2

Chapter People as Resource

Overview India’s Green Revoluti on is a dramatic example of how the

The chapter 'People as Resource' is an Source: Planning Commission, Govt. of India.
effort to explain population as an asset
for the economy rather than a liability.
Population becomes human capital when
there is investment made in the form of
education, training and medical care.
In fact, human capital is the stock of
skill and productive knowledge embodied
in them.
'People as Resource' is a way of
referring to a country’s working people
in terms of their existing productive
skills and abilities. Looking at the
population from this productive aspect
emphasises its ability to contribute to
the creation of the Gross National
Product. Like other resources population
also is a resource — a 'human resource'.
This is the positive side of a large
population that is often overlooked when
we look only at the negative side,
considering only the problems of
providing the population with food,
education and access to health facilities.
When the existing 'human resource' is
further developed by becoming more
educated and healthy, we call it 'human
capital formation' that adds to the
productive power of the country just like
'physical capital formation'.
Investment in human capital
(through education, training, 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 higher productivity
of the more educated or the better trained
persons, as well as the higher
productivity of healthier people.

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 population need not be a burden for the
economy. It can be turned into a
productive asset by investment in human
capital (for example, by spending
resources on education and health for all,
training of industrial and agricultural
workers in the use of modern technology,
useful scientific researches and so on).
The two following cases illustrate how
people can try to become a more
productive resource:

Story of Sakal
There were two friends Vilas and
Sakal living in the same village
Semapur. Sakal was a twelve-year-
old boy. His mother Sheela looked
after domestic chores. His father Buta
Chaudhary worked in an agricultural
field. Sakal helped his mother in
domestic chores. He also looked after
his younger brother Jeetu and sister
Seetu. His uncle Shyam had passed
Picture 2.1
the matriculation examination, but,
Let’s Discuss was sitting idle in the house as he
had no job. Buta and Sheela were
• Looking at the photograph can you eager to teach Sakal. They forced him
explain how a doctor, teacher, engineer to join the village school which he
and a tailor are an asset to the soon joined. He started studying and
economy? completed his higher secondary
Not only do the more educated and examination. His father persuaded
the healthier people gain through him to continue his studies. He raised
higher incomes, society also gains in a loan for Sakal to study a vocational
other indirect ways because the course in computers. Sakal was
advantages of a more educated or a meritorious and interested in studies
healthier population spreads to those also from the beginning. With great vigour
who themselves were not directly and enthusiasm he completed his
educated or given health care. In fact, course. After some time he got a job
human capital is in one way superior to in a private firm. He even designed a
other resources like land and physical new kind of software. This software
capital: human resource can make use of helped him increase the sale of the
land and capital. Land and capital cannot firm. His boss acknowledged his
become useful on its own! services and rewarded him with a
For many decades in India, a large promotion.
population has been considered a liability
rather than an asset. But a large

People as Resource 17

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 Picture 2.2 Stories of Vilas and Sakal

Let’s Discuss
Story of Vilas
• Do you notice any difference between
Vilas was an eleven-year old boy the two friends? What are those?
residing in the same village as Sakal.
Vilas’s father Mahesh was a Activity
fisherman. His father passed away Visit a nearby village or a slum area
when he was only two years old. His and write down a case study of a boy
mother Geeta sold fish to earn money or girl of your age facing the same
to feed the family. She bought fish condition as Vilas or Sakal.
from the landowner’s pond and sold
it in the nearby mandi. She could In the two case studies we saw Sakal
earn only Rs 150 a day by selling fish. went to school and Vilas did not go. Sakal
Vilas became a patient of arthritis. was physically strong and healthy. There
His mother could not afford to take was no need for him to visit the doctor
him to the doctor. He could not go to frequently. Vilas was a patient of
school either. He was not interested arthritis. He lacked the means to visit
in studies. He helped his mother in the doctor. Sakal acquired a degree in
cooking and also looked after his computer programming. Sakal found a
younger brother Mohan. After some job in a private firm while Vilas
time his mother fell sick and there continued with the same work as his
was no one to look after her. There mother. He earned a meagre income like
was no one in the family to support his mother to support a family.
them. Vilas, too, was forced to sell In the case of Sakal, several years of
fish in the same village. He like his education added to the quality of labour.
mother earned only a meagre This enhanced his total productivity.
income. Total productivity adds to the growth of
the economy. This in turn pays an

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individual through salary or in some other
Economic Activities by Men and Women
form of his choice. In case of Vilas, there
could not be any education or health care Like Vilas and Sakal, people have been
in the early part of his life. He spends engaged in various activities. We saw that
his life selling fish like his mother. Vilas sold fish and Sakal got a job in the
firm. The various activities have been
Henceforth, he draws the same salary of
classified into three main sectors i.e.,
unskilled labourer as his mother.
primary, secondary and tertiary. Primary
Investment in human resource (via
sector includes agriculture, forestry,
education and medical care) can give high animal husbandry, fishing, poultry
rates of return in future. This investment farming, mining and quarrying.
on people is the same as investment in Manufacturing is included in the
land and capital. secondary sector. Trade, transport,
A child, too, with investments made communication, banking, education,
on her education and health, can yield health, tourism, services, insurance, etc.
a high return in future in the form of are included in the tertiary sector. The
higher earnings and greater activities in this sector result in the
contribution to the society. Educated production of goods and services. These
parents are found to invest more heavily activities add value to the national
income. These activities are called
on the education of their child. This is
economic activities. Economic activities
because they have realised the
have two parts — market activities and
importance of education for themselves. non-market activities. Market activities
They are also conscious of proper involve remuneration to anyone who
nutrition and hygiene. They accordingly performs i.e., activity performed for pay
look after their children’s needs for or profit. These include production of goods
education at school and good health. A or services, including government service.
virtuous cycle is, thus, created in this Non-market activities are the production
case. In contrast, a vicious cycle may for self-consumption. These can be
be created by disadvantaged parents,
who themselves uneducated and lacking
in hygiene, keep their children in a
similarly disadvantaged state.
Countries, like Japan, have invested
in human resource. They did not have any
natural resource. These countries are
developed/rich. They import the natural
resource needed in their country. How did
they become rich/developed? They have
invested on people, especially in the field
of education and health. These people
have made efficient use of other resources,
like land and capital. Efficiency and the
technology evolved by people have made
these countries rich/developed.
Picture 2.3 Based on the picture can you
classify these activities into three
sectors?
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 consumption and processing of primary Education helps individual to make better
product and own account production of use of the economic opportunities
fixed assets. available before him. Education and skill
are the major determinants of the earning
Activity of any individual in the market. A majority
ar to your residential area and note down the various acti viti es undertaken
of women by the people
have of that education
meagre village or colony.
and
bour what is their profession? In which of the three sectors will you categorise their formation.
low skill work? Women are paid
re economic or non-economic activities: low compared to men. Most women
t. Vilas cooks food for his family. work where job security is not there.
kal looks after his younger brother and sister. Various activities relating to legal
protection is meagre. Employment in this
sector is characterised by irregular
and low income. In this sector there is an
absence of basic facilities like maternity
leave, childcare and other social
security systems. However, women
with high education and skill formation
are paid at par with the men. Among the
organised sector, teaching and medicine
attract them the most. Some women have
entered administrative and other
services including job, that need high
levels of scientific and technological
competence. Ask your sister or your
Due to historical and cultural reasons classmate what she would like to take
there is a division of labour between men up as a career?
and women in the family. Women
generally look after domestic chores and
Quality of Population
men work in the fields. Sakal’s mother
Sheela cooks food, cleans utensils, washes The quality of population depends upon
clothes, cleans the house and looks after the literacy rate, health of a person
her children. Sakal’s father Buta indicated by life expectancy and skill
cultivates the field, sells the produce in formation acquired by the people of the
the market and earns money for the family. country. The quality of the poulation
Sheela is not paid for the services ultimately decides the growth rate of the
delivered for upbringing of the family. country. Literate and healthy population
Buta earns money, which he spends on are an asset.
rearing his family. Women are not paid
for their service delivered in the family.
Education
The household work done by women is
not recognised in the National Income. Sakal’s education in the initial years of
his life bore him the fruits in the later
Geeta, mother of Vilas, earned an
years in terms of a good job and salary.
income by selling fish. Thus women are
We saw education was an important input
paid for their work when they enter the
for the growth of Sakal. It opened new
labour market. Their earning like that of
horizon for him, provided new aspiration
their male counterpart is determined on and developed values of life. Not only for
the basis of education and skill. Sakal, education contributes towards the
20 Economics growth of society also. It enhances the

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 ...human being is a positive asset and
a precious national resource which
needs to be cherished, nurtured and
developed with tenderness and care,
coupled with dynamism. Each
individual’s growth presents a
different range of problems and
requirements. ... The catalytic action
Picture 2.4 School children of education in this complex and
dynamic growth process needs to be
national income, cultural richness and
planned meticulously and executed
increases the efficiency of governance.
with great sensitivity.
There is a provision made for providing
universal access, retention and quality in Source: National Education Policy, 1986.

Graph 2.1: Trends in Literacy Rates In Post-Independent India

Literacy rates

Year
Source: Census of India, Office of Registrar General, India,
2021 (censusofindia2021.com/literacy-rate-of-India)

elementary education with a special

emphasis on girls. There is also an
Let’s Discuss
establishment of pace setting of schools
like Navodaya Vidyalaya in each district. Study the graph and answer the following
Vocational streams have been developed questions:
to equip large number of high school 1. Has the literacy rates of the population
students with occupations related to increased since 1951?
knowledge and skills. The plan outlay on 2. In which year India has the highest
education has increased from Rs 151 literacy rates?
crore in the first plan to Rs 99,300 crore in 3. Why literacy rate is high among the
2020–21. The expenditure on education males of India?
as a percentage of GDP rose from 0.64% 4. Why are women less educated than men?
in 1951–52 to 3.1% in 2019–20 (B.E.) 5. How would you calculate literacy rate
and in India?
6. What is your projection about India’s
has remained stagnant around 3% from
past few years. The Budgetary Estimate literacy rate in 2025?
People as Resource 21

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 expansion of schools has been diluted by
Activity the poor quality of schooling and high
ng in your school or in your neighbouring co-ed school. dropout rates. “Sarva Siksha Abhiyan is a
significant
u with the data of boys and girls studying in the classroom. Study the difference if any andstep
explaintowards providing
for reasons in the classroom.
elementary education to all children in the
age group of 6–14 years by 2010... It is a
time-bound initiative of the Central
government, in partnership with the
States, the local government and the
community for achieving the goal of
universalisation of elementary education.”
Along with it, bridge courses and back- to-
as stated in the Budget Documents of school camps have been initiated to
Union State Governments, Reserve Bank increase the enrolment in elementary
of India, the expenditure on education as education. Mid-day meal scheme has
a percentage of GDP has declined to 2.8% been implemented to encourage
in 2020–21 (B.E.) The literacy rates have attendance and retention of children and
increased from 18% in 1951 to 85% in improve their nutritional status. These
2018. Literacy is not only a right, it is also policies could add to the literate
needed if the citizens are to perform their population of India.
duties and enjoy their rights properly. The Gross Enrolment Ratio (GER) in
However, a vast difference is noticed across higher education in the age group of 18
different sections of the population. to 23 years is 27% in 2019–20, which
Literacy among males is nearly 16.1% would be broadly in line with world
higher than females and it is about 14.2% average. The strategy focuses on
higher in urban areas as compared to increasing access, quality, adoption of
rural areas. As per 2011 census, literacy state-specific curriculum modification,
rates varied from 94% in Kerala to 62% in vocationalisation and networking on the
Bihar. The primary school system (I–V) use of information technology. There is
has expanded to over 7,78,842, lakh also focuse on distance education,
in 2019–20. Unfortunately this huge convergence of formal, non-formal,
distance and IT education institutions.
Table 2.1: Number of Institutions of Higher Education, Enrolment and Faculty
Year Number of Number of Students Teachers in Universities
Colleges Universities & Colleges
1950– 51 750 30 2,63,000 24,000
1990– 91 7,346 177 49,25,000 2,72,000
1998– 99 11,089 238 74,17,000 3,42,000
2010 –11 33,023 523 186,70,050 8,16,966
2012 –13 37,204 628 223,02,938 9,25,396
2014 –15 40,760 711 265,85,437 12,61,350
2015 –16 41,435 753 284,84,741 14,38,000
2016 –17 42,338 795 294,27,158* 14,70,190*
2017–18 41,012 851 366,42,378 12,84,957
2018–19 39,931 993 37,399,388 14,16,299
2019–20 44,374 1,236 38,275,207 12,07,204
Source: UGC Annual Report 2019–20 and Selected Educational Statistics, Ministry of HRD.
www.ugc.ac.in_Annual Report.2019–20.pdf
* Provisional Data from All India Survey on Higher Education, 2017–18, 2018–19.
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Over the past 60 years, there has been a to maximise his/her output to the overall
significant growth in the number of growth of the organisation. Indeed; health
university and institutions of higher is an indispensable basis for realising
learning in specialised areas. Let us read one’s well-being. Henceforth,
the table to see the increase in the improvement in the health status of the
number of college, universities, enrolment population has been the priority of the
of students and recruitment of teachers country. Our national policy, too, aims at
from 1951 to 2019–20. improving the accessibility of healthcare,
family welfare and nutritional service
with a special focus on the
Let’s Discuss underprivileged segment of the
Discuss this table in the classroom and population. Over the last five decades,
answer the following questions. India has built a vast healt infrastructure
1. Is the increase in the number of and has also developed the manpower
colleges adequate to admit the required at primary, secondary and
increasing number of students? tertiary sector in government, as well as,
in the private sector.
2. Do you think we should have more
number of universities? These measures, which have been
3. What is the increase noticed among adopted, have increased the life
the teachers in the year 2015–16. expectancy to over 69.4 years in 2016.
*Infant mortality rate (IMR) has come
4. What is your idea about future down from 147 in 1951 to 36 in 2020.
colleges and universities? **Crude birth rates have dropped to
20.0 (2018) and ***death rates to 6.2
Health (2018) within the same duration of
Firm maximise profit: Do you think any time. Increase in life expectancy and
firm would be induced to employ people improvement in childcare are useful
who might not work efficiently as healthy in assessing the future progress of the
workers because of ill health? country. Increase in longevity of life is
The health of a person helps him to an indicator of good quality of life
realise his/her potential and the ability marked by self-confidence. Reduction
to fight illness. He/She will not be able in infant mortality involves the
protection of children from infection,
ensuring the nutrition of both the
mother and the child, and childcare.
Source: National Health Profile, 2021
mohfw.gov.in (office of Registrar General &
Census Commission, India MoHA (accessed on
29.09.2021)

Let’s Discuss

Study Table 2.2 and answer the following

questions.
1. What is the percentage increase in
dispensaries from 1951 to 2020?
Picture 2.5 Children standing in queue for 2. What is the percentage increase in
health check-up doctors and nursing personnel from
1951 to 2020?
* Infant mortality rate is the death of a child below one year of age.
** Birth rates is the number of babies born for every 1,000 people during a particular period of time.
*** Death rate is the number of people per 1,000 who die during a particular period of time.
People as Resource 23

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 Table 2.2: Health infrastructure over the years

2014 2015 2016 2017 2018 2019

H SC/PHC/CHC 182,709 184,359 185,933 187,505 189,784 1,78,548

Dispensaries 29,715 29,957 30,044 31,641 31,733 31,986

and Hospitals (under Ayush
Management)

Beds (Govt.) 675,779 754,724 6,34,879 710,761 713,986 818,396

36,355 41,711 44,934 43,581 22,567 29,799

Registered Doctor in
(registered (registered
Medical Council
allopathic allopathic doctor
doctor at at PHCs)
PHCs)
2,621,981 2,639,229 2,778,248 2,878,182 2,966,375 12,01,393
Nursing Personnel (2020)
(ANM+RN&RM+LHV)
Abbreviation(s): SC: Sub centre, PHC: Primary Health Centre, CHC: Community Health Centre. ANM: Auxiliary
Nurse Hydrides, RN&RM: Registered Nurses & Registered Midwives, LHV: Lady Health Visitors.
Source: National Health Policy, 2016, 2017, 2018, 2020, Central Bureau of Health Intelligence, Ministry of
Health and Family Welfare.)

3. Do you think the increase in the How many doctors are there in the hospital?
number of doctors and nurses is How many nurses work in that hospital?
adequate for India? If not, why? Besides, try to gather the following additional information:
How many hospitals are there in your locality?
4. What other facilities would you like to
How many dispensaries are there in your locality?
provide in a hospital?
5. Discuss about the hospital you have
visited?
6. Can you draw a graph using this table.
There are many places in India which
do not have even these basic facilities.
There are only 542 medical colleges in the
country and 313 dental colleges. Just four Unemployment
states, like Andhra Pradesh, Karnataka,
Sakal’s mother Sheela looked after the
Maharastra and Tamil Nadu have the domestic chores, children and helped her
maximum number of medical colleges. husband Buta in the field. Sakal’s
brother, Jeetu, and sister, Seetu, spend
Activity their time playing and roaming. Can you
a nearby hospital, either government or private and note down the call
following details. or Jeetu or Seetu
Sheela
many beds are there in the hospital you have visited? unemployed? If not, why?
Unemployment is said to exist when
people who are willing to work at the going
wages cannot find jobs. Sheela is not
interested in working outside her
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domestic domain. Jeetu and Seetu are too
small to be counted in the work force phenomenon. Many youth with
population. Neither Jeetu, Seetu or Sheela matriculation, graduation and post
can be counted as unemployed. The graduation degrees are not able to find
workforce population includes people from job. A study showed that unemployment
15 years to 59 years. Sakal’s brother and of graduate and post-graduate has
sister do not fall within this age group so increased faster than among
they cannot be called unemployed. Sakal’s matriculates. A paradoxical manpower
mother Sheela works for the family. She situation is witnessed as surplus of
is not willing to work outside her domestic manpower in certain categories coexist
domain for payment. She too cannot be with shortage of manpower in others.
called unemployed. Sakal’s grandparents There is unemployment among
(although not mentioned in the story) technically qualified person on one hand,
cannot be called unemployed. while there is a dearth of technical skills
In case of India we have unemployment required for economic growth.
in rural and urban areas. However, the Unemployment leads to wastage of
nature of unemployment differs in rural manpower resource. People who are an
and urban areas. In case of rural areas, asset for the economy turn into a liability.
there is seasonal and disguised There is a feeling of hopelessness and
unemployment. Urban areas have mostly despair among the youth. People do not
educated unemployment. have enough money to support their
Seasonal unemployment happens family. Inability of educated people who
when people are not able to find jobs are willing to work to find gainful
during some months of the year. People employment implies a great social waste.
dependant upon agriculture usually face Unemployment tends to increase
such kind of problem. There are certain economic overload. The dependence of the
busy seasons when sowing, harvesting, unemployed on the working population
weeding and threshing is done. Certain increases. The quality of life of an
months do not provide much work to the individual as well as of society is adversely
people dependant on agriculture. affected. When a family has to live on a
In case of disguised unemployment bare subsistence level there is a general
people appear to be employed. They have decline in its health status and rising
agricultural plot where they find work. withdrawal from the school system.
This usually happens among family Hence, unemployment has detrimental
members engaged in agricultural activity. impact on the overall growth of an
The work requires the service of five economy. Increase in unemployment is an
people but engages eight people. Three indicator of a depressed economy. It also
people are extra. These three people also wastes the resource, which could have been
work in the same plot as the others. The gainfully employed. If people cannot be
contribution made by the three extra used as a resource they naturally appear
people does not add to the contribution as a liability to the economy.
made by the five people. If three people In case of India, statistically, the
are removed the productivity of the field unemployment rate is low. A large
will not decline. The field requires the number of people represented with low
service of five people and the three extra income and productivity are counted as
people are disguised unemployed. employed. They appear to work
In case of urban areas educated throughout the year but in terms of their
unemployment has become a common potential and income, it is not adequate
for them. The work that they are pursuing
People as Resource 25

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seems forced upon them. They may the secondary or the tertiary sector. In
therefore want other work of their choice. the secondary sector, small scale
Poor people cannot afford to sit idle. They manufacturing is the most labour-
tend to engage in any activity irrespective absorbing. In case of the tertiary sector,
of its earning potential. Their earning various new services are now appearing
keeps them on a bare subsistence level. like biotechnology, information technology
and so on.
Let us read a story to know how people
could become an asset for the economy of
a village.

Story of a Village
There was a village inhabited by
several families. Each family
produced enough to feed its members.
Each family met its needs by the
members making their own clothes
and teaching their own children. One
of the families decided to send one of
its sons to an agriculture college. The
Picture 2.6 Can you remember how much did boy got his admission in the nearby
you pay when you asked him to college of agriculture. After some time
mend your shoes or slippers? he became qualified in agro-
engineering and came back to the
Moreover, the employment structure village. He proved to be so creative
is characterised by self-employment in the that he could design an improved
primary sector. The whole family type of plough, which increased the
contributes in the field even though not yield of wheat. Thus a new job of
everybody is really needed. So there is agro- engineer was created and filled
disguised unemployment in the in the village. The family in the village
agriculture sector. But the entire family sold the surplus in a nearby
shares what has been produced. This neighbouring village. They earned
concept of sharing of work in the field and good profit, which they shared
the produce raised reduces the hardship among themselves. Inspired by this
of unemployment in the rural sector. But success all the families after some
this does not reduce the poverty of the time held a meeting in the village.
family, gradually surplus labour from They all wanted to have a better
every household tends to migrate from the future for their children too. They
village in search of jobs. requested the panchayat to open a
Let us discuss about the employment school in the village. They assured the
scenario in the three sectors mentioned panchayat that they would all
earlier. Agriculture, is the most labour send their children to school. The
absorbing sector of the economy. In panchayat, with the help of
recent years, there has been a decline in government, opened a school. A
the dependence of population on teacher was recruited from a nearby
agriculture partly because of disguised town. All the children of this village
unemployment discussed earlier. Some of started going to school. After
the surplus labour in agriculture has sometime one of the families gave
moved to either training to his daughter in

26 Economics

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tailoring. She started stitching consume. Now they could sell what they produced to others w
clothes for all the families of the
village for everyone now wanted to
buy and wear well-tailored clothes.
Thus another new job, that of a tailor
was created. This had another
positive effect. The time of the
farmers in going far for buying clothes
was saved. As the farmers spent
more time in the field, the yield of
the farms went up. This was the
beginning of prosperity. The farmers
had more than what they could

Summary
You have seen how inputs like education and health helped in making people an
asset for the economy. The chapter also discusses about the economic activities
undertaken in the three sectors of the economy. We also study about the problem
associated with unemployment. Finally the chapter ends with the story of a
village which formally had no job but later had plenty.

Exercises
1. What do you understand by 'people as a resource'?
2. How is human resource different from other resources like land and
physical capital?
3. What is the role of education in human capital formation?
4. What is the role of health in human capital formation?
5. What part does health play in the individual’s working life?
6. What are the various activities undertaken in the primary sector, secondary
sector and tertiary sector?
7. What is the difference between economic activities and non-economic activities?
8. Why are women employed in low paid work?
9. How will you explain the term unemployment?
10. What is the difference between disguised unemployment and seasonal
unemployment?
11. Why is educated unemployed, a peculiar problem of India?
12. In which field do you think India can build the maximum employment
opportunity?
13. Can you suggest some measures in the education system to mitigate the
problem of the educated unemployed?
14. Can you imagine some village which initially had no job opportunities but
later came up with many?
15. Which capital would you consider the best — land, labour, physical capital
and human capital? Why?

People as Resource 27

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 References

GARY, S. BECKER. 1966. Human Capital: A Theoretical and Empirical Analysis with
Special Reference to Education, General Series. Number 80. New York.
National Bureau of Economic Research.
THEODORE, W. SCHULTZ. 'Investment in Human Capital'. American Economic Review.
March 1961.
Economic Survey 2015–2016. Ministry of Finance, Government of India, New Delhi.
India Vision 2020. The Report. Planning Commission. Government of India,
New Delhi.
Mid-Term Appraisal of the Tenth Five Year Plan (2002–2007). Planning Commission,
Part II. New Delhi.
Tenth Five Year Plan ( 2002–2007). Planning Commission, New Delhi.
Twelth Five Year Plan ( 2012–2017). Planning Commission, New Delhi.
NCERT. 2016. Trilingual Dictionary of Economics, p. 62.

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