Chapter 2: People as Resource
Introduction: People as a Resource
People as Resource refers to viewing the population as an asset for the economy rather than a burden.
Human Capital: When people are educated, trained, and healthy, they contribute productively to the economy. Investment in education and healthcare leads to the formation of human capital.
Productivity: A more skilled and educated population increases productivity and contributes to the nation’s income, just like investments in land and physical capital.
Human Capital Formation
Investment in People: Just like investments in physical capital (machinery, land), investments in human capital (education, training, healthcare) yield returns in the form of higher incomes and productivity.
Examples:
Green Revolution: Increased agricultural productivity through advanced farming techniques.
IT Revolution: Skilled individuals in information technology have significantly contributed to India’s economy.
Education and Health
Importance of Education: Education is a key factor in enhancing human capital. A more educated workforce is more productive and earns higher incomes.
Health as a Resource: Healthy individuals are able to work efficiently. Healthcare investments improve the well-being and productivity of the population.
Stories of Vilas and Sakal
Sakal: A boy who received an education and training in computer programming. He became productive and secured a job, contributing to the economy.
Vilas: A boy who did not receive an education due to poverty and ill health, and therefore had to continue his family’s low-paying work.
Comparison: The story shows how education and health create opportunities for individuals to become productive resources, while a lack of these leads to a cycle of poverty.
Economic Activities
Types of Activities:
Primary Sector: Agriculture, forestry, fishing, mining.
Secondary Sector: Manufacturing and industrial activities.
Tertiary Sector: Services like trade, transport, communication, education, healthcare.
Economic vs. Non-Economic Activities: Economic activities are those that result in income, such as farming or working in a factory. Non-economic activities, like household chores, do not generate income but are still essential.
Unemployment
Definition: Unemployment exists when people who are willing to work cannot find jobs.
Types of Unemployment:
Seasonal Unemployment: Common in agriculture, where people cannot find work during certain seasons.
Disguised Unemployment: More people are working than necessary, as seen in agriculture, where family members share limited work.
Educated Unemployment: Even people with degrees may not find jobs suitable for their qualifications, a growing issue in India.
Impact of Unemployment
Economic Impact: Unemployment leads to a waste of human resources and affects the economy negatively, as fewer people are productively engaged.
Social Impact: It creates feelings of hopelessness and can lead to poverty, poor health, and lack of education for the unemployed.
Quality of Population
Determining Factors: Literacy rate, health status (life expectancy), and skill levels decide the quality of the population.
Better Quality = Better Economic Growth: A more educated and healthier population contributes to the nation’s development and prosperity.
Conclusion
People as Resource emphasizes the importance of viewing population as an asset when investments in education and health are made.
Human Capital Formation boosts a nation’s productivity and growth, while failure to invest in people results in poverty and unemployment.
