Indian Economic Development: Human Capital Formation in India

Topics in this chapter

• Human Capital Concepts and Sources
• Education and Skill Development
• Health and Human Development
• Government Investment and Social Benefits
• Human Capital and Economic Growth
• Employment and Skill Mismatch
• Migration, Brain Drain, and Remittances

Cheat sheet

Practice questions

1. Question 1Q-E1E9C5

   Which statement best explains why expenditure on education is considered an investment in human capital?

   1. A.It increases the stock of machines and buildings in an economy.
   2. B.It improves a person's knowledge and skills, thereby raising productivity and earning capacity.
   3. C.It permanently eliminates the scarcity of all economic resources.
   4. D.It transfers ownership of natural resources from the government to households.
   See the answer and solution
2. Question 2Q-54DF07

   Which of the following is not a source of human capital formation?

   1. A.Expenditure on education
   2. B.Expenditure on healthcare
   3. C.On-the-job training
   4. D.Increase in the stock of machines without any improvement in workers' skills
   See the answer and solution
3. Question 3Q-AB7F92

   A state government builds more schools but does not improve nutrition, sanitation or access to healthcare. Which outcome is most likely in the long run?

   1. A.Human capital formation may remain limited because poor health can reduce attendance, learning and work productivity.
   2. B.Human capital formation will automatically become complete because the number of schools has increased.
   3. C.Healthcare has no relation to the quality of human capital.
   4. D.Education expenditure will directly increase the physical stock of machines.
   See the answer and solution
4. Question 4Q-1B5BA7

   Explain how education and healthcare contribute to human capital formation in India.

   See the answer and solution
5. Question 5Q-87282A

   Which situation best illustrates human capital formation through on-the-job training?

   1. A.A factory replaces an old machine with a new machine
   2. B.A firm trains its workers to operate advanced production software
   3. C.A family purchases additional farmland
   4. D.A shop increases its stock of finished goods
   See the answer and solution