What are the sources of human capital? Highlight the role that human capital plays in the economic growth of a country.

Population becomes human capital when investment is made in education, training, and medical care.

India is the world’s most populous country, but looking at the population from a productive perspective emphasizes its ability to play an important role in the economic growth of the country.

The quality of a population depends upon the literacy rate, health of a person as indicated by life expectancy, and skill formation acquired by the people of the country.

Education: By providing quality education and industry-specific training, we can increase the quality of the population. This will solve the problem of unemployment to some extent by providing quality industry-specific training. Investment in the number of colleges and universities and recruitment of teachers can be a greater source of turning the population into human capital.

Health: In a highly populated country, people must be educated about the health and prevention of disease. Social awareness is the greatest weapon a country has. Investment in healthcare institutions, hospitals, and health awareness programs is the backbone of the economic growth of the country.

Investment in human capital through education, training, and medical care yields a return just like investment in physical capital. This can be seen directly in the form of higher incomes earned because of the higher productivity of more educated or better-trained people, as well as the higher productivity of healthier people.

India’s Green Revolution is a dramatic example of how the input of greater knowledge in the form of improved production technologies can rapidly increase the productivity of the land. India’s IT revolution is another example of how human capital has come to acquire a higher position than that of material, plant, and machinery.

Hence, human capital can turn the challenges of a population into solutions for the economic growth of a country.