The education sector is essential to the overall development of a nation. Educated citizens bring wealth and prosperity to their country. Education has always been the most critical factor in deciding the success of a country.
Every country tends to improve the education of its citizen so that they can help in the betterment of the country. Global leaders from different countries are fascinated by the world’s largest democracy and how a country like India functions with so many complications.
Indian leaders understand the key to achieve massive success and boost the economy is to strengthen the Indian education system. Below are some of the most prominent ways in which education can boost the economic growth of India.
Education Improves Human Capital Of The Country
The concept of human capital came from Adam Smith in the 18th Century. Human capital is the set of knowledge, social, and personality traits of the country’s citizens that produce economic value. It is one of the most important aspects of calculating the overall success rate of a country.
Some of the essential factors that determine human capital are listed below:
- Education levels
- Skills and qualifications
- Emotional intelligence
- Work experience
- Social skills – communication
- Intelligence
- Judgement
At present, India does not stand a good position in the world’s human capital index. There is a strong need of the hour to improve human capital so that our overall economic growth can gain momentum. There are a lot of measures that the Indian government is taking to improve the human capital of the country.
Human capital and economic growth have a lot in common. The idea behind Human capital is that if we invest in educating the people, it will directly improve their productivity and hence boost the economy of the country. There is a fundamental relation between human capital and economic growth, and education plays a vital role in improving both.
Education Increases Consumer Spending
Consumer spending is the items that a person purchases to meet their basic needs and live a good life. The cost of fundamental things like food and medicines are unavoidable expenses. These are the items that an individual is bound to purchase no matter how worse their financial condition.
Every one of us is a consumer, and everything that we purchase creates a demand in the market. This demand allows companies to produce more and more goods while hiring more and more skilled workers. Education plays a significant role in altering the spending habit of consumers.
As consumer’s education increases, they tend to increase their spend on items like clothes, cars, home appliances, and many more. All of this increased spending creates a positive ripple effect leading to boost employment in various industries. Increased spending also leads to higher GDP growth throughout the economy.
The increased demand is directly proportional to the increased GDP of the country. Educated citizens tend to have a better quality of life by buying expensive things and services. All of these expenses helps in the overall economic growth of the country.
Education Increases Business Investments
As the GDP increases because of the increase in consumer spendings, it leads to improvements in the business position. The increase in demand makes companies more profitable, and they tend to invest some part of their profits in the development of the company. These investments can include the purchase of new equipment or investment in new technology.
The investments made to improve business are called capital investment, and they positively affect the economic growth of the country. These investments are likely to boost the productivity and profits of the company in the long run.
The Indian government has introduced GST to boost the Indian economy. Though there are some disadvantages of gst, it is still critically important to pay your taxes on time to avoid any penalties. Businesses can use the gst invoice format in excel download to process different purchases in the right manner.
Spending On Children’s Education Helps In GDP
The economic growth of any country is measured by the rise or a decline in its Gross Domestic Product( GDP), and education plays a very significant role in the same. Apart from the government schemes for providing free education to those who can afford it, it also encourages others to send their children to school and colleges.
Spending on children’s education is a long term investment that everyone must acknowledge. The cost of education is different at different levels. For instance, the cost of elementary schooling is much lesser than that of college or higher studies.
The money spent on fees and other resources not only helps children to get educated but also prevents schools and colleges from going bankrupt. Every penny spent on your child’s education is the contribution to a better economy of the country.
As suggested by Niti Ayog, India should spend at least 6% of its GDP on education by 2022. It will ultimately help in improving the human capital and the overall economic growth of the country.
Educational Schemes By The Indian Government
The Indian government has been investing a lot since its independence to improve its education sector. There have been numerous government educational schemes that have allowed poor people to provide education to their children despite financial challenges.
The primary reason behind these schemes is to improve the literacy rate and encourage education among citizens. Some of those revolutionary schemes are listed below:
Sarva Shiksha Abhiyan (SSA)
This program is the most significant educational project in India. It was introduced in 2001 to provide universal elementary education. SSA primarily focuses on the children of the age group 6 to 14 and all social classes.
Midday Meal Scheme
This scheme was passed in 1995 to provide a mid-day meal to primary class students. The Indian government introduced these schemes to eliminate classroom hunger and increase attendance.
Right to Education (RTE) Act
RTE is another impactful scheme launched by the Indian government in 2009 to made education for 6 to 14 years olds a fundamental right. This act also set rules for elementary schools in the country.
Beti Bachao, Beti Padhao
It is one of the most famous educational government schemes for girls, introduced in 2015. The main aim of this scheme was to protect the girl child from female foeticide and later provide capital for their education.
Conclusion
These are some of the most critical roles the education sector plays in the economic growth of India. Our country still needs a lot to expand the education sector, and it is every citizen’s responsibility to encourage everyone to get educated for the betterment of our country.
