Question

Evaluate the following statements about Human Capital Theory and India’s human development trajectory: I. Human Capital Theory, associated with economists Theodore Schultz and Gary Becker, treats education, skill development, and healthcare as investments in people generating long-term economic returns for individuals and nations, just as physical capital investment generates returns for firms. II. India’s Gross National Income (GN

Q: Answer-Evaluate the following statements about Human Capital Theory and India’s human development trajector...

Statement I is correct. Human Capital Theory, developed by Theodore Schultz Nobel 1979 and Gary Becker Nobel 1992, argues that expenditure on education, training, and health is not consumption but investment. Such investment increases the productive capacity of individuals, raises wages, and drives long-run economic growth. This theory underpins the World Banks and UNDPs emphasis on human development as the foundation of economic progress. Statement II is correct. The UNDP Human Development Report 2025 released May 2025, reference year 2023 confirms that Indias GNI per capita rose from 2,167 in 1990 to 9,046 in 2023 in 2021 PPP dollars a more than four-fold increase over three decades. This growth reflects the compounding returns of sustained investment in human capital alongside structural economic transformation.

I per capita rose from $2,167 in 1990 to $9,046 (in 2021 PPP terms) in 2023, as reflected in the UNDP Human Development Report 2025 reflecting India’s long-run economic transformation driven by a combination of factors including structural change, capital accumulation, productivity growth, and investments in human development. Which of the above is/are correct?

A Only II

B Both I and II

C Only I

D Neither I nor II

E I is correct; II is an overstatement

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