Research On India’s Human Capital Formation And Its Economic Growth Effects

The world economy today is transforming from the traditional three-industry economic pattern to a new economic pattern characterized by deep changes and integration of technologies,industries,models,and formats.In this process,in addition to the gradual shift of management focus from traditional elements such as price and quality to new elements such as innovation,creativity,and credibility,the economic resources that economic and social development depend on are also gradually shifting from traditional elements such as land,labor,and capital to knowledge,information,ability,health and other new elements change.In other words,human capital elements such as knowledge,information,skills,and health are becoming basic,critical,and strategic resources for economic growth and development.Human capital refers to the sum of various elements that are contained in the human body and can create value in the form of scientific knowledge,labor skills,management capabilities,and health quality.Economists such as W.Schultz and Becker pointed out that the future of mankind does not depend on space,energy or arable land,but on the development of human intelligence.A large number of contemporary economists also believe that land,machinery and equipment,and factories are no longer the fundamental source of wealth creation for countries,regions and enterprises,and only human capital is the core kinetic energy for economic and social development.Undoubtedly,talents are becoming the most important support for today’s knowledge-based economic society.Human capital elements are becoming the fundamental source for countries,regions,and enterprises to gain competitive advantages.How to promote the rapid formation and accumulation of human capital to promote economic growth and development is becoming the focus of competition among countries,regions and enterprises.China is transitioning from a rapid economic growth to a new development stage of high-quality economic growth.High-quality economic development means transforming the mode of economic development,transforming the driving force of economic growth,and adjusting and optimizing the economic structure.In this case,all sectors of society,including the government should attach great importance to the leading role of human capital in cognition,fully integrate the resources of the whole society in action to build a strong human capital support system.Under such circumstances,this article takes the formation of human capital and its economic growth effect as the research theme,and responds to the concerns of the times by exploring the internal logic of human capital formation and the interaction mechanism with economic growth.India is the second most populous country in the world next to China,with obvious advantages in terms of age structure,language exchanges,policies and measures to promote education and healthy development,which has brought about huge potential of the rapid formation and accumulation of human capital in India.However,whether these advantages really play a role in promoting the formation of human capital in India and promoting economic growth,the academic community has not reached a consensus.Proponents believe that the development of education and health in India has been successful since its independence.It has cultivated a large number of technical talents with high technical level,rich management experience and proficiency in English,especially in the fields of information technology and biomedicine who have contributed to the rapid development of India’s information technology and biomedical industries.Opponents believe that since independence,due to insufficient government investment,the development of education and health in India has generally failed to promote the formation of human capital and promote economic growth,and it has not played a role in improving the overall quality of the population and the country’s competitiveness.In this case,this article takes India as the research object,and closely focuses on the following issues,such as “the relationship between the scale and structure of factor expenditures for the formation of human capital in India and the economic growth of India","the relationship between two different technological progress paths(independent innovation and imitative innovation)and the formation of human capital and economic growth","the relationship between human capital-biased and material capital-biased technological progress and India’s human capital formation and economic growth","the main factors affecting the formation and accumulation of human capital in India","the experience and lessons of the education and health policies implemented by the Indian government in promoting the formation of human capital and promoting economic growth",so as to provide reference for the current China to build a human capital support system that is compatible with the high-quality economic development.Through in-depth research,this paper has reached the following important conclusions:(1)the scale of human capital formation and expenditure structure(especially public expenditure and private expenditure structure)are important factors that affect economic growth.(2)The economic growth effect of human capital is affected by the source of technological progress(independent innovation and imitative innovation)and the bias of technological progress(partial human capital and partial material capital).(3)The scale of factor expenditure and expenditure structure of India’s human capital formation are important explanatory variables for India’s economic growth.(4)The economic growth effect of human capital in India is generally insignificant.The main influencing factors are: first,insufficient investment in education and health human capital;second,irrational public investment and private structure of education and health human capital,especially the formation of public investment of health human capital is relatively small while the private investment is relatively high;thirdly,the investment in higher education is relatively high,while the investment in primary education and secondary education is insufficient;fourthly,the serious loss of overseas talents in India.(5)India’s education and health policies have been poorly implemented,and many policy goals in the previous five-year plans have been difficult to achieve as scheduled.(6)Imitating the innovative technological path is more conducive to the formation of human capital and economic growth in India,while the technological advancement that tends towards human capital is not conducive to the formation of human capital and economic growth in India.Some of India’s policies or initiatives in the field of education and health aimed at promoting the formation of human capital and promoting economic growth have achieved remarkable results,but some have not been satisfactory.India’s experience or lessons are of great reference significance for China’s current human capital system and the building of a human capital highland compatible with high-quality development.The enlightenment is mainly reflected in the following aspects: the first is the implementation of deepening the reform of the education system,the removal of the system and mechanism obstacles that restrict the development of education,adherence to the socialist direction of education modernization in our country,observing to the principles of public welfare,fairness and people’s nature of education,and opposition to all forms of educational capitalization,educational rights,and educational privatization tendency.The second is to further increase financial investment in education and health undertakings to provide the material foundation for the rapid formation of high-quality human capital.The third is to optimize the structure of human capital investment,promote the fair development of education and health,and gradually solve multiple structural problems of education and health resource allocation of our country in the public investment and private investment,urban,rural and regional investment,"personal" and "property" investment,and different levels of investment to promote the balanced development of education and medical care.The fourth is to persist in focusing on independent innovation while taking into account the path of imitating innovative technological progress,and continuously strengthen and enhance the ability of independent innovation,that is,the ability of independent innovation of ideas,independent innovation of systems,independent innovation of strategies,and independent innovation of technology.The fifth is to improve the talent development environment,provide an employment environment and an industrial development environment that match high-quality human capital,improve the salary system,and effectively respond to the outflow of talents and promote the return of talents.The innovations of this article are: first,a 4*4*2 mathematical model is constructed theoretically,which enriches and develops the connotation of modern endogenous growth theory from the perspective of human capital.Secondly,in empirical methods,the MRW expansion model is used to empirically analyze the economic growth effect of India’s human capital formation scale(stock),and the VAR model is constructed to conduct empirical analysis on the economic growth effect of India’s human capital formation structure(flow).The third is the innovation of research conclusions.For example,mathematical model analysis shows that under the assumption of independent innovation-type technological progress,expanding the scale of human capital formation(including public expenditure and private expenditure)or expenditure structure(that is,increasing public investment),the economic growth effect of technological progress biased towards the formation of human capital is greater than the growth effect of technological progress biased towards material capital.The empirical analysis based on the MRW model also shows that the economic growth effect formed by human capital in India is very close to the economic growth effect formed by physical capital.Besides,in recent years,the marginal output of the formation of human capital has exceeded that of the formation of physical capital,which indicates that the formation of human capital in India is of greater significance to the promotion of Indian economic growth.However,the empirical analysis based on the VAR model shows that the economic growth effects of both the formation of educational human capital in India and the formation of health human capital in India are not significant because of their small scale.Therefore,There is still a lot of room for improvement in the scale of factor input for human capital formation(especially the increase in public investment)to accelerate India’s economic growth and so on.Limited by the ability,this research also has many shortcomings.Several issues are needed to be paid attention to in the future: adding the non-homogeneity assumption of the human capital formation mechanism of education and health activities,distinguishing the difference between high-end human capital and low-end human capital,and adding R&D and migration into the formation of human capital factors,etc.