Title Chapter 2 People as Resource.pdf ✅

ECONOMICS Chapter 2: People as Resource
(1) PEOPLE AS RESOURCE 02 People as Resource Human Resource Population is an asset for the economy rather than a liability. Population becomes human capital when an investment is made in the form of education, medical care and required training. Population has an ability to contribute to the creation of the Gross National Product. Overview People as Resource is a way of referring to a country’s working people in terms of their existing productive skills and abilities. Like other resources, the population is also considered as a human resource. When the existing ‘human resource’ is further developed by becoming more educated and healthier, it is called human capital formation. Investment in human capital (through education, training, medical care) yields a return just like investment in physical capital. Human capital is superior to other resources like land and physical capital. Total productivity adds to the growth of the economy. Investment in human resource (via education and medical care) can give high rates of return in future. Countries, like Japan, Investment in Physical Capital Investment in human capital yields a return just like investment in physical capital. Highly educated, better trained and healthier people are highly productive for an economy. Human capital is superior to other resources such as land and physical capital. Human resource can make use of land and capital, but land cannot be useful on its own. One who invests in shares and bonds expects higher returns in the future. Similarly, a child’s education and health investment can yield a high return in the future in the form of higher earnings and contribution to society. When parents realise the importance of children’s education, a virtuous cycle is created. In contrast, a vicious cycle is created by disadvantaged parents who did not look after their children’s education and health. Economic Activities by Men and Women Economic activities have been classified into three main sectors. The primary sector
(2) PEOPLE AS RESOURCE 02 includes agriculture, forestry, animal husbandry, fishing, poultry farming and mining. Quarrying and manufacturing are included in the secondary sector. Trade, transport, communication, banking, education, health, services etc. are included in the tertiary sector. These sectors contribute value to the national income. Sectors under economic activities (i) Primary Sector (ii) Secondary Sector (iii) Tertiary Sector (i) Primary Sector It is also known as agriculture sector. This sector considers directly using of natural resources. This sector includes agriculture, forestry, animal husbandry, fishing, poultry farming, mining, and quarrying. (ii) Secondary Sector It is also known as manufacturing sector. This sector considers manufacturing of goods.
(3) PEOPLE AS RESOURCE 02 (iii) Tertiary sector This sector provides service. This sector includes trade, transport, communication, banking, education, health, tourism, services, insurance. Activities Economic activities have two parts: Market and non-market activities. • Market activities are the activities performed to earn income or the activities performed for pay or profit. For example, production of goods and services (including government service). • Non-market activities are the production of goods and services for self-consumption. Division of Labour between Men and Women Most women are less educated and less skilled. Women are paid lower than men. Women are not paid for their services rendered to the family. However, women with high education are paid at par with men. Quality of Population Illiteracy rate, life expectancy rate and skills acquired by the people determine the quality of population. These also decide the growth rate of an economy. Education Education provides a way towards the growth of an economy. It improves national income, cultural richness and increases the efficiency of governance. Many educational provisions are made to provide quality education for all. Statistical Figures • Educational outlay was Rs 151 crore in the first plan, and it has increased to Rs 43,825 crore in the tenth plan. • The expenditure on education as a percentage of GDP has increased from 0.64% in 1951 to 3.98% in 2002–03. • The literacy rate has increased from 18% in 1951 to 65% in 2001.