
work better a d carn Ore. ck abourer, without access contributes more to national income than the latter.
o madical tacilities s compeilad to abstaun from work and
he Exonomic growth mcans the increase in rcal national mcome
increase in there is ks ot proxductuviry tHence, cxpenditure on health is or a country. Naturaly, an cducated person contributes more
rm and there cducation
has t
an important S u r e or nunan apital tormation.
to Cconomic growth. Economists have stressed the necd

cation
Dcen (ii) Expcnditeg n00 Anng is a for expanding cducational opportunities in a nation as i

spure ot numau cuitu tormation as the return of accelerates the conomic development process.
cducation (i.e. school
who are
such expenditure in the torm of cnhanced labour
productivity 1s more than cost of it.
Education provides knowledge to
understand change
in society and scientific advancements, thus, facilitate
rained
through
cational institutions iv) Eapcnditure on higation is als a source of human mventions and innovations.

erctore. expenditure onike apital tornation becuse tne chhanced earnings in Similarly, the availability of cducated labour torce
Ereased. TAcilitates adaptation
the new place ngner slaries) ourweigh the costs of to ncw
technologies.
migtation (higher cost ot living) fndia recognised the importance ot human capital in

Two independent reports on the Indian economy have conomicgrowth long ago. The Seventh Five plan says, Year
dentificd that India would grow faster due to its strength "Human resources development (human capital) must be
Key rolc in any development strategY Irained and
n human capital tormatio. Sgic a
cducated population can itselt become an asset in accelerating
i) Deutsche bans, a_ uerman bank, in s report on
cconomic growth.
'Global Growthcntres published on 1.7.2005)
identificd that India will emerge as one among four
The growth ot human capital (cdlucation and heauth) and
loyable skills in
such major grovwtn centreS in the world by thC year 2020. economic growth nave taken
place simultancously., s

shown belaow:
() Worid 5ank, in its report. "Tndia and the knowledge
Select Indicators of Development in
Economy Leveraging strengths and opportunities
states thar India should make a rransition to the Education and Health Sectors
knowledge economy and it it uses its knowlcdge Particulars 1951991 2015-16 |
much as 1seland does, then the per capita income
RealPer Capita Income (R|7651 5,748 77805
of India will increase from a little over USs 1000 in Literacy Rate (6) 16.6752,21 76
2002 to USS S000 in 2020. Indian cconomy has all Lite Expectancy (yeas
77
the key ingrcdients tor making this transition, such Male . 9./

as, a critical mass of skilled workers and, a diversified Female b0.9

science and technology intrastructure. Self Assessment Test 5.3

1. (a) Dadabai Naroji 2. (6) Third Five Year
elt Assessment Test 5.2
3. National Social Assistance Progtamme
pla
Education Act
the Right to
4. Prime NMinisrers Rozgar Yojna (PMRY) as it provides
cducation; health financial help to the educated unemployed trom low
nvestment in education and health education ditters income tamilies tor setting up
DEcalUse per capita public expenditure
on

considerably across states. 5. As it accelerates the economic development proccss

human capital tormation 6. Human capital tormation
Etient in education system in ndia has been a woctul ( 0 Adult hteracy rate () Primary cducation completion

taulure. The fact of the matter is that, in 1992 we rare (il) Youth literacy rate
P n g a meager 0,6o of our GDP on cducation that
were o. Tuan apital represents cnhanced labour productivity,

well short or which is an acquired ability arid an outcome of deliberare

Ose to
only 4% in 2014. This has tallen
Commission, investment decisions with an expcctation thar it will increase
get as
proposed by the Education
the in future income sources and contrbute to cconomic growth.
o4. Moreover, throughout this period increase nvestments in cducation and investments in health are
Cpenditure has not been unitorm and there has
sources of human in
Deen
itregular fise and fall.
wo major capital a
country.
rormation in India Indian
onomic Development XII by Subhash Dey