Top 33 Questions on Human Capital Formation

Questions on Human Capital Formation

Q1. Define Human Capital?

Ans. It refers to the stock of skill, ability, expertise, Education, and Knowledge in a nation at a point in time. It is a stock concept.

Q2. Define Human Capital Formation (Human Capital Formation)?

Ans. It refers to the addition into the stock of Human Capital. In other words, it refers to the process of acquiring and increasing. The number of persons who have this skill, education, and experience is essential for production.

Q3. What do you mean by Human development?

Ans. It is based on the idea that education and health are integral to Human wellbeing. Since only when people can read and apply their Knowledge to derive maximum benefits. There will be able to lead a long and healthy life.

Q4. How is Human Development a broader term compares to Human Capital?

Ans. Human Capital treats Human beings as a means to an end, whereas, according to human development. Human beings are ends in themselves.

  • The concept of Human capital suggests that any investments in education and Health is unproductive if it doesn’t enhance the output of goods and services. However, According to Human development, human welfare should be increased through investment and education, and health. Even if such investment does not result in higher labor productivity. In emphasis, every individual has the right to be literate and lead a healthy life.

Q5. The stock of skill & experience of the nation at a point of time is called:

  1. Human Capital
  2. Human Development
  3. Human Capital formation
  4. Physical Capital

Ans. (a) Human Capital

Q6. ____________ is intangible and cannot be sold in market.

Ans. Human Capital.

Q7. Skill India Programmed launched by the govt. of India is an attempt to increase Human Capital Formation. (T/ F)

Ans. True, as it helps to enhance the skills of the population.

Q8. Gender bias in India is a hindrance to the process of skill formation (T/ F).

Ans. True, Parents are not willing to pay or educate their girl child.

Q9. Give the idea on which Human development is based?

Ans. It based on the ideas of education & health and are integral to human well-being.

Q10. Define Physical Capital?

Ans. It refers to the stock of produced means of production. In it, machines, factories, tools are included. It majorly consists of man-made things.

Human Capital Formation
Human Capital Formation

Q11. Explain 3 areas where expenditure is made compulsory to form Human Capital Formation?

Ans. Education: – Investment in education was one of the main sources of Human Capital Formation. People become resources when investment in education is made.

  1. It generates technical skills and creates manpower that is suited for improving labor productivity.
  2. It tends to bring down birth rates which make more resources available per person.
  3. An educated person earns many times more than the initial expenditure on his education.

Expenditure on Health:

A common English proverb suggests that “A sound mind in sound Body”.

Preventive medicine: known as Vaccination,

Curative medicine: Medical intervention during illness,

Social medicine: the spread of health literacy and provision of clean drinking water & good sanitation. The various forms as Health expenditure. A healthy person can work better than a sick person, leading to continuing more in GDP.

The job Training:

Expenditure regarding on-the-job training is also a source of human capital. Technical Training adds to the capacity of the people to produce more. Due to this reason, many firms provide on-the-job training to their workers as such expenditure increases the labor productivity more than the cost of it.

Expenditure on Information:

People spend money to acquire information about the labor markets and other markets like education & health so they can choose the best for them. Similarly, people spend to inquire about educational institutions, their education standards & cost of education. This information is necessary to decide regarding investments in Human Capital as well as for efficient anticipation of the acquired human Capital stock.

Expenditure on Migration:

People sometimes migrate from one place to the other in search of better jobs.  It includes migration of people from rural areas to urban areas in India and Immigration of Technical personal from India to other countries of the world.

Migration in Both cases involved 2 cases of kind of cost:

  1. Cost of transportation from 1 place to another.
  2. Higher cost of living in the migrated places.

Q6. A skilled worker like a software professional generates more income than an unskilled worker. Why?

Ans. A skilled worker generates more income than an unskilled worker mainly because the productivity of an educated or skilled person is higher than an unskilled one.

A skilled worker also commands a higher earning or gainful employment. This is because they can’t be substituted with another since it takes years to generate manpower that is skilled in a particular field. On the other hand, an unskilled worker like a Rickshaw puller can be easily substituted as such workers compromise on lesser earnings.

Q7. What role can the Govt. play in Human Capital formation in India?

Ans. Both education and health have been considered important for human capital formation. The provision of Basic Edu. & health facilities have been accepted as a goal in all societies. These facilities must be made available free for the poor classes who can’t afford them to ensure better skills and health of manpower. However, the private sector will not be froth coming in making a large investment in areas which are non-profitable & free distribution of services. Hence, the govt. has an imp. Role to play to ensure their availability.

Q8. The national literacy mission was set up in 1968. True/ False.

Ans. False, in 1988.

Q9. What does the abbreviation ‘NCERT”?

Ans. National council of educational research and Training.

Q10. Abbreviation of ‘UGC’?

Ans. University grants commission: set up in 1956.

Q11. Abbreviation ‘AICTE’?

Ans. All India Council of Technical Education.

Q12. Abbreviation ‘ICMR’?

Ans. Indian Council of Medical Research.

Q13. When was the ‘Right to Education act connected by the Govt. of India?

Ans. 2009, 6-14 age is compulsory to education.

Q14. What do you understand by the ‘Right to Education act’?

It was enacted by the govt. of India to make free education, a fundamental right of all children in the age group of 16-14 years.

Q15. When was ‘skill India’ Launched?

Ans. July 16, 2015.

Q16. There is a downward trend in inequality worldwide with a rise in the average education Level comment?

Ans. Yes, It is true to say that there is a downward trend of inequality worldwide with a rise in average educational levels.

Following steps has taken in the following directions:

  1. With the enactment of the right to education act in 2009, free education Has been made of fundamentals rights of all children in the age group of 6-14 years.
  2. Govt. of India levying a 2% of education on all union taxes. The revenue of the cess is earmarked for spending on elementary education.
  3. The Labor skill of an educated person is more than that of an uneducated person, which enables him to generate more income than the uneducated person. The higher-earning and greater acceptability of modern techniques the standard & quality of life. Thereby, reducing the gulf b/w the rich & the poor gradually. So, a rise in average education Level reduces the equality of income worldwide.

Q17. In India, the education section is regulated by:

  1. Ministry of education
  2. NCERT
  4. All of above

Ans. All of above

Q18. What are the main problems of Human Capital Formation in India?

Ans. Insufficient Resources:

The resources allocated to the formation of the Capital have been much less than the resources required. Due to this reason, the facilities of the formation of human capital have become grossly inadequate.

The rise in Population:

Rapidly rise in population adversely affects the quality of Human capital formation in developing countries. It reduces the per capita availability of existing facilities.

Brain Drain:

People migrate from one place to another in search of better job opportunities and some salaries. It leads to the loss of quality people like Doctors, Engineers, and professors, etc. who have high caliber & are rare in the developing country.

Weak Science & Technology:

In respect of education, the performances are particularly is unsatisfactory in the fields of science & Technology.

High regional & Gender inequality:

Regional and gender inequality lowers the human Development levels.

Q19. What is the Current level of Govt. expense on education?

Ans. About 3% of GDP.

Q20. What is the desired level of Govt. expenditure on education?

Ans. About 6% of GDP.

Q21. Name the approx. body in the field of medical research?

Ans. ICMR (Indian council of medical research)

Q22. In your view is it essential for the govt. to regulate the fee structure in education & health care institutions. If yes, Why?

Ans. Yes, it is essential for the govt. to regulate the fee structure in India. Because :

  1. In India, a large section of the population living below the poverty line, cannot afford even basic education and health care facilities.
  2. The providers of education in health services may acquire monopoly power & may get involved in exploitation by charging excessive fees.

Q23. What is the gross enrollment ratio?

Ans. It refers to the proportion of students enrolled of total no. of individuals belong to relevant age group.


Q24. Who are called Literates?

Ans. Those people above a fixed age (7 years) who can more or less write & understand in any language are called literates.

Q25. Argue in favor of the need for different forms of govt. intervention in education & health sectors?

Ans. The exp. On education & health assume great importance on the formation of human capital. To ensure favorable benefits of such exp., govt. intervention is required for the following reasons:

The exp. On education & health make a substantial long-term impact & they can’t be easily reserved. If a child is admitted to a school on health care Centre and required services are not provided in such institute, then a sustained amount of damage would have been done before the decision is taken to shift the child to another institution.

Individual consumers of reservices do not have complete information about the availability of services and their cost.

The providers & educational health services may acquire a monopoly path and may get involved in the expedition. So the role of govt. is important to ensure that the private providers of these services adhere to their standards stipulated by the govt. & charge the correct price.

Q26. What are the indicators of educational achievements in a country?

Ans. Generally, the indicators are:

  1. Audit literacy level
  2. Primary education competition rate.
  3. Youth literacy rate.

Q27. _______________ was launched in 2001 to globalize & improve the quality of elementary education in India.

Ans. “Sarv Shiksha Abhiyaan”.

Ques: As per census 2011, which of the following states has the lowest female literacy rate in India.

  1. Rajasthan
  2. Bihar
  3. Orissa
  4. Sikkim

Ans. Rajasthan

Q28. What is vocational education?

Ans. Education that aims at providing skills for a particular occupation is known as Vocational education.

Q29. What is the major achievement of the educational sector of India?

Ans. Expansion of Institutions:

The no. of primary & Middle schools have been increased to 2.35

Improvement in literacy rate:

The literacy rate has improved from 18.3% in 1951 to 73% in 2011. The Girls in literacy rate in b/w male & female has also brought down.

The rise in women literacy rate:

The female literacy rate which was just 8.9% in 1951 increased to 64.64% in 2011.

Q30. As per 2011, The literacy rate in India is ______

Ans. 73%

Q31. As per census 2011, which state has the highest literacy rate in India.

Ans. Kerala

Q32. As per census 2011, which of the following has the lowest literacy rate?





Ans. Bihar

Q33.What is the major health sector in India?

Ans. A) Death rate has fallen from 27.4 (per 7000 pop) in 1951 to 7 % in 2013.

b) Infant mortality rate (per 1000 pop) has come down from 146 in 1951 to 40 in 2013.

c) Life expectancy at birth rate has gone up

Leave a Comment