NCERT Solutions for Class 12 Indian Economic Development Chapter 5 MCQ with complete explanation and answers for session 2022-2023. Students of class 12 Economics can get chapter 5 Human Capital Formation in India multiple choice questions and extra question answers here for exams.

Class 12 Indian Economic Development Chapter 5 MCQ


What percentage of GDP was invested in education in the year 1952

[A]. 0.65
[B]. 0.64
[C]. 6.04
[D]. 5.06

Which programme started in 1994

[A]. Kasturba Gandhi Balika Vidyalaya
[B]. District Primary Education Programme
[C]. Sarva Siksha Abhiyan
[D]. Mid-Day Meal

Human Capital consists of

[A]. Entrepreneurs
[B]. Workers
[C]. Both workers and entrepreneurs
[D]. Entire population

GER stands for

[A]. General enrolment ratio
[B]. Gross enrolment ratio
[C]. General estimated ratio
[D]. Gross education ratio

State of Human capital formation in India

We have already learnt that human capital formation is that the outcome of investments in education, health, on-the-job coaching, migration and data. Of those education and health are important sources of human capital formation. We all know that India may be a federal country with a union government, state governments and native governments (Municipal Firms, Municipalities and Village Panchayats). The Constitution of India mentions the functions to be allotted by every level of presidency. Consequently, expenditures on each education and health are to be allotted at the same time by all the 3 tiers of the government.

Union and State level Organisations

In India, the ministries of education at the union and state level, departments of education and varied organisations like National Council of Educational Research and Training (NCERT), University Grants Commission (UGC) and All India Council of Technical Education (AICTE) facilitate establishments that return beneath the education sector.

Similarly, the ministries of health at the union and state level, departments of health and varied organisations like National Medical Commission and Indian Council for Medical Research (ICMR) facilitate establishments that return beneath the health sector. In a very developing country like India, with an outsized section of the population living below the line of poverty. Many of us cannot afford to access basic education and health care facilities.

Class 12 Indian Economic Development Chapter 5 Important Question Answers

What are the two major sources of human capital in a country?

The two major sources of human capita are Education and Health Industry. Education is sought not only as it confers higher earning capacity on people but also for its other highly valued benefits: it gives one a better social standing and pride; it enables one to make better choices in life; it provides knowledge to understand the changes taking place in society; it also stimulates innovations. Like education, health is also considered as an important input for the development of a nation as much as it is important for the development of an individual. Who can work better? a sick person or a person with sound health? A sick labourer without access to medical facilities is compelled to abstain from work and there is loss of productivity. Hence, expenditure on health is an important source of human capital formation.

What do you understand by Gender Equality in education?

The differences in literacy rates between males and females are narrowing signifying a positive development in gender equity; still the need to promote education for women in India is imminent for various reasons such as improving economic independence and social status of women and also because women education makes a favourable impact on fertility rate and health care of women and children. Therefore, we cannot be complacent about the upward movement in the literacy rates and we have miles to go in achieving cent per cent adult literacy.

Define Human capital and human development.

The two terms sound similar but there is a clear distinction between them. Human capital considers education and health as a means to increase labour productivity. Human development is based on the idea that education and health are integral to human well-being because only when people have the ability to read and write and the ability to lead a long and healthy life, they will be able to make other choices which they value. Human capital treats human beings as a means to an end; the end being the increase in productivity. In this view, any investment in education and health is unproductive if it does not enhance output of goods and services. In the human development perspective, human beings are ends in themselves.

India is a knowledge economy. How?

The Indian software industry has been showing an impressive record over the past two decades. Entrepreneurs, bureaucrats and politicians are now advancing views about how India can transform itself into a knowledge-based economy by using information technology (IT). There have been some instances of villagers using e-mail which are cited as examples of such transformation. Likewise, e-governance is being projected as the way of the future. The value of IT depends greatly on the existing level of economic development.

How does Physical and Human capital differ?

The two forms of capital differ in terms of mobility across space. Physical capital is completely mobile between countries except for some artificial trade restrictions. Human capital is not perfectly mobile between countries as movement is restricted by nationality and culture. Therefore, physical capital formation can be built even through imports, whereas human capital formation is to be done through conscious policy formulations in consonance with the nature of the society and economy and expenditure by the state and the individuals.

Super Specialty Health Care and Better Education

A considerable section of India’s population cannot afford to succeed in super specialty health care and better education. Moreover, once basic education and health care is taken into account as a right of the voters, then it’s essential that the govt ought to give education and health services freed from price for the worthy voters and people from the socially burdened categories. Both, the union and state governments, are stepping up expenditures within the education sector over the years so as to fulfil the target of accomplishing cent per cent acquirement and significantly increase the average academic attainment of Indians.

Class 12 Indian Economics Chapter 5 Multiple Choice Questions


The indicator of the status of education of a country is

[A]. Population rate
[B]. Death Rate
[C]. Birth rate
[D]. Literacy rate

In which state the per capita expenditure on the elementary education is highest?

[A]. Kerala
[B]. Karnataka
[C]. Himachal Pradesh
[D]. Maharashtra

Machines and buildings are

[A]. Human capital
[B]. Physical capital
[C]. Natural capital
[D]. None of the above

Literacy refers to

[A]. All urban people
[B]. All rural educated people
[C]. All educated people
[D]. Ability to read and write
Education sector in India

Growth in Government Expenditure on Education: Does one savvy lot of the govt spends on education? This expenditure by the govt is expressed in 2 ways that (i) as a share of ‘total government expenditure’ (ii) as a share of Gross Domestic Product (GDP). The percentage of ‘education expenditure of total government expenditure’ indicates the importance of education within the theme of things before the govt.

The share of ‘education expenditure of GDP’ expresses that what proportion of people’s financial gain is being committed to the event of education within the country. Throughout 1952-2014, education expenditure as share of total government expenditure enlarged from 7.92 to 15.7 and as the share of Gross Domestic Product enlarged from 0.64 to 4.13.

Rise in Education Expenditure

Throughout this era the rise in education expenditure has not been uniform and there has been irregular rise and fall. To the present if we have a tendency to embrace the non-public expenditure incurred by people and by philanthropic establishments, the overall education expenditure ought to be a lot higher. Elementary education takes a serious share of total education expenditure and therefore the share of the higher/tertiary education (institutions of upper learning like faculties, polytechnics and universities) is that the least. The govt spends less on tertiary education, ‘expenditure per student’ in tertiary education is over that of elementary.

This doesn’t mean that monetary resources ought to be transferred from tertiary education to elementary education. As we have a tendency to expand faculty education, we’d like additional lecturers who are trained within the higher academic institutions; so, expenditure on all levels of education ought to be enlarged.

In 2014-15, the per capita public expenditure on elementary education differs significantly across states from as high as ₹34,651 in Himachal Pradesh to as low as ₹4088 in Bihar province. This results in variations in academic opportunities and attainments across states.