Human resource refers to abilities, skills and expertise of human beings to contribute to the process of value addition in the economy. Human capital refers to 'stock and expertise' of a nation at a point of time.
Human capital formation is the process of adding skills to individual which will add to the stock of human capital. In order to transform the liability of the huge size of population into assets adoption of various measures for human capital formation is very much essential.
In order to develop various sectors of economy,a country should plan for development of manpower by proper planning. The important factor for human capital formation is skill formation,and skill formation is a time consuming process which demands a long term policy for human capital formation.
There are numerous ways of adding stock of human capital like:
EXPENDITURE ON EDUCATION
Government expenditure on education is key and most important factor for human capital formation. It is most effective way of raisinga productive and efficient workforce. Education enhances knowlege and skills of individual by providing required set of skills which industry demand.
GOVERNMENT EXPENDITURE ON HEALTH
"A sound mind in a sound body" is an old saying. Government expenditure on health makes a man more efficient and therefore more productive. A healthy citizen will work more efficiently than unhealthy one.
STUDY PROGRAMMES FOR ADULTS
Study programmes for adults that are organized by firms,to enhance knowledge of their employees. These courses will basically teach them basic skills that are required to carry their jobs efficiently.
HUMAN CAPITAL AND ECONOMIC GROWTH
There is strong positive correlation between human capital and economic growth. We know that labor skill of an educated person is more than that of uneducated person and that former generates more income than the latter. economic growth means increase in real income of a countryIndia recognized importance of human capital in economic growth long ago. Human resources development has necessarily to be assigned a key role in any development strategy,particularly country with large population.
CHALLENGES FOR HUMAN CAPITAL FORMATION
RISING POPULATION
Rapidly rising population adversely affects the quality of human capital. this is because it reduces per head availability of the existing facilities relating to housing, sanitation, drainage, water system,hospitals, education, power supply. Reduced availability of these facilities lead to fall in quality of life.
BRAIN DRAIN
Migration of person to a developed country is a serious threat to the process of human capital formation of a underdeveloped and developing countries. Those who decide to migrate are person of high caliber such as scientists, administrators, executives, executives, engineers ,physicians etc.
LOW ACADEMIC STANDARDS
Low academic standard is also a major concern of economic development of country. The Indian education pyramid is steep, indicating lesser and lesser number of people reaching the higher education level. Moreover the level of unemployment among educated is also higher.
INSUFFICIENT ON THE JOB TRAINING IN THE PRIMARY SECTOR
Primary sector is the backbone of Indian economy. Unfortunately,it has not received due attention of professional skills. We kept following traditional methods in primary sector.
CONCLUSION
The economic and social benefits of human capital foration is well known.
India has a rich stock of scientific and technical manpower in the world . The need of the hour is to utilizing its resources efficiently to generate more resources in which skills and expertise of countries population will contribute equally.
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