Problems in Human Capital Formation in India

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Problems in Human Capital Formation in India
Challenges to Human
Capital Formation in
What we can do?
What is Human Capital ?
Human capital refers to the stock of
skills and knowledge gained by a worker
through education and experience to
perform labour so as to produce
economic value.
Human Capital : Sources
Investment in:
• Health
• Education
• On-the-job-training
• Migration
• information
Human Capital and Economic
• Enhanced productivity of human
capital contributes substantially not
only towards increased labour
productivity but also stimulate
Economic Growth
• Human capital formation and growth
are positively correlated
Human Capital Formation; Problems
and Solutions: International
• Lack of good health facilities
• Poor quality of education
• Educated unemployment
• Lack of skilled manpower
Problems in Human Capital
Formation in India
Brain Drain
Poor quality of Health care
Poor investment in human capital
Lack of skilled manpower
Asymmetric information
Measures taken for solve
the problems in Human
Capital formation in India
• HRHM adopted
• Made elementary education compulsory
• Made on the job training and
Vocationalisation compulsory elements of
• Various employment exchanges opened
throughout the country
Critical Appraisal of the Measures
taken to improve Human Capital
Formation in India
• Coverage of NRHM was not universal
• Employment exchanges became
outdated and was not catering the
needs of the job seekers
Amazing facts about Indian Human
• Imagine, 12 percent of all American scientists are of Indian
origin; 38 percent of doctors in America are Indian; 36
percent of NASA scientists are Indians; 34 percent of
Microsoft employees are Indians; and 28 percent of IBM
employees are Indians.
For the record: Sabeer Bhatia created and founded
Hotmail. Sun Microsystems was founded by Vinod Khosla.
The Intel Pentium processor, that runs 90 percent of all
computers, was fathered by Vinod Dham. Rajiv Gupta coinvented Hewlett Packard's E-speak project. Four out of
ten Silicon Valley start-ups are run by Indians. Bolly wood
produces 800 movies per year and s ix Indian ladies have
won Miss Universe/Miss World titles over the past 10
For the record: Azim Premji, the richest Muslim
entrepreneur on the face of the planet, was born in Bombay
and now lives in Bangalore.India now has more than three
dozen billionaires; Pakistan has none (not a single dollar
What We Can Do?
• The first step to solve this problem
should come from our side
• Serve our country first
• Discourage Brain Drain
• Free and Compulsory secondary
Thank You
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