Section A

Each question carries 1 mark:

1. Following is the source of human capital formation:
a) Investment in education
b) Investment in health
c) Expenditure on the job training
d) All the above

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2. Which of the following organisations functions as an apex organisation to provide quality
school education?
a) University Grants Commission
b) All India Council of Technical Education

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c) National Council of Educational Research and Training
d) Ministry of Education at the central level
3. In India, which of the following organisation regulates the standard for higher education?
a) ICMR
b) UGC
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c) AICTE
d) None of these
4. Which of the following regulates the technical education of the country?
a) NCERT
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b) ICMR
c) AICTE
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d) UGC
5. What are the two major sources of human capital formation in a country?
Two major sources of human capital formation in a country are :
a) Expenditure on education and
b) Expenditure on health.
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6. Which of the following is not true about human capital?

a) Depreciation in human capital can be reduced through continuous investment in
education and health
b) It is tangible
c) It is inseparable from its owner
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d) It is not perfectly mobile between countries.

7. When did RTE Act become operational?
a) 2005
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b) 2008
c) 2010
d) 2011
8. Which of the following is not a source of human capital formation?

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 a) Expenditure on education
b) Expenditure on migration
c) Expenditure on On-the-job training
d) Expenditure on subsidy
9. The stock of skill, ability, expertise, education and knowledge embodied in the people of a
country is called .
a) Human Capital formation
b) Physical capital
c) Human Capital

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d) Financial Capital
10. Which of the following are indicators of HDI?
a) Educational attainment
b) Standard of living

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c) Longevity
d) All of these
11. Why was educational cess imposed by the government on all union taxes?
Educational cess of 2 percent has been imposed by the government on all union taxes so that the
revenue generated by the government from this provision can be spent on financing elementary
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education.
12. When do people become resource?
When people acquire ability and skills to contribute to the creation of GDP, they become
resource.
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13. What is meant by on the job training?

Firms give on-the-job- training to enhance the productive skills of the workers so as to enable them
to absorb new technologies and modern ideas. Firms spend on giving on-the job-training to their
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workers. This may take different forms: one, the workers may be trained in the firm itself under the
supervision of a skilled worker; two, the workers may be sent for off-campus training.
14. Match the following
a) Expenditure regarding on-the-job training 4) Leads to enhanced productivity
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b) Expenditure on migration 2) Leads to enhanced learning in the new

place
c) Expenditure as a percentage of GDP 1) Income committed to the
development of education
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d) Expenditure on education measured as a 3) Importance of education in the

percentage of total government expenditure scheme of things before government
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15. Unemployment is the reason for rural-urban migration in India.

16. India recognised the importance of human capital in economic growth in which Five Year
Plan?
a) First
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 b) Tenth
c) Seventh
d) Second
17. ____________ treats human beings as a means to an end.
a) Human development
b) Human growth
c) Physical capital
d) Human capital

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18. Identify the incorrect statement from the following:
a) Human capital represents enhanced labour productivity.
b) Investment in human capital enhances efficiency and skills, implying economic
growth.
c) Human capital is separable from its owner.

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d) Human capital treats human being as a means to an end.
19. Which of the following statement is not false?
a) Higher education takes a major share of total educational expenditure in India.
b) No education cess has been imposed by the Government of India.
c) Educational achievements in a country are indicated in terms of adult literacy
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level only.
d) Expenditure per student at Tertiary level is higher than that of elementary level
of education.
20. The labour skill of an educated person more than that of an uneducated person. Explain.
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The labour skill of an educated person is more than that of an uneducated person and hence the
former is able to generate more income than the latter and his contribution to economic growth is,
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consequently, more.
21. Read the following statements –Assertion (A) and Reasons (R),choose the correct alternatives
Assertion (A):In developing countries, growth of human capital has been faster than the
growth of per capita real income.
Reason (R): Empirical evidence to prove that increase in human capital causes economic
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growth is rather nebulous.

a) Both (A) & (R) are true and (R) is correct explanation of (A).
b) Both (A) & (R) are true and (R) is not correct explanation of (A).
c) (A) is true but (R) is false.
d) (A) is false but (R) is true.
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22. Read the following statements: Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
Assertion (A): Expenditure on migration is a source of human capital formation.
Reason (R): Migration to other countries involves the cost from one place to another and
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the higher cost of living in the migrated places.

a) Both (A) & (R) are true and (R) is correct explanation of (A).
b) Both (A) & (R) are true and (R) is not correct explanation of (A).
c) (A) is true but (R) is false.
d) (A) is false but (R) is true.
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23. Read the following statements: Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
Assertion (A): The facilities for the formation of human capital have remained adequate.
Reason (R): The resources allocated to human capital formation have been much less
than the resources required.
a) Both (A) & (R) are true and (R) is correct explanation of (A).
b) Both (A) & (R) are true and (R) is not correct explanation of (A).
c) (A) is true but (R) is false.
d) (A) is false but (R) is true.

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24. Read the following statements: Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
Assertion (A): The spread of education is necessary to control the population growth rate.
Reason (R): Human Capital Formation decreases the quality of life.
a) Both (A) & (R) are true and (R) is correct explanation of (A).

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b) Both (A) & (R) are true and (R) is not correct explanation of (A).
c) (A) is true but (R) is false.
d) (A) is false but (R) is true.
25. Read the following statements:Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
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Assertion (A): Education contributes to economic growth.
Reason (R): Education confers higher earning capacity on people.
a) Both (A) & (R) are true and (R) is correct explanation of (A).
b) Both (A) & (R) are true and (R) is not correct explanation of (A).
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c) (A) is true but (R) is false.

d) (A) is false but (R) is true.
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26. Read the following statements:Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
Assertion (A): Both education and health increase the income-generating capacity of an
individual.
Reason (R): The contribution of an educated and healthy person to economic growth is
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more than that of an illiterate and unhealthy person.

a) Both (A) & (R) are true and (R) is correct explanation of (A).
b) Both (A) & (R) are true and (R) is not correct explanation of (A).
c) (A) is true but (R) is false.
d) (A) is false but (R) is true.
27. Read the following statements:Assertion (A) and Reason (R). Choose one of the correct
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alternatives given below:

Assertion (A): On-the-job training is a source of human capital formation.
Reason (R): on-the-job training is a programme where employees skills are horn by
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technical and educational training.

a) Both (A) & (R) are true and (R) is correct explanation of (A).
b) Both (A) & (R) are true and (R) is not correct explanation of (A).
c) (A) is true but (R) is false.
d) (A) is false but (R) is true.

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28. Read the following statements:Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
Assertion (A): Human Capital Formation is required for the effective use of physical
capital.
Reason (R): The formation of human capital raises the life expectancy of the people.
a) Both (A) & (R) are true and (R) is correct explanation of (A).
b) Both (A) & (R) are true and (R) is not correct explanation of (A).
c) (A) is true but (R) is false.
d) (A) is false but (R) is true.

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29. Read the following statements: Assertion (A) and Reason (R). Choose the correct
alternative from those given below.
Assertion (A): Expenditures on both education and health are to be carried out
simultaneously by all the three tiers of the government
Reason (R): Expenditures on education and health make substantial long-term impact and

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they cannot be easily reversed; hence, government intervention is essential
a) Both (A) & (R) are true and (R) is correct explanation of (A).
b) Both (A) & (R) are true and (R) is not correct explanation of (A).
c) (A) is true but (R) is false.
d) (A) is false but (R) is true.
SC
30. State and discuss any one recommendation of the Education Commission (1964-66).
The Education Commission (1964-66) had recommended that at least 6% of GDP should be spent
on education. This is required to make a noticeable rate of growth in educational achievements. This
was expected to raise the academic standards in India
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Each question carries 3/4 mark :

31. What are the indicators of educational achievements in a country?
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The indicators of educational achievements in a country are:

i. Adult literacy level
ii. Primary education completion rate
iii. Youth literacy rate
32. Distinguish between physical capital and human capital.
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Physical Capital Human Capital

Physical capital is tangible and can Human capital is intangible and
be easily sold in the market. cannot be sold in the market.

It depreciates with the passage of time Depreciation in human capital (due to

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again) can be reduced by making

continuous investment in education &
health
R

Human capital is less mobile between

It is more mobile between countries countries as compared to physical capital

Physical capital (like machinery) Human capital (like skills of a person)

separated from its owners cannot be separated from the own
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 Physical capital is the outcome of the Formation of human capital is partly a
conscious decision of the owner and is social process by partly a conscious
mainly an economic and technical decision of the possessor of the human
process. capital

33. Bring out the difference between human capital and human development.
i. Human development is based on the idea that education and health are integral to
human well-being because only when people have the ability to read and write and
the ability to lead a long and healthy life, they will be able to make other choices

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which they value. Human capital treats human beings as a means to an end; the end
being the increase in productivity. In this view, any investment in education and
health is unproductive if it does not enhance output of goods and services.
ii. In the human development perspective, human beings are ends in themselves.

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Human welfare should be increased through investments in education and health
even if such investments do not result in higher labour productivity. Therefore, basic
education and basic health are important in themselves, irrespective of their
contribution to labour productivity. In such a view, every individual has a right to get
basic education and basic health care, that is, every individual has a right to be
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literate and lead a healthy life.
34. What factors contribute to human capital formation?
The following factors contribute to human capital formation.
a) Investment in education and health
b) Expenditure by firm on the job training to their workers.
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c) Expenditure on acquiring information about the labour market and other markets
like education and health.
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d) Expenditure on migration which involves cost of transport, higher cost of living in

the migrated
35. How do government organizations facilitate the functioning of schools and hospitals in
India?
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i. In India, the ministries of education at the union and state level, departments of
education and various organizations like National Council of Educational
Research and Training (NCERT), University Grants Commission (UGC) and All
India Council of Technical Education (AICTE) facilitate health institutions.
ii. The ministries of health at the union and state level, departments of health and
various organizations like National Medical Commission and Indian Council for
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Medical Research (ICMR) facilitate health institutions.

36. Discuss the need for promoting women’s education in India.
Education for women in India is of great significance for various reasons.
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i. It improves economic independence and social status of women.

ii. It favorably affects the fertility rate as educated women do not wish to expend
the size of their family unnecessarily.
iii. It also improves health care of women and children.
37. Establish the need for acquiring information relating to health and education expenditure for
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 the effective utilization of human resources.
Expenditure incurred for acquiring information relating to health and education is
considered a source of human formation. This information is necessary to make decisions
regarding investments in human capital. People come to know the level of salaries
associated with various types of jobs. They come to know whether the educational
institutions are providing the right type of employment skills along with cost.
38. How does investment in human capital contribute to growth?
i. Increase in the Productivity of Physical Capital: The skilled workers handle the
physical capital in such a manner that these not only enhance their productivity

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but also lead to efficient utilization capital.
ii. Innovation of skills: An educated person is more productive and skilful. He has
the potential to develop new skills and innovate new techniques that can be more
efficient.
iii. High Participation Rate: Human capital endowed with higher technical skills and

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innovating power is more productive and efficient. This increases the participation
of more people in the process of economic growth and development.
39. How is health a source of human capital formation?
The wealth of a country can be increased with the efforts of healthy workforce. Investment in health
sector increases efficiency and productivity of a nation’s workforce. In contrast to an unhealthy
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person, a healthy person can work better with more efficiency and consequently, can contribute
relatively more to the GDP of the country. Good health and medical facilities not only extends life
expectancy but also improves quality and standard of life. Investing in health sector ensures the
supply of healthy workforce.
40. What is migration? What are its costs and benefits?
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Migration is shifting of a person from one place to another with the intentions of settling,
permanently or temporarily in a new location. The movement is often over long distances
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and from one country to another. When people migrate from one country to another country
it is known as external migration, on the other hand when people shift from one state to
another state it is known as internal migration.
Costs of Migration:
i. It involves higher cost of living in migrated area.
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ii. It involves cost of transportation.

iii. It involves psychological cost of living in a foreign culture.
Benefits of Migration:
i. Higher earnings
ii. Better social status
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41. Discuss the weaknesses of education sector in India.

Following are the weaknesses of education sector in India:
i. High level of Illiteracy
ii. Gender Bias: Education in India is gender-biased. The enrolment of girls in both
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primary and upper primary classes is much below the boys.

iii. Low-Quality Education and Lack of Vocational and Technical Training
iv. Low Level of Government Expenditure
Imbalances: The education system also suffers from various imbalances.

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42. ‘There is downward trend in inequality worldwide with a rise in the average education
levels.’ Comment.
As the average education level improves the levels of productivity rise. Educated people
find
better employment opportunities. Therefore, an improvement in the education level brings about
increase in income which in turn, reduces economic inequalities. Since there has been an
improvement in the average education level the world over, there is a downward trend in inequality.
43. How does human capital formation improves quality of life?
Human capital formation improves quality of life as it provides better job, high income and

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improves health. It results in better standard of living.
44. What is the difference between literacy and education?
Education is a much wider concept than literacy. Literacy refers to the ability to read and write.
Education includes three parameters, viz. primary education, secondary education and higher

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education.
45. What do you mean by investment in education?
Proper utility of man power depends on the system of education and training of people.
Labour skill of an educated person is more than that of an uneducated one, which enables
him to go generate more income than that of an uneducated person.
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Spending on education by individual is similar to spending on capital goods by companies.
Individuals invest in education to increase their future income and raise the living standard.
46. Discuss the need for government intervention in the education and health sectors in India.
There is a need for different forms of government intervention in education and health
sectors due to the following reasons
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i. Expenditures on both education and health is to be carried out simultaneously by

all the three tiers of the government namely Central Government, State
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Government and Local Government in India as per the federal structure of

Government in India.
ii. Private sector is governed by profit motive and hence does not provide
education and health facilities at a reasonable cost which may be affordable to
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all.
iii. Standard of education and health needs to be maintained.
iv. Education and health is essential for social upliftment of backward and weaker
sections of the society.
v. Regional disparities are prevalent in education and health in India which can be
corrected only through government Intervention.
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47. Bring out the need for on the job training of a person.
It increases the skill and efficiency of the workers. It, thus, leads to an increase in
production and productivity. Expenditure on the job training is a source of capital formation.
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Increase in income from such expenditure (in the form of higher labor productivity) is much
more than the cost of it.
48. Trace the relationship between human capital and economic growth.
i. Effective use of physical capital: Its growth and productivity depends on human
capital formation.

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 ii. Human capital formation raises the productivity and production as knowledgeable
and skilled worker makes the better (use of the resources). Increase in productivity
and quality production depends on technical skill of the people which can be
acquired only by education or training and maintaining health of the people.
iii. The labor skill of an educated person is more than of an uneducated person; former
generates more income than the latter. A healthy person provides an uninterrupted labor
supply for a longer period of time. Elaborate as discussed in class.
49. Discuss the following as a source of human capital formation.
a) Health infrastructure

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b) Expenditure on migration
Health Infrastructure: Expenditure on health is an important source of human capital
formation. It directly increases the supply of healthy labour force and is thus a source of
capital formation. Expenditure on health is needed in the following areas.

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a. A preventive medicine known as vaccination curative medicines, i.e., medical
intervention during the time of illness is very important.
b. Provision of clean drinking water and good sanitation is very important for
improvement of health. Health expenditure directly increases the physical
capacity of human being and it raises the supply of healthy labor force.
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Expenditure on migration: People migrate in search of jobs that bring them higher
incomes than what they get on their native places. Migration involves more expenditure in
terms of cost of transport and higher cost of living in the migrated places. But earnings in
the migrated places are much higher than the cost of migration. In this way, expenditure on
migration is a source of capital formation.
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50. What are the main problems of human capital formation in India?
Human capital formation in India suffers from the following
problems:
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i. Inadequate resources: The volume of resources allocated in the formation of

human capital has been much inadequate as compared to its requirement.
ii. Inefficiencies: Human capital scenario in India is subject to inefficiencies. There
are lot of wastages of society’s resources as a result of underemployment, brain
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drain, illiteracy, poor health facilities etc.

iii. Imbalances: human capital formation in India is subjected to several imbalances
like allocation of greater proportion of resources for higher education meant for
few people as compared to primary and secondary education.
iv. High Growth of Population: Rising population adversely affects the attempts of
improving quality of life because it reduces per capita availability of existing
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facilities.
51. Explain the role of education in the economic development of a nation.
i. Education provides knowledge to understand changes in society and scientific
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advancements.
ii. It stimulates inventions and innovations in the economy.
iii. The availability of educated labour force facilitates adaptation of new
technologies.

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 iv. Technical skills acquired through education provide an opportunity to make better
use of the given resources thereby promoting economic development of the nation.
52. Explain the main goals of Sarva Shiksha Abhiyan.
Following are the main goals of Sarva Shiksha Abhiyan:
i. To provide useful and elementary education for all children in the 6-14 age group by
2010.
ii. To bridge social, regional and gender gaps with the active participation of
community in the management of schools.
iii. To allow children to learn about and master their natural environment in order to

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develop their potential both spiritually and materially.
iv. To inculcate value-based learning this allows children an opportunity to work for
each other’s well being rather than to permit mere selfish pursuits.
v. To realize the importance of Early Childhood Care and education and looks at the

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0-14 age as a continuum.
53. Briefly describe the expansion of elementary education during period plan in India.
Following are the important programmes for the expansion of elementary education during
period plan in India:
i. Sarva Shiksha Abhiyan (SSA)
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ii. Education Guarantee Scheme and Alternative and Innovative Education.
iii. Mid-day Meal Scheme
iv. National Programme for education of girls at Elementary Level (NPEGEL)
54.
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‘School dropouts are giving way to child labor’. Discuss how this is a loss to human capital?
School dropouts are a major problem faced by the primary schools. Though India has
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made potential progress in enrolment rates at primary school but still less successful in reducin
dropout rates.
Some of the reasons for school dropout are:
i. Migration of families.
ii. Child marriage
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iii. Poverty
iv. Child labour
Prioritizing a child's education becomes difficult for families which are poor and have limited
They tend to dropout school after attaining a certain age to help their families financially by w
industries. Entering into child labor during formative stages of life prevents them from getting
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education and deprives them from better employment opportunities in future.In developing co
seen that poverty is the major cause of child labor. When the citizens of a country are literate t
contribution in the economic growth increases. Unskilled and illiterate labor force is absolutel
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the human capital of a country.

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