CBSE Class 12 Economics Human Capital Formation in India Worksheet Set A

Question. five year plan recognized the importance of Human Capital
(a) Seventh
(b) Third
(c) Eight
(d) Sixth
Answer: A

Question. Which of the following is not a source of Human Capital Formation?
(a) Expenditure on Infrastructure
(b) Expenditure on Education
(c) Expenditure on On-the-job training
(d) Expenditure on Migration
Answer: A

Question. In the year Indian Government made free and compulsory education for age group of 16 to 14 years?
(a) 2001
(b) 2009
(c) 2003
(d) 2007
Answer: B

Question. What is the full form of ICMR?
(a) International Council of Medical Research
(b) India Council of Medical Resources
(c) International Council of Medical Resources
(d) Indian Council for Medical Research
Answer: D

Question. Which one of the following is a reason for poor human capital formation in India?
(a) Brain drain
(b) Insufficient resources
(c) High Growth of Population
(d) All of these
Answer: D

Question. refers to the stock of skill, ability, expertise, education and knowledge embodied in the people
(a) Human Resource
(b) Physical Capital
(c) Human Capital
(d) None of these
Answer: C

Question. In India, which of the following organizations regulate the health sector?
(a) ICMR
(b) UGC
(c) AICTE
(d) None of these
Answer: A

Fill in the blanks:

Question. ______The newly emerging jobs are found mostly in the sector.
Answer: Services

Question. A establishment with four hired worker is known as ______.
Answer: Informal establishment

Question. Investment on Education is considered as one of the main source of______ .
Answer: Human capital formation

Question. _______directly increases the supply of healthy labour force.
Answer: Health Expenditure

Question. Human Capital is in nature_______.
Answer: active

Question. _______insisted upon education and training through variety of works including craft.
Answer: Mahatma Gandhi

Question. Majority of workforce reside in area ______in our country.
Answer: Rural

Question. The construction workers are known as _______.
Answer: Casual wage labourers 

Question. When a worker is engaged by some one and paid his/her wages on regular basis is known as ______.
Answer: Regular Salaried employees

Question. _______is the main source of employment for majority of workers in India.
Answer: Primary sector 

Question. Expenditure on education is _______expenditure.
Answer: productive

Question. ______is an important programme for availability of education to all.
Answer: Sarva Siksha Abhiyaan

True or False:

Question. Less women are found in regular salaried employment.
Answer: True

Question. Physical capital helps in formation of human capital.
Answer: False

Question. Medical Tourism is great opportunity for India.
Answer: True

Question. Raj is going to school when he is not in school, you will find him working in his farm, thus he is considered as worker.
Answer: False

Question. Literacy rates in India have increased but so has the absolute number of illiterates.
Answer: True

Question. Gambler is considered as worker.
Answer: False

Question. Education and health both do not increase the income capacity of population.
Answer: False

Question. Meena is a house wife. Besides taking care of household chores, she works in the cloth shop which is owned and operated by her husband. She is considered as self employed worker.
Answer: True

Question. Indian economy is marching ahead towards progress.
Answer: True.

Question. Investors are reluctant to invest in tidal energy projects ?
Answer: True

Question. Components of human capital and human development are complementary to each other.
Answer: True

Question. Bangaluru in Karnataka is referred to as Silicon Valley of India, as it is the hub of IT based industries.
Answer: True.

Question. Match the following : 

Answer: 1. (d), 2. (b), 3. (a), 4. (c)

Question. Match the following :

Answer:1. (c) 2. (b), 3. (a) 4. (d).

Question. Match the following : 

Answer: 1.(e), 2.(a), 3.(d), 4.(b), 5.(c).

Short Answer Type Questions

Question. Explain the term infrastructure.
Answer: The term infrastructure refers to the underlying tangible and organisational structures that are essential for the smooth and prosperous functioning of an economy. In other words, infrastructure is regarded as a core support system that enables an economy to grow and develop. Generally, the term infrastructure means technical structure such as roads, transport communication, bridges, dams, power, public institutions like schools, hospitals etc. There structures not only serve as basic input for various economic activities like production, investment, but also enables an economy to break the shackles of traditional and primitive social structures and customs. Infrastructure as a support system develops the quality of human capital by imparting quality and technical education and health facilities.

Question. What is the difference between Human Capital and Human Development?
Answer: Human Capital Vs Human Development:
• It considers education and health as a means to increase the labour productivity, while according to human development, education and health are integral to human well-being.
• Human Capital treats human beings as a means to increase in productivity, while according to human development, human beings ends in themselves.

Question. What is meant by environment ?
Answer: Environment is defined as the total planetary inheritance and the totality of all resources. It includes all the biotic (e.g., birds, animals, plants, forests, etc.) and abiotic (e.g., water, sun, land, mountains, etc.) factors that influence each other.

Question. What is the difference between physical capital and human capital ?
Answer: Physical Capital
(i) It increases physical goods.
(ii) It is an economic and technical process.
(iii) Physical capital is tangible.
(iv) It can be sold in the market.
(v) The physical capital is separable from its owner.
(vi) Physical capital formation can be built even through imports. Human Capital
(i) It increases knowledge and efficiency.
(ii) It is partly a social process.
(iii) Human capital is intangible.
(iv) It can’t be sold in the market.
(v) Human capital is not separable from its owner.
(vi) Human capital formation is to be done through conscious policy formulations.

Question. Who is a worker ? Explain
Answer: (i) People work for earning their livelihood. A person who is involved in production activity contributing to the flow of goods and services in the economy is called a worker. In other words, a worker is regarded as an economic agent who contributes to the production of goods and services, thereby, to the GDP during a particular year.
(ii) A worker renders services to others and receives rewards in the form of wages, salaries or in any kind.
(iii) When an individual is engaged in a production activity or is self employed and contributes to the generation of GDP, then, that person is referred to as a worker. For example, a doctor, an engineer working in a factory, etc.

Question. Name the two government organizations that regulate the Health and Education sector.
Answer: Health Sector:
• Ministries of Health at the Central and at State level
• Indian Council for Medical Research (ICMR)
Education Sector:
• Ministries of Education at the Union and State level
• National Council of Educational Research and Training (NCERT)

Question. Rail and roads are complementary to each other. Explain ?
Answer: Rail and roads are complementary to each other, which means road system links up cultivators with the local market and with the nearest railway station, whereas railways provide connecting links between the area of production and the consumers. If roads provides door to door links, railway links up long routes. Thus, both the major means of transport should be complementary rather than competitive to each other. If at all, these are becoming competitive in certain areas, government should devise such a National Transport Policy, so as they work in a coordinated manner.

Question. How is human development a broader term as compared to human capital ?
Answer: (i) Human development is a broader term as compared to human capital because human capital is a means to an end whereas human development is an end in itself. Human capital considers education and health as a means to make human being a good productive person. Human capital is a means to an end where means implies skills that are used in the process of production and end denotes the consequent increase in the productivity. The higher level of output can be achieved through extensive application of human capital.
(ii) On the other hand, human development is an end in itself which refers to the holistic development of the individuals. The development can be possible only by acquiring good education and attaining good health. Therefore, education and health are the two main features of human development. Human development occurs when majority of the people in the economy are educated and healthy. Thus, the end signifies the development of an individual via education and health. Therefore, we can conclude that human development is a broader term as compared to human capital.

Question. What is the difference between Physical Capital and Human Capital?
Answer: Physical Capital:
• It can be easily sold in the market
• It depreciates with the passage of time.
• It is more mobile between countries
• It can be separated from its owner
• It can be built through imports
Human Capital:
• It cannot be sold in market
• Depreciation in Human Capital can be reduced by making continuous investments in education and health
• It is less mobile between countries
• It cannot be separated from the owner
• Human Capital formation is to be done through conscious policy formulations.

Question. What factors contribute to human capital formation?
Answer: The factors contribute to human capital formation are as follows :
(i) Expenditure on education
(ii) On-the-job training
(iii) Migration
(iv) Expenditure on health
(v) Expenditure on information

Question. What are the various forms of Health Expenditure?
Answer: These five are the forms of Health Expenditure:
• Preventive medicine • Vaccination
• Curative medicine • medical intervention during illness
• Social Medicine • spread of health literacy
• Provision of clean drinking water
• Good Sanitation facilities

Question. What are the functions of the environment ?
Answer: The four important functions of environment are :
(i) It supplies resources (both renewable and non-renewable).
(ii) It assimilates wastes.
(iii) It sustains life by providing genetic and bio-diversity.
(iv) It provides aesthetic services like scenery etc.

Question. What are the two major sources of human capital in a country ?
Answer: Human capital refers to the stock of skill and expertise of a nation at a point of time. The two major sources of human capital in a country are :
(i) Education,
(ii) Health Education and health are considered as an important input for the development of a nation. A better educated person has greater skills and knowledge and therefore greater opportunity to work and earn higher income. Similarly, a healthy person is an asset for the nation as he is more productive than a sick person, who is unable to work efficiently due to bad health. Hence, expenditure on education and health is an important source of human capital formation.

Question. Describe any three cause of poor health in India.
Answer: Following are three causes of poor health in India:
(i) High Birth Rate and Rapid Growth of Population : It has created a number of health risks. Population growth has made it difficult to provide safe or sufficient water supply, garbage disposal and sanitation for the community.
(ii) Malnutrition : Widespread malnutrition has contributed to the number of health problems including infections and diseases among children.
(iii) Unsanitary Conditions and Housing : A large number of people live in poor households located in crowded and unsanitary surroundings. People face the problem of contaminated food, water and soil, insufficient personal hygiene and sewage disposal. A sizeable population lives in sub standards dwellings lacking in space, ventilation and sunlight.

Question. Define worker-population ratio.
Answer: (i) Worker-population ratio is defined as the proportion of population that is actively contributing to the production of goods and services. It is measured by the ratio between the country’s workforce and its total population.
(ii) This ratio acts as an indicator for assessing the employment level in a particular country at any point of time. Higher the worker population ratio, higher is the engagement of people in the productive activities and vice-versa. 
(iii) Worker population ratio is estimated by dividing the total work force by the total population and multiplying by 100.

Question. Give the names of health care institutions in rural areas.
Answer: Health care institutions in rural areas are as follows:
(i) Primary health centres.
(ii) Sub-centres to provide family planning services.
(iii) Community health centres.
(iv) Multipurpose worker’s scheme.
(v) Village health guides.
(vi) National Rural Health Mission (NRHM)

Question. ‘Education plays a significant role in economic development’. Discuss.
Answer: Following points show that education plays a significant role in economic development :
(i) Education increases the receptivity of people to modern and scientific ideas. Thus, education increases the efficiency of people.
(ii) It results in greater awareness of available opportunities and mobility of labour.
(iii) It imparts to people knowledge, skills and attitude which would enable them to contribute to the productive programmes.
(iv) It produces the skilled and trained personnel needed by the economy. Education prepares individuals as human resources.

Question. What are the main problems of human capital formation in India?
Answer: There are two main sources of human capital formation :
(i) Education
(ii) Health The main problems are as under : Problems of Educational System :
(i) Unbalanced development
(ii) Wastage of resources.
(iii) Examination system
(iv) Expensive higher education system.
(v) Lack of funds.
(vi) Uneven per capita expenditure. Problems of Health :
(i) Uneven distribution of medical facilities.
(ii) Mismatch between infrastructure and trained personnel.
(iii) Lack of appropriate referral system.
(iv) Poor sanitary conditions.

Question. Explain natural resources.
Answer: Natural resources are the resources which have been provided by the nature in the form of land, air, water, forests, animals, sunshine, etc. Natural resources are free gifts of nature. They are foundation of the prosperity of a country. Natural resources may be of two types :
(i) Exhaustible natural resources.
(ii) Inexhaustible natural resources.

Question. What are the various forms of Human Capital Formation?
Answer: These below 7 are the forms of Human Capital Formation:
• Insufficient resources
• Serious inefficiencies
• Brain-drain
• High Growth of Population
• Several Imbalances
• Lack of proper Man-power planning
• Weak Science and Technology

Question. How do infrastructure facilities boost production?
Answer:
(i) Infrastructure-social and economic, facilitates production. The role of infrastructure in economic production can be understood well by the following example : If agriculture is devoid of irrigation facilities then it would entirely depend on the monsoon that may hamper its production and productivity.
(ii) As irrigation is necessary to enhance the productivity of agricultural sector, in the same manner infrastructure is essential for the smooth and efficient production of all sectors of the economy. Similarly, industrial production in the absence of proper means of transportation may lead to delays in the movement of raw materials, capital goods and finished goods. This in turn leads to delays in the production process and, thereby, hampers industrial production. 1 (iii) Infrastructure is the necessary condition for higher productivity and higher production.

Question. ‘India is going to be a knowledge based economy in the near future’. Discuss.
Answer: India is soon emerging as a knowledge bank. World Bank in its recent report states that India should make a transition to be knowledge economy and if it uses its knowledge as much as Ireland does, then the per capita income of India will increase from a little over US $ 1000 in 2002 to US $ 3000 in 2020. The Indian software industry has been showing an impressive record over the past decade. The use of e-mail, e-governance and development of information technology shows that India is slowly transforming itself into a knowledge based economy.

Question. How is the government expenditure on education expressed? Which in your opinion is a better measure ?
Answer: Government expenditure on education can be expressed in two ways :
(i) As a percentage of total government expenditure,
(ii) As a percentage of Gross Domestic Product (GDP).
The measure as a percentage of GDP is a better measure since, it sets fixed targets rather than variable government expenditure. 

Question. How does both education and health lead the nation towards higher economic growth ?
Answer:
(i) Educated person can contribute to economic growth more than that of uneducated person, Infact skills of an educated person are more. Education changes the outlook of a person. Educated labour force adopts new technologies easily. It increases the production, as a result, higher rate of economic growth is achieved. (ii) Investment in health keeps labourers healthy and enables them to work for a long period. A sick person always abstains from work and therefore, there is loss of productivity. But healthy person contributes in production resulting higher rate of economic growth.
In this way, both education and health increases the income capacity of a person. It creates human capital formation which further leads to higher economic growth rate.

Question. ‘India has abundant natural resources’. Substantiate the statement.
Answer: India has abundant natural resources in the terms of rich quality of soil, hundreds of rivers and tributaries, lush green forests, plenty of mineral deposits, vast stretch of Indian Ocean, ranges of mountains, etc. The black soil of the Deccan Plateau is suitable for cultivation of cotton. The Indo-gangetic plains are the most fertile regions in the world. India’s forests provide green cover for its population and wild life. Large deposits of iron-ore, coal and natural gas are found in the country.

Question. Why are children not included in working population?
Answer: Working population means able-bodied persons and adults. Children are unable to perform productive activities. Use of children in work is equivalent to denying them childhood. Children’s right to playing and schooling should be respected. It is doubly criminal to turn them into dull adults and old persons. In every civilised society, children’s rightful place is school and playground. Hence, children are not included in working population for the purpose of employment.

Question. Children below 15 years of age and the old people beyond 60 years are not considered while counting the number of unemployed. Do you agree?
Answer: Yes, I agree with this statement because these persons cannot become part of labour force even when they are able and willing to work.

Question. What are the three basic sources of generating power ?
Answer:
(i) The three basic sources of generating power are thermal, hydro electricity and nuclear power.
(ii) The thermal power uses heat energy as its base for the production of electricity.
(iii) Hydroelectric power involves production of electricity through the use of kinetic force of falling water.
(iv) Nuclear power involves the use of sustained nuclear fission to generate electricity. The thermal sources, hydro electric sources and nuclear power accounts for 70%, 28% and 2% of the power generation capacity respectively in India.

Question. Do you think that in the last 50 years, employment generated in the country is commensurate with the growth of GDP in India ? How ?
Answer: Economic growth implies growth in the GDP i.e., growth in the aggregate output produced during an accounting period within the domestic territory of an economy. The increased output level is achieved by generating more employment opportunities and through employing better technology.
During the recent past, India has witnessed jobless economic growth that raised the aggregate output level without the proportionate rise in the employment opportunities, and consequently, unemployment continued to exist. The reason is that the rise in GDP is caused by employing modern and improved technology that substituted labour with machinery. This failed to generate new employment opportunities in the industrial and the tertiary sector. Thus, the industrial and the tertiary sector failed to absorb the excess labour from the agricultural sector. As a result, disguised unemployment in the agricultural sector continued along with low levels of productivity and massive poverty. In addition to this, MNC’s that played an important role in India’s economic growth provided employment only to the educated and specialised workforce. These MNC’s aimed at achieving higher output levels by employing better technology rather than generating greater employment opportunities. Thus, employment generated in the country does not commensurate with the growth of GDP in India.

Question. A skilled worker like software professional generates more income than an unskilled worker. Why?
Answer: A skilled worker generates more income than an unskilled worker mainly because the productivity of an educated and skilled person is higher than an unskilled one. A skilled worker also commands a higher earnings or gainful employment. This is because they cannot be substituted with another since, it takes years to generate a manpower which is skilled in a particular field. On the other hand, an unskilled worker like a rickshaw puller can be easily substituted and such workers easily compromise on lesser earnings.

Question. How population growth is the cause of depletion of natural resources?
Answer: Population growth is the cause of depletion of natural resources. More the number of people, more the demand for goods and services needed to satisfy wants. As the population increases, more natural resources are required to produce goods and services and also requires more land for housing and agriculture. Increasing population has led to more extraction of natural resources from the environment.

Question. What are the various non-commercial sources of energy ?
Answer: The sources of energy that are generally available free to the users and that do not have a recognised market are referred to as non-commercial energy. This form of energy is used for domestic and for consumption purposes. 
For example : firewood, agricultural waste, animal waste (cow dung), etc. These goods neither command a price nor have established market.

Question. ‘Indian education system is considered faulty from the employment angle’. Do you agree Explain.
Answer: Yes, I agree with this statement. Indian education system is largely irrelevant to the Indian economy. There is no linkage between education and employment opportunities. After completing their school and college education, for a number of years, men and women remain unemployed because they do not have practical training and useful skills. Most of the students do not gain any occupational and vocational training. Hence, the Indian education system is considered faulty from the employment angle.

Question. What is the impact of health and medical facilities in India ?
Answer:
(i) Birth rate fell down from 40 per thousand in 1951 to 20.4 per thousand in 2016.
(ii) Death rate fell from 27 per thousand in 1951 to 6.4 per thousand in 2016.
(iii) Infant mortality rate reduced from 146 in 1951 to 34 in 2016.
(iv) Life expectancy increased from 32 years in 1951 to 68.56 years in 2016.

Question. Compared to the 1970s, there has hardly been any change in the distribution of workforce across various industries. Comment.
Answer: India being as agrarian economy has majority of population dependent on the agricultural sector to earn their livelihood. Although, the development strategies in India have aimed at the reduction of population dependence on agriculture, yet the reduction in the population engaged in agricultural sector has not been significant. In 1972-73, about 74% of the work force was engaged in primary sector which reduced to 48.9% in 2011-2012. On the other hand, the shares of secondary and tertiary sector in employment rose from 11% to 24% and 15% to 27% respectively. The workforce distribution indicates that over the last four decades i.e., from 1972-2012, people have moved from self-employment and regular-salaried employment to casual wage worker. This particular pattern of moving from self-employ-ment and regular-salaried employment to casual wage work is termed as casualisation of workforce. Thus it can be concluded that although changes in the distribution of workforce have taken place, yet industrial and tertiary sector need to increase their share in the workforce distribution by generating more employment opportunities and absorbing ex-cess labour from the agricultural sector.

Question. Explain the term ‘affluence trap’.
Answer: Affluence means economic well being. Trap is something in which we get caught and we can not escape out of it. Affluence trap means environmental degradation trap. With affluence or economic well being more natural resources are used up causing environmental problems. In the rich countries of the developed world, the high level of consumption associated with the high level of income is using up natural resources at a fast pace. As a consequence, these countries are getting trapped into a situation of severe environmental degradation.

Question. What is the significance of energy ? Differentiate between commercial and non-commercial sources of energy.
Answer: Energy is the most important component of economic infrastructure. It is a critical aspect of the development process of a nation. It is essential for industries as no commodity is produced without using energy. Now a days, energy is used even in the agricultural sector. It is needed to operate tube-wells, tractors and thrashers. It is also required in houses for cooking. One cannot even think of a day without electricity and other sources of energy like petrol LPG, etc. So, we can say that energy is life line of the entire production activity. 

Question. There is a downward trend in inequality worldwide with a rise in the average education levels. Comment.
Answer:
(i) There is a negative relationship between education level and degree of inequality. This relationship has been practically established across the world in recent decades.
(ii) Education not only imparts technical skills but also at the same time enhances productivity of a person. An educated person, endowed with higher productivity and efficiency enjoys relatively higher income earning capacity. The higher income earning capacity and greater acceptability of modern techniques raise the standard and quality of living.
(iii) Distribution of income has become less skewed and gap between the rich and the poor has been narrowing slowly. Gradually, the importance of education is being realised worldwide and consequently, governments of different countries have been investing heavily in the education sector. With the rise in average education levels, not only inequality but also other problems like, poverty, under-utilisation of resources and inferior standards and quality of life have been minimised.

Question. What are the indicators of educational achievement in a country .
Answer.
Adult and female education :
in order to eradicate illiteracy among the adults, special arrangements have been made for adult education . Importantly National literacy mission was set up in 1988 . Since 1976 formal education program has been launched it AIMS at providing meaningful education to the youth of the age group of 15 to 25 years. In order to provide technical education to the women many womens polytechnics have also been established. ‘Women education council’ is a significant step to promote education among women
Elementary education:
Elementary education covers students from class 12 8 in the age group of 6 to 14 years. The number of primary and middle schools has considerably increased.
Total literacy campaign:
National literacy mission was launched to render everybody literate in the country. Please programme has been recast as ' saakshar Bharat ' videshi Central focus on female education. The program cover all those in the age group of 15 and above .

Question. Bring out the differences between human capital and human development.
Answer: While human capital focuses on investment in education and health sector to increase productivity and efficiency of workforce on the other hand, human development focuses on investment in education and health sector to increase the general well-being and standard and quality of living of human capital.

Question. how is human capital formation helpful in reducing inequality of income .
Answer. human capital formation is an important means of reducing inequality of income. Higher the rate of human capital formation greater would be the rate of participation. Increase in the rate of participation would lead to increase in the share of wages in national income. Accordingly inequality would reduce.

Question. Education is considered to be an important input for the development of a nation how.
Answer.
1. Education produces responsible citizens.
2. It develops science and technology
3. It facilitates the use of natural and human resources of all regions of the country.
4. It explains mental horizon of the people.
5. It helps economic development through greater participation of the people in the process of growth and development.
6. It develops cultural standards of the citizens.
7. It develops human personality

Question. Explain how educational planning is necessary for human capital formation.
Answer.
1. Education produces responsible citizens.
2. It develops science and technology
3. It facilitates the use of natural and human resources of all regions of the country.
4. It explains mental horizon of the people.
5. It helps economic development through greater participation of the people in the process of growth and development.
6. It develops cultural standards of the citizens.
7. It develops human personality.

Question. How is health a source of human capital formation.
Answer. Expenditure on health: “ a sound mind in a sound body “ is an old saying . expenditure on health makes a man more efficient and therefore more productive. Is contribution to the production process tends to rise. He adds more to GDP of the nation then a sick person . Expenditure on health and therefore is an important determinant of human capital formation .

Question. Do you agree with the statement that human resource has developed into the main economic factor?
Answer. Yes I agree with the statement because of followings reason :
1. Change in emotional and material environment of growth: human capital formation and generates a change in emotional and material environment of growth.
A) emotional environment becomes conducive to growth as people tend to to acquire growth-oriented attitude and aspirations .
B) material environment becomes helpful to growth as the society now possesses higher number of skilled and trained workers to implement the plans and programmes of economic growth.
2. Higher productivity of physical capital: human capital formation increases productivity of physical capital. Specialised engineers skilled workers can certainly handle machines better than the others .
3. Innovative skills: human capital formation facilitates innovations the undercurrent of growth and development. Larger the number of skilled and trained personnel, greater the possibilities of innovations in the area of production and related activities. Innovation is the lifeline of growth.
4. Higher rate of participation and equality: by enhancing productive capacities the labour force, human capital formation induces greater employment. This increased the rate of participation.

Question. What is your opinion should be the principle of objectives of education in India?.
Answer.
1. Education produces responsible citizens.
2. It develops science and technology
3. It facilitates the use of natural and human resources of all regions of the country.
4. It explains mental horizon of the people.
5. It helps economic development through greater participation of the people in the process of growth and development.
6. It develops cultural standards of the citizens.
7. It develops human personality

Please click on below link to download CBSE Class 12 Economics Human Capital Formation in India Worksheet Set A