Human Capital Index

India has been ranked at a lowly 100 position on the global Human Capital Index, which measures countries on development and deployment of human capital. What do you understand by Human Capital? Examine its importance and reasons for low ranking of India in the said index. (200 Words)

Human capital is a collection of resources—all the knowledge, talents, skills, abilities, experience, intelligence, training, judgment, and wisdom possessed individually and collectively by individuals in a population.
    1. Better human capital provides high productivity and efficient usage of resources.
    2. It promotes innovation and creativity in problem solving, cutting cost and time, providing a competitive edge to the economy
    3. Better human capital enjoys better living standards and high national income
Reasons for low ranking:
    1. Even though educational indicators have improved at primary, secondary and higher level. The quality has not improved. Human capital created is not able to meet the requirements and challenges of the country
    2. Less employment opportunities in organised sector is pushing the informal sector which is marred with lack of credit, poor productivity and innovation. This leads to social insecurity and low level of income.
    3. Still more than 50% employment is in agriculture sector, lack of development in manufacturing sector leads to low demand of skilled workers.
    4. Less importance to vocational education, skill development etc. has created scarcity of skilled labour
    5. Less public expenditure in education and social sectors.
    6. Brain drain – educated & qualified people leave India for greener pastures instead of working among people in India and provide solutions to Indian problems.
    7. High regional and gender inequality in labour participation and skilling
    8. Human capital is viewed as vote bank during elections instead of an asset by our leadership. (false promise of creating jobs, providing reservations or creating new universities during elections for appeasing the public)
    9. Historical factors such as colonization, caste system which hindered the growth of a creative mind among Indians who are busy with trivial issues like caste and religion instead of focusing on growth and development.
    10. Malnutrition among children will result in unproductive human capital in future.
    11. Inefficient use of reservations.
    12. corruption: adversely affects implementation of developmental policies; so benefits of development are unable to flow to masses



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