Professional Documents
Culture Documents
16 Economics
2015-16
population need not be a liability. It can
be turned into a productive asset by
investment in human capital (for example,
by spending resources on education and
health for all, training of industrial and
agricultural workers in the use of modern
technology, useful scientific researches
and so on).
The two following cases illustrate how
people can try to become a more productive
resource:
Story of Sakal
There were two friends Vilas and
Sakal living in the same village
Semapur. Sakal was a twelve-year -
old boy. His mother Sheela looked
after domestic chores. His father Buta
Chaudhary worked in an agricultural
field. Sakal helped his mother in
domestic chores. He also looked after
his younger brother Jeetu and sister
Picture 2.1 Seetu. His uncle Shyam had passed
the matriculation examination, but,
Lets Discuss was sitting idle in the house as he
had no job. Buta and Sheela were
Looking at the photograph can you
explain how a doctor, teacher, engineer eager to teach Sakal. They forced him
and a tailor are an asset to the to join the village school which he
economy? soon joined. He started studying and
Not only do the more educated and the completed his higher secondary
healthier people gain through higher examination. His father persuaded
incomes, society also gains in other him to continue his studies. He raised
indirect ways because the advantages of a a loan for Sakal to study a vocational
more educated or a healthier population course in computers. Sakal was
spreads to those also who themselves were meritorious and interested in studies
not directly educated or given health care. from the beginning. With great vigour
In fact, human capital is in one way and enthusiasm he completed his
superior to other resources like land and course. After some time he got a job
physical capital: human resource can in a private firm. He even designed a
make use of land and capital. Land and new kind of software. This software
capital cannot become useful on its own! helped him increase the sale of the
For many decades in India, a large firm. His boss acknowledged his
population has been considered a liability services and rewarded him with a
rather than an asset. But a large promotion.
People as Resource 17
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Picture 2.2 Stories of Vilas and Sakal
Lets Discuss
Story of Vilas
Vilas was an eleven-year old boy Do you notice any difference between
residing in the same village as Sakal. the two friends? What are those?
Vilass father Mahesh was a Activity
fisherman. His father passed away
when he was only two years old. His Visit a nearby village or a slum area
and write down a case study of a boy
mother Geeta sold fish to earn money
or girl of your age facing the same
to feed the family. She bought fish
condition as Vilas or Sakal.
from the landowners pond and sold
it in the nearby mandi. She could
In the two case studies we saw Sakal
earn only Rs 20 to 30 a day by selling
went to school and Vilas did not go. Sakal
fish. Vilas became a patient of
was physically strong and healthy. There
arthritis. His mother could not afford
was no need for him to visit the doctor
to take him to the doctor. He could frequently. Vilas was a patient of
not go to school either. He was not arthritis. He lacked the means to visit the
interested in studies. He helped his doctor. Sakal acquired a degree in
mother in cooking and also looked computer programming. Sakal found a job
after his younger brother Mohan. in a private firm while Vilas continued
After some time his mother fell sick with the same work as his mother. He
and there was no one to look after earned a meagre income like his mother
her. There was no one in the family to support a family.
to support them. Vilas, too, was forced In the case of Sakal, several years of
to sell fish in the same village. He education added to the quality of labour.
like his mother earned only a meagre This enhanced his total productivity.
income. Total productivity adds to the growth of
the economy. This in turn pays an
18 Economics
2015-16
individual through salary or in some other Economic Activities by Men and Women
form of his choice. In case of Vilas, there Like Vilas and Sakal, people have been
could not be any education or health care engaged in various activities. We saw that
in the early part of his life. He spends his Vilas sold fish and Sakal got a job in the
life selling fish like his mother.
firm. The various activities have been
Henceforth, he draws the same salary of
classified into three main sectors i.e.,
unskilled labour as his mother. primary, secondary and tertiary. Primary
Investment in human resource (via sector includes agriculture, forestry, animal
education and medical care) can give high husbandry, fishing, poultry farming,
rates of return in the future. This
mining, and quarrying. Manufacturing is
investment on people is the same as
included in the secondary sector. Trade,
investment in land and capital. One transport, communication, banking,
invests in shares and bonds expecting education, health, tourism, services,
higher return in the future. insurance etc. are included in the tertiary
A child, too, with investments made sector. The activities in this sector result
on her education and health, can yield a in the production of goods and services.
high return in the future in the form of These activities add value to the national
higher earnings and greater contribution income. These activities are called
to society. Educated parents are found to economic activities. Economic activities
invest more heavily on the education of have two parts market activities and
their child. This is because they have non-market activities. Market activities
realised the importance of education for involve remuneration to any one who
performs i.e., activity performed for pay
themselves. They are also conscious of
or profit. These include production of goods
proper nutrition and hygiene. They
or services including government service.
accordingly look after their childrens Non-market activities are the production
needs for education at school and good for self-consumption. These can be
health. A virtuous cycle is thus created
in this case. In contrast, a vicious cycle
may be created by disadvantaged parents
who, themselves uneducated and lacking
in hygiene, keep their children in a
similarly disadvantaged state.
Countries like Japan have invested in
human resource. They did not have any
natural resource. These countries are
developed/rich countries. They import the
natural resource needed in their country.
How did they become rich/developed?
They have invested on people especially
in the field of education and health. These
people have made efficient use of other
resource like land and capital. Efficiency
and the technology evolved by people have
Picture 2.3 Based on the picture can you classify
made these countries rich/developed. these activities into three sectors?
People as Resource 19
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consumption and processing of primary helps individual to make better use of the
product and own account production of economic opportunities available before
fixed assets. him. Education and skill are the major
determinants of the earning of any
individual in the market. A majority of
Activity
women have meagre education and low
Visit a village or colony located near skill for mation. Women are paid low
to your residential area and note compared to men. Most women work
down the various activities where job security is not there. Various
undertaken by the people of that activities relating to legal protection is
village or colony. meagre. Employment in this sector is
If this is not possible, ask your characterised by irregular and low income.
neighbour what is their profession? In this sector there is an absence of basic
In which of the three sectors will you facilities like maternity leave, childcare
categorise their work? and other social security systems.
Say whether these activities are However, women with high education and
economic or non-economic activities: skill formation are paid at par with the
Vilas sells fish in the village market. men. Among the organised sector,
Vilas cooks food for his family. teaching and medicine attract them the
Sakal works in the private firm. most. Some women have entered
Sakal looks after his younger brother administrative and other services
and sister. including job, that need high levels of
scientific and technological competence.
Ask your sister or your classmate what
Due to historical and cultural reasons she would like to take up as a career?
there is a division of labour between men
and women in the family. Women Quality of Population
generally look after domestic chores and The quality of population depends upon
men work in the fields. Sakals mother the literacy rate, health of a person
Sheela cooks food, cleans utensils, washes indicated by life expectancy and skill
clothes, cleans the house and looks after formation acquired by the people of the
her children. Sakals father Buta country. The quality of the poulation
cultivates the field, sells the produce in ultimately decides the growth rate of the
the market and earns money for the family. country. Illiterate and unhealthy
Sheela is not paid for the services population are a liability for the economy.
delivered for upbringing of the family. Literate and healthy population are an
Buta earns money, which he spends on asset.
rearing his family. Women are not paid
for their service delivered in the family. E ducation
The household work done by women is Sakals education in the initial years of
not recognised in the National Income. his life bore him the fruits in the later
Geeta, mother of Vilas, earned an years in terms of a good job and salary.
income by selling fish. Thus women are We saw education was an important
paid for their work when they enter the input for the growth of Sakal. It opened
labour market. Their earning like that of new horizon for him, provided new
their male counterpart is determined on aspiration and developed values of life.
the basis of education and skill. Education Not only for Sakal, education contributes
20 Economics
2015-16
...human being is a positive asset and
a precious national resource which
needs to be cherished, nurtured and
developed with tenderness and care,
coupled with dynamism. Each
individuals growth presents a
different range of problems and
requirements. ... The catalytic action
Picture 2.4 School children of education in this complex and
dynamic growth process needs to be
towards the growth of society also. It planned meticulously and executed
enhances the national income, cultural with great sensitivity.
richness and increases the efficiency of
governance. There is a provision made Source: National Education Policy, 1986.
2015-16
bound initiative of the central
Activity
government, in partnership with the
Count the number of boys and girls states, the local government and the
studying in your school or in your community for achieving the goal of
neighbouring co-ed school. universalisation of elementary
Ask the school administrator to education. Along with it, bridge courses
provide you with the data of boys and and back-to-school camps have been
girls studying in the classroom. Study initiated to increase the enrollment in
the difference if any and explain for elementary education. Mid-day meal
reasons in the classroom. scheme has been implemented to
encourage attendance and retention of
children and improve their nutritional
(Budgetary estimate). The literacy rates status. These policies could add to the
have increased from 18% in 1951 to 74% literate population of India.
in 2010-11. Literacy is not only a right, The eleventh plan endeavoured to
it is also needed if the citizen are to increase the enrolment in higher
perform their duties and enjoy their education of the 18 to 23 years age
rights properly. However, a vast group to 15% by 2011-12 and to 21% by
difference is noticed across different twelfth plan. The strategy focuses on
sections of population. Literacy among increasing access, quality, adoption of
males is nearly 16.6% higher than states-specific curriculum modification,
females and it is about 16.1% higher in vocationalisation and networking on the
urban areas as compared to the rural use of information technology. The plan
areas. In 2011 Literacy rates vary from also focuses on distant education,
94% in Kerala to 62% in Bihar. The convergence of formal, non-formal,
primary school system has expanded to distant and IT education institutions.
over 7.68 lakhs in 2004-05. Unfortunately, Over the past fifty years, there has been
this huge expansion of schools has been a significant growth in the number of
diluted by the poor quality of schooling university and institutions of higher
and high drop out rates. Sarva Siksha learning in specialised areas. Let us
Abhiyan is a significant step towards read the table to see the increase in
providing elementary education to all number of college, universities, enrollment
children in the age group of six to of students and recruitment of teachers
fourteen years by 2010 .... It is a time- since 1951 to 2011-12, 2012-13.
Table 2.1: Number of Institutions of Higher Education, Enrolment and Faculty
Year Number of Number of Students Teachers
Colleges Universities
195051 750 30 2,63,000 24,000
199091 7,346 177 49,25,000 2,72,000
199697 9,703 214 67,55,000 3,21,000
199899 11,089 238 74,17,000 3,42,000
200708 18,064 378 14,00,000 4,92,000
201112 31,324 611
201213 37,204 723 28,00,000
Source: UGC Annual Report 199697 and 199899 and Selected Educational
Statistics, Ministry of HRD, Draft Report of Higher Education for 11th Five
Year Plan, working group on Economic Survey 2011-12, 2012-13.
22 Economics
2015-16
Lets Discuss improvement in the health status of the
population has been the priority of the
Discuss this table in the classroom and country. Our national policy, too, aims at
answer the following questions. improving the accessibility of health care,
1. Is the increase in number of colleges family welfare and nutritional service with
adequate to admit the increasing a special focus on the under-privileged
number of students? segment of population. Over the last five
2. Do you think we should have more decades India has built up a vast health
number of Universities? infrastructure and has developed man
3. What is the increase noticed among power required at primary, secondary and
the teachers in the year 199899. tertiary sector in Government as well as
in the private sector.
4. What is your idea about future colleges
and Universities?
These measures adopted have
Health increased the life expectancy to over
66 years in 2011. *Infant mortality
Firm maximise profit: Do you think any
rate (IMR) has come down from 147
firm would be induced to employ people
who might not work efficiently as a in 1951 to and 42 in 2012. **Crude
healthy worker because of ill health? birth rates have dropped to 22.1 and
***death rates to 7 within the same
The health of a person helps him to
duration of time. Increase in life
realise his potential and the ability to
expectancy and improvement in child
fight illness. An unhealthy person
becomes a liability for an organisation care are useful in assessing the
indeed; health is an indispensable basis future progress of the country.
Increase in longevity of life is an
for realising ones well being. Henceforth,
indicator of good quality of life
marked by self-confidence. Reduction
in infant mortality involves the
protection of children from infection,
ensuring nutrition along with mother
and childcare.
Lets Discuss
Study the Table 2.2 and answer the
following questions.
1. What is the percentage increase in
dispensaries from 1951 to 2011?
2. What is the percentage increase in
Picture 2.5 Children standing in queue for doctors and nursing personnel from
health check-up 1951 to 2011?
* Infant mortality rate is the death of a child under one year of age.
** Birth rates is the number of babies born there for every 1,000 people during a particular period of time.
*** Death rate is the number of people per 1,000 who die during a particular period of time.
People as Resource 23
2015-16
Table 2.2: Health infrastructure over the years
SC: Sub centre, PHC: Primary Health Centre, CHC: Community Health Centre.
Source: National Health Profile, 2010: D/o Ayush, Ministry of Health and Family Welfare.
National Health Profile, 2013.
2015-16
domestic domain. Jeetu and Seetu are too phenomenon. Many youth with
small to be counted in the work force matriculation, graduation and post
population. Neither Jeetu, Seetu or Sheela graduation degrees are not able to find
can be counted as unemployed. The job. A study showed that unemployment
workforce population includes people from of graduate and post-graduate has
15 years to 59 years. Sakals brother and increased faster than among
sister do not fall within this age group so matriculates. A paradoxical manpower
they cannot be called unemployed. Sakals situation is witnessed as surplus of
mother Sheela works for the family. She manpower in certain categories coexist
is not willing to work outside her domestic with shortage of manpower in others.
domain for payment. She too cannot be There is unemployment among
called unemployed. Sakals grandparents technically qualified person on one hand,
(although not mentioned in the story) while there is a dearth of technical skills
cannot be called unemployed. required for economic growth.
In case of India we have unemployment Unemployment leads to wastage of
in rural and urban areas. However, the manpower resource. People who are an
nature of unemployment differs in rural asset for the economy turn into a liability.
and urban areas. In case of rural areas, There is a feeling of hopelessness and
there is seasonal and disguised despair among the youth. People do not
unemployment. Urban areas have mostly have enough money to support their
educated unemployment. family. Inability of educated people who
Seasonal unemployment happens are willing to work to find gainful
when people are not able to find jobs employment implies a great social waste.
during some months of the year. People Unemployment tends to increase
dependant upon agriculture usually face economic overload. The dependence of the
such kind of problem. There are certain unemployed on the working population
busy seasons when sowing, harvesting, increases. The quality of life of an
weeding and threshing is done. Certain individual as well as of society is adversely
months do not provide much work to the affected. When a family has to live on a
people dependant on agriculture. bare subsistence level there is a general
In case of disguised unemployment decline in its health status and rising
people appear to be employed. They have withdrawal from the school system.
agricultural plot where they find work. Hence, unemployment has detrimental
This usually happens among family impact on the overall growth of an
members engaged in agricultural activity. economy. Increase in unemployment is an
The work requires the service of five indicator of a depressed economy. It also
people but engages eight people. Three wastes the resource, which could have
people are extra. These three people also been gainfully employed. If people cannot
work in the same plot as the others. The be used as a resource they naturally
contribution made by the three extra appear as a liability to the economy.
people does not add to the contribution In case of India, statistically, the
made by the five people. If three people unemployment rate is low. A large
are removed the productivity of the field number of people represented with low
will not decline. The field requires the income and productivity are counted as
service of five people and the three extra employed. They appear to work
people are disguised unemployed. throughout the year but in terms of their
In case of urban areas educated potential and income, it is not adequate
unemployment has become a common for them. The work that they are pursuing
People as Resource 25
2015-16
seems forced upon them. They may the secondary sector, small scale
therefore want other work of their choice. manufacturing is the most labour -
Poor people cannot afford to sit idle. They absorbing. In case of the tertiary sector,
tend to engage in any activity irrespective various new services are now appearing
of its earning potential. Their earning like biotechnology, information technology
keeps them on a bare subsistence level. and so on.
Let us read a story to know how people
could become an asset for the economy of
a village.
Story of a Village
There was a village inhabited by
several families. Each family
produced enough to feed its members.
Each family met its needs by the
members making their own clothes
and teaching their own children. One
of the families decided to send one of
its sons to an agriculture college. The
Picture 2.6 Can you remember how much did boy got his admission in the nearby
you pay when you asked him to college of agriculture. After some time
mend your shoes or slippers? he became qualified in agro-
Moreover, the employment structure engineering and came back to the
is characterised by self-employment in the village. He proved to be so creative
that he could design an improved type
primary sector. The whole family
contributes in the field even though not of plough, which increased the yield
everybody is really needed. So there is of wheat. Thus a new job of agro-
disguised unemployment in the engineer was created and filled in the
agriculture sector. But the entire family village. The family in the village sold
shares what has been produced. This the surplus in a nearby neighbouring
concept of sharing of work in the field and village. They earned good profit,
the produce raised reduces the hardship which they shared among
of unemployment in the rural sector. But themselves. Inspired by this success
this does not reduce the poverty of the all the families after some time held
family, gradually surplus labour from a meeting in the village. They all
every household tends to migrate from the wanted to have a better future for
village in search of jobs. their children too. They requested the
Let us discuss about the employment panchayat to open a school in the
scenario in the three sectors mentioned village. They assured the panchayat
earlier. Agriculture, is the most labour that they would all send their
absorbing sector of the economy. In recent children to school. The panchayat,
years, there has been a decline in the with the help of government, opened
dependence of population on agriculture a school. A teacher was recruited
partly because of disguised unemployment from a nearby town. All the children
discussed earlier. Some of the surplus of this village started going to school.
labour in agriculture has moved to either After sometime one of the families
the secondary or the tertiary sector. In gave training to his daughter in
26 Economics
2015-16
tailoring. She started stitching clothes could consume. Now they could sell
for all the families of the village for what they produced to others who
everyone now wanted to buy and wear came to their village markets. Over
well-tailored clothes. Thus another time, this village, which formally had
new job, that of a tailor was created. no job opportunities in the beginning,
This had another positive effect. The had many like teacher, tailor, agro
time of the farmers in going far for engineer and many more. This was
buying clothes was saved. As the the story of a simple village where
farmers spent more time in the field, the rising level of human capital
the yield of the farms went up. This enabled it to evolve into a place rich
was the beginning of prosperity. The with complex and modern economic
farmers had more than what they activities.
Summary
You have seen how inputs like education and health helped in making people an
asset for the economy. The chapter also discusses about the economic activities
undertaken in the three sectors of the economy. We also study about the problem
associated with unemployment. Finally the chapter ends with the story of a village
which formally had no job but later had plenty.
Exercises
1. What do you understand by 'people as a resource'?
2. How is human resource different from other resources like land and physical
capital?
3. What is the role of education in human capital formation?
4. What is the role of health in human capital formation?
5. What part does health play in the individuals working life?
6. What are the various activities undertaken in the primary sector, secondary
sector and tertiary sector?
7. What is the difference between economic activities and non-economic activities?
8. Why are women employed in low paid work?
9. How will you explain the term unemployment?
10. What is the difference between disguised unemployment and seasonal
unemployment?
11. Why is educated unemployed, a peculiar problem of India?
12. In which field do you think India can build the maximum employment
opportunity?
13. Can you suggest some measures in the education system to mitigate the problem
of the educated unemployed?
14. Can you imagine some village which initially had no job opportunities but
later came up with many?
15. Which capital would you consider the best land, labour, physical capital
and human capital? Why?
People as Resource 27
2015-16
References
GARY, S. BECKER. 1966. Human Capital: A Theoretical and Empirical Analysis with Special
Reference to Education, General Series. Number 80. New York. National Bureau
of Economic Research.
THEODORE W. SCHUL TZ. 'Investment in Human Capital' American Economic Review.
March 1961.
Economic Survey 20042005. Ministry of Finance, Government of India, New Delhi.
India Vision 2020. The Report. Planning Commission. Government of India, New
Delhi.
Mid-Term Appraisal of the Tenth Five Year Plan (20022007). Planning Commission,
Part II. New Delhi.
Tenth Five Year Plan ( 20022007). Planning Commission, New Delhi.
28 Economics
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