CBSE Class 11 Economics Indian Economic Development Revision Notes Chapter 5

Class 11 Indian Economic Development Chapter 5 Notes

CBSE Class 11 Indian Economic Development Revision Notes Chapter 5 – Human Capital Formation in India 

The revision notes for Class 11 Indian Economic Development Chapter 5 – Human Capital Formation in India are curated by the subject matter experts of Extramarks. These notes cover all topics of the chapter and are written in an easy-to-read manner. Understanding the concepts behind any theme of economics becomes extremely necessary to score good marks in the subject. Therefore, these notes offer a chance for a quick and systematic revision of the chapter.  

Access Class 11 Economics Indian Economic Development Chapter 5 – Human Capital Formation in India Notes

Human capital may be defined as the talent, aptitude, expertise, education and knowledge of people that contribute to increasing labour productivity and allow a raised value of future income.

 Major Sources of Human Capital in Country

1. Expenditure on Education: Education is a field in which investment gains monetary returns and exponential human resource development. Thus, education is a primary source of human capital development. This field is considered primary as it allows the entire nation’s future growth.
2. Expenditure on Health: Any compromise with the health of individuals causes a loss in productivity output, both in the case of a suffering person and people who work despite their poor health. Allowances for preventive medicine, curative medicine, social medicine, clean drinking water etc, come under healthcare expenditure. 
3. On-the-job training: Adaptation to the work environment is an essential factor when it comes to creating an able human resource. Extracting the maximum potential of an individual by supervisors who offer on-the-job training seminars and skill-enhancing workshops is important for the generation of a competent workforce. 
4. Migration: Many workers migrate to other parts of the nation or abroad to find jobs. This can contribute as a source of human capital formation.
5. Information: Incurring expenses in terms of information gained about labour markets, product markets, capital markets, education and health for efficient utilisation of human stock to influence decisions made regarding them is also a part of human capital formation.

 Importance of Human Capital Formation

1. Boosts productivity: Investing in maintaining the quality of education and healthcare can increase productivity by warranting awareness of the workers and enhancing their technical skills.
2. Control of population growth: It is an observation that educated people have smaller families than illiterate people. Imparting education amongst people of all strata is essential to control the population.
3. Improves quality of life: A society of educated, healthy and skilled individuals is an indicator of a good quality of the population. Human capital investment can enhance the quality of life. 
4. Increases life expectancy: Quality of life improvement can improve people’s life expectancy as they have the chance to avail proper healthcare in case of health discrepancies. 
5. Effective use of physical capital: Well-educated skilful individuals can increase the efficiency of the provided resources like physical tools and equipment by obtaining better methods to perform tasks. 

 Reasons for Poor Human Capital Formation

1. Insufficient resources: Inadequate resources are provided for human capital development, resulting in no growth in the educational and health sectors. The development of these sectors is essential for well-organised human capital formation.
2. Serious inefficiencies: Many human capabilities are underutilised, resulting in a waste of resources. Widespread illiteracy and unemployment are a few major reasons that lead to inefficiencies in human capital formation. 
3. High growth of population: A continuous population growth has deteriorated the quality of human capital.
4. Lack of proper manpower planning: A lack of balance exists between human resources as there is a discrepancy between demand and supply areas in various categories of the workforce.
5. High poverty levels: Poverty is the biggest hurdle in the population which leads to a lack of human resources for capital building as the basis of productivity lies in a healthy and literate workforce.

Difference Between Human Capital and Physical Capital

Difference between Human Capital and Human Development

Education

Education is the process of imparting knowledge and skills to people through teaching, training, and learning that takes place in universities and other educational institutions.

• Growth of the Education System in India: The number of schools has increased in India from 230.7 thousand in 1950–51 to 1215.8 thousand, indicating notable improvement in the education sector (2005-06). The number of professors and students was also seen to have increased.
• Gross Enrollment Ratio (GER): Primary education has a higher GER than secondary education. The Gross Enrollment Ratio (GER), expressed as a percentage of the population of the corresponding eligible official age group in a given school year, is the total number of pupils enrolled in a grade, cycle, or level of education, independent of age.

Education Sector in India

The education sector in India is divided into the following stages:

• Elementary education: The rock-solid foundation of all people of a country is built during elementary education from ages 6 onwards. This education is free and mandatory for all children, as declared by the government. 
• Secondary education: Development of crucial professional skills like analytical and technical capabilities is done from classes 9 to 12. 
• Higher education: University-level education comes under higher education. Students are able to make career choices and become experts in their chosen fields. The UGC looks after funding, promoting and coordinating university education.

Problems/ Weakness in Education Sector

• High illiteracy – A significantly low literacy rate of 64.8% was observed according to the 2001 census. 
• Gender bias – A gender bias exists in that more boys than girls are enrolled in primary levels of school. This is a drawback for the development of the country. 
• Low-quality education – The system of education in India primarily engages in imparting theoretical knowledge instead of taking a practical approach, which may lead to restricted learning in students. A new education policy has been issued, which may lead to better changes in this aspect.
• Lack of vocational and technical training – General education is prioritised instead of enough emphasis on vocational and technical education. 
• Low level of government expenditure – The spending done by the government is lesser than the level of expenditure that is required. 

Primary Education Schemes

• Sarva Shiksha Abhiyan (SSA) 

• Founded in 2001
• Aimed at universalizing and enhancing the quality of elementary education in India through community ownership.
• It is being implemented in collaboration with governments to meet the needs of children aged 6 to 14. 

• National Programme for Education of Girls at Elementary Education (NPEGEL)

• Aimed at improving education for girls by giving additional support for the construction of a model girl-friendly school. 
• Community mobilisation and tracking of girls’ school enrollment are given more priority in each cluster.
• Under NPEGEL, 35,252 model schools have been established.

• Kasturba Gandhi Balika Vidyalaya (KGBV)

• Inaugurated in July 2004
• Aimed at establishing residential schools for girls from the SC, ST, OBC and minority communities at the upper elementary level. 
• The scheme was later integrated into Sarva Shiksha Abhiyan after two years on 1st April 2007.

Human Capital Formation In India Class 11 Notes Free Download

Notes on Human Capital Formation Class 11: What is Human Capital?

Human capital refers to the talent, expertise, aptitude, education and knowledge of an individual that will contribute to improving labour productivity and increasing future income.

1. Expenditure on education
2. Expenditure on health

Significance of Human Capital Formation: Class 11 Chapter 5 Notes

Revision notes for Class 11 Indian Economic Development Chapter 5 emphasise the importance of human capital formation. The significance is as follows:

• The development of human capital aids in allocating the best resources, which is made possible by a nation’s educational system.
• Utilising human capital formation to raise awareness aids in slowing population increase.
• Human capital formation aids life expectancy by enhancing it. Proper healthcare facilities play an important role in this. 
• Human capital formation increases the productivity and technical skills of the workforce. 

Causes Behind Poor Human Capital Formation

• Inadequate resources do not allow the operative formation of human capital.
• The rate of education among the working class remains low in every sector. This also gives rise to unemployment in the country.
• There is a high population growth, which is a major hurdle in the formation of human capital.
• Improper planning and inadequate utilisation of manpower are other issues in human capital formation.
• The rise in the level of poverty

Physical Capital

The added resources needed for future production, like plant and machinery, factory, raw materials, etc. are termed physical capital. The revision notes Class 11 Indian Economic Development Chapter 5 discuss the concept of human capital formation, which includes the importance of physical capital. 

What is Education?

The method of teaching, training and learning with special reference to schools and colleges to develop knowledge is called education. Class 11 Indian Economic Development Chapter 5 offers insight into the education sector in India. 

Expansion of the Education Sector in India

The education sector has witnessed growth almost 6 times more during the year span 2005 – 06 as compared to the period of 1950 – 51, the period closer to India’s independence. The amount of educators has also seen numerous growth. 

Notes on Human Capital Formation Class 11: Education Sector in India

There are three divisions within the Indian education sector:

• Elementary or primary education is the first stage of education for kids between the ages of six and fourteen.

• Secondary education is available to children studying in classes 9 through 12.

• Higher education includes both general and technical education for youngsters.

Why Choose Extramarks?

• Extramarks make content for students after careful calibration of the NCERT topics for economics. These notes provide an excellent way of revising the entire chapter in one go.

• The notes are easily accessible to the students.
• Revision Notes for Class 11 Indian Economic Development Chapter 5 help the students answer conceptual questions from many previous years’ papers. 
• The notes are created by the subject matter experts in such a way that the subject can be easily grasped by students.
• An especially useful addition is the frequently asked questions at the end, which allow students to get a quick overview of what they should be focusing on in their exam preparation strategy.