Human capital refers to the stock of skill and expertise of a nation at a point of time. It is the aggregate of skills and expertise. It is the process of adding to the stock of human capital over time. Economists use this concept to signify personal characteristics that are useful in the process of production.
It takes account of areas such as skills, employee knowledge, know-how, merit goods including education and health. It has a very significant bearing upon the level of income, output, and employment indicating that economic returns are very high for human capital investments.
At low levels of educational attainment there are significantly high returns for human capital formation. While as at high levels of educational attainment there are significantly low returns. At low levels of educational attainment the quality of human capital is low and at high levels of educational attainment the quality of human capital is high.
Rapidly rising population adversely affects the quality of human capital in under developed and developing economies of the world like India. It reduces per head availability of existing facilities like sanitation, employment, drainage, water system, education, hospitals, nutrition, food supply, roads, and, electricity.
Those facilities which are used by the members of the society free of cost or at nominal rates are termed as Social Overhead Capital. It gets affected by the poor quality of human capital. There is inefficient manpower planning in less developed countries where no efforts have been made either to raise the standard of education at different stages or to maintain the demand and supply of technical labour force. It is a sad reflection on the wastage of human power and human skill thereby negatively affecting employment in particular and human development in general.
The process of human capital formation and human development are a long term process because skill formation takes lot of time. Thus, the process which produces skilled manpower is slow in less developed countries like India. This also lowers our job competitiveness in the international market of human capital. It reduces our employment prospects. It is estimated that by 2025, 70% of Indians will be of working age.
It could give India edge over developed economies of the world where skills are high. But, it can turn dangerous if the majority of the population under working age remains unemployed as a result of lack of skills. Therefore, in light of this scenario it is very important to promote skill development as much as possible in the policy and decision making. Skill development department in this regard can play a very pivotal role.
Skill Development department came into existence in 1981 including both Polytechnics and Industrial Training Institutes (ITI’s). As far as Polytechnic Institutes are concerned, they were then under the Higher Education Department before the formation of the Department of Skill Development. One of the important missions of skill development department is to improve the quality of Vocational Training by way of providing better content and educational tools.
This has a dual role: On one hand, it creates human capital and on the another hand, it improves employment prospects. Improving the evaluation system has always proved beneficial for human capital formation and employment. It creates healthy competition among the institutions and prepare the students towards academic and life excellence. Resources promote economic development and human capital is most important resource that improves growth and development prospects of an economy.
It is very important to overcome critical gaps in resources through networking the institutions so as to ensure desired outcomes. It will definitely create good interaction between human capital and employment.
Moreover, keeping in view the ongoing educational unemployment in India in general and J&K in particular, there is need for promotion of Research and Development in institutions for inculcating good entrepreneurial culture.
Equally important is to encourage the Industry–Institute Linkage for the reason that there is a complementarity between the two. It is high time to extend the coverage of Skill Education in Jammu and Kashmir especially backward low skill regions both by creating new and better infrastructure and optimally utilizing the existing infrastructure.
Dr. Binish Qadri, Former Assistant Professor, Cluster University, Srinagar