Economics (NCERT) Notes

5.2 Human Capital and Economic Growth

Deutsche Bank Report


• It’s report on ‘Global Growth Centres’ was published on 1.7.05


• The report identified that India will emerge as one among four major growth centres in the world by the year 2020.


• It further states, “Our empirical investigation supports the view that human capital is the most important factor of production in today’s economies. Increases in human capital are crucial to achieving increases in GDP.”


 


World Bank Report


• World Bank, submitted its report, ‘India and the Knowledge Economy - Leveraging Strengths and Opportunities’.


• It states that India should make a transition to the knowledge economy and if it uses its knowledge as much as Ireland does (it is judged that Ireland uses its knowledge economy very effectively), then the per capita income of India will increase from a little over US $1000 in 2002 to US $ 3000 in 2020 (It is presently only $2000).


• It further states that the Indian economy has all the key ingredients for making this transition, such as,


    • a critical mass of skilled workers,


    • a well-functioning democracy and


    • a diversified science and technology infrastructure.


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