Academic journal article Political Economy Journal of India

Role of Services Exports from India on Human Capital Formation in Kenya (Africa)

Academic journal article Political Economy Journal of India

Role of Services Exports from India on Human Capital Formation in Kenya (Africa)

Article excerpt

Human capital refers to the productive qualities that activate the labor force. The productive qualities are education, knowledge, health and skills. Human capital formation is the process of increasing the productive qualities or abilities of labor force by providing more education, increasing skills, health and nutrition level. For proper utilization of manpower resources, a country should impart proper education to its population and train its labor force in technology, engineering, management, medicine and many other fields connected with the development of various sectors of the economy.

A country should have rational manpower planning for the development of its human resources. Manpower planning indicates future planning of human resources for meeting the present as well as future development needs of the economy. It should acquire data regarding the quantity and quality of manpower requirements, to employ them in all the sectors and sub sectors of the economy. T.W. Schultz (1971), stated five ways of developing human resources (i) Health facilities and services, broadly conceived to include all expenditure that affect the life expectancy, strength and stamina, vigor and vitality of the people (ii) In and on-the-job training, including apprenticeships organized by firms (iii) Formally organized education at the elementary, secondary and higher levels (iv) Study programmes for adults that are not organized by firms, including extension programmes notably in agriculture (v) Migration of individuals and families to adjust to changing job opportunities.

Human Capital Formation

Most of the underdeveloped countries are suffering from low rate of economic growth which is again partially resulted from lack of investment in human capital. These nations are facing mainly two basic problems, i.e. lack of critical skills which are very much needed for the industrial sector and a surplus labor force, thus human capital formation seeks to solve these problems by creating necessary skills in man, as a productive resource and also to provide gainful employment.

Effective use of physical capital is, "to staff new and expanding government services, to introduce new system of land use and new methods of agriculture, to develop new means of communication, to carry forward industrialization and, to build the education system., innovations, increase life expectancy, improve quality of life and to control population".

Role of Services for Human Capital Formation

Services play an important role in all modern economies. A resilient service sector, by increasing availability of services, may boost economic growth; enhance industrial performance and human capital formation.Services constitute the largest sector in the global economy, accounting for 70 percent of global GDP, 60 percent of global employment and 46 percent of global exports measured in value-added terms. WTO statistics show that the share of developing economy services exports increased from 24 percent in 2005 to 32 percent in 2015, and the share of LDCs in global services exports increased from 0.4 percent in 2005 to 0.8 percent in 2015. Increased services exports from the LDCs are an important contributor to meeting the sustainable development goals of doubling the exports from LDCs by 2020.

Service sector is the key driver of India's economic growth. This sector contributed around 66.1 percent of its Gross Value Added growth in 2015-16, thereby becoming an important net foreign exchange earner. India's service sector has matured considerably during the last few years and has been globally recognized for its high growth and development. This sector has been growing at an annual growth rate of about 35 percent during the last 5 years. Government of India has enabled India to build up a huge and versatile cadre of professionals with expertise and skills across a vast and wide-ranging spectrum of disciplines like Health Care, Tourism, Education, Engineering, Communications, Transportation, Information Technology, Banking, Finance, Management and a host of others. …

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