NCERT Folder 9th Economics Chapter 2 : People as Resource


Class 9

Chapter 2

People as Resource

Revision Notes

Important Terms

  • Human resource : A way of referring to a country’s working people in terms of existing abilities and skills. It emphasizes on their ability to contribute to the Gross National Product.
  • Investment : The existing stock of physical capital assets such as machinery, building, etc.
  • Productivity : The output of goods and services compared to the inputs used. It is measure of efficiency of factors of production.
  • Economic activities : The activities which have monetary value and which add value to the National Income.
  • Non- economic Activities : The activities which do not have monetary value and their work is not accounted in the national Income of the country.
  • GNP (Gross National Product) : It is the sum total of all the final goods and services produced by the normal residents of a country during an accounting year.
  • Human capital formation : When the existing human resource is further developed by becoming more educated and healthy, human capital formation takes place. It adds to the productive power of the country, just like physical capital formation.
  • Literacy rate : Percentage of people above a certain age, who can, along with understanding, both read and write short simple statements in everyday life.
  • Infrastructure : The physical framework required to provide different types of services.
  • Infant Mortality rate : The number of death of infants under one year of age occurring among the live births per thousand of the births in a year.
  • Death Rate : The number of deaths in a year under one year of age occurring among the live births per thousand of live population.
  • Life expectancy : The average period that a person may expect to live.
  • Literate : A person of seven years of age or above who is able to read and write along with a certain level of understanding.
  • Population : The total number of inhabitants of a specific area like city, country or any other location is termed to be population.
  • Unemployment : Inability to get work in spite of proper age, ability and interest.
  • Disguised unemployment : The state in which a person is willing and able to work at prevailing wages, but his productivity is zero.
  • Seasonal unemployment : This type of unemployment occurs when people are not able to find employment for some part of the year. It is typically found in the agricultural sector due to its seasonal nature.


Introduction Of How People Become Resource/Assets

  • Population becomes human capital when there is investment made in the form of education, training and medical care.
  • In fact, human capital is the stock of skill and productive knowledge embodied in them.
  • Looking at the population from this productive aspect emphasizes its ability to contribute to the creation of the Gross National Product.
  • When the existing ‘human resource’ is further developed by becoming more educated and healthy, we call it ‘human capital formation’ that adds to the productive power of the country just like ‘physical capital formation’.
  • Investment in human capital through education, training, medical care yields a return just like investment in physical capital.
  • India’s Green Revolution is a dramatic example of how the input of greater knowledge in the form of improved production technologies can rapidly increase the productivity of scarce land resources.
  • Human capital is in one way superior to other resources like land and physical capital. Human resource can make use of land and capital. Land and capital cannot become useful on its own.
  • A child, too, with investments made on his/her education and health, can yield a high return in the future in the form of higher earnings and greater contribution to society.
  • Educated parents are found to invest more heavily in the education and proper nutrition and hygiene of their child. A virtuous cycle is thus created in this case.
  • In contrast, a vicious cycle may be created by disadvantaged parents who, themselves are uneducated and lacking in hygiene, keep their children in a similarly disadvantaged state.
  • Countries like Japan have invested in human resource rather than any natural resource. These countries are developed/ rich countries. Efficiency and the technology evolved by people have made these countries rich/developed.

Economic Activities done by Men and Women and Quality of Human Resource

  • Economic Activities done by Men and Women
    • Various activities have been classified into three main sectors : primary, secondary and tertiary.
      • Primary sector includes agriculture, forestry, animal husbandry, fishing, poultry farming, mining, and quarrying.
      • Manufacturing is included in the secondary sector.
      • Trade, transport, communication, banking, education, health, tourism, services, insurance, etc., are included in the tertiary sector. The activities in this sector result in the production of goods and services.
    • Since these activities add value to the national income, they are called economic activities.
  • Economic activities have two parts — market activities and non- market activities.
    • Market activities involve remuneration to anyone who performs i.e., activity performed for pay or profit. These include production of goods or services including government service.
    • Non- market activities are the production for self-consumption. These can be consumption and processing of primary products and own account production of fixed assets.
    • A division of labour exists between men and women in the family due to historical and cultural reasons.
    • The household work done by women is not recognized in the national income.
    • Among the organized sector, teaching and medicine attract the women the most. Some women have entered administrative and other services including job that needs high levels of scientific and technological competence.
  • Quality of Population
    • The quality of population depends upon :
      • The literacy rate.
      • Health of a person is indicated by life expectancy.
      • Skill formation acquired by the people of the country.
    • Education
      • Education is an important input for the growth of a person.
      • It opens new horizons for the person.
      • Provides new aspiration.
      • Develops values of life.
      • Contributes towards the growth of the society.
      • Enhances the national income and cultural richness.
      • Increases the efficiency of governance.
    • The policies that can add to the literate population of India :
      • There is a provision made for providing universal access, retention and quality in elementary education along with a special emphasis on girls.
      • Schools like Navodaya Vidyalaya have been established in each district.
      • Vocational streams have been developed to equip large number of high school students with occupations related to knowledge and skills.
      • “Sarva Siksha Abhiyan” is a significant step towards providing elementary education to all children in the age group of six to fourteen years by 2010.
      • The bridge courses and back-to-school camps have been initiated to increase the enrolment in elementary education.
      • Mid-day meal scheme has been implemented to encourage attendance and retention of children and improve their nutritional status.
    • The eleventh plan endeavored to increase the enrolment in higher education of the 18 to 23 years age group to 15% by 2011-12 and to 21% by twelfth plan.
    • The strategy focuses on increasing access, quality, adoption of states–specific curriculum modification, vocational and networking on the use of information technology.
    • The plan also focuses on distant education, convergence of formal, non-formal, distant and IT educational institutions.
    • Health
      • The health of a person helps him to realize his potential and provides the ability to fight illness.
      • Improvement in the health status of the population has been the priority of the country.
      • Our national policy aims at improving the accessibility of health care, family welfare and nutritional service, with a special focus on the under-privileged segment of the population.
      • Increase in longevity of life is an indicator of the good quality of life marked by self-confidence.
      • Reduction in infant mortality involves the protection of children from infection, ensuring nutrition along with mother and child care.
      • There are only 381 medical colleges in the country and 301 dental colleges. Just four states i.e., Andhra Pradesh, Karnataka, Maharashtra and Tamil Nadu have maximum number of colleges.

Unemployment as a Form of Non-utilization of Human Resource

  • Unemployment
    • Unemployment is said to exist when people who are willing to work at the prevailing wages cannot find jobs.
    • The workforce population includes people from 15 years to 59 years.
    • In case of India, we have unemployment in rural and urban areas. However, the nature of unemployment differs in rural and urban areas. In case of rural areas, there is seasonal and disguised unemployment. Urban areas mostly have educated unemployment.
    • Seasonal unemployment takes place when people are not able to find jobs during some months of the year. People, dependent upon agriculture, usually face such kind of problem.
    • In case of disguised unemployment, people appear to be employed. They have an agricultural plot where they find work. This usually happens among family members engaged in agricultural activity. The work requires the service of five people, but engages eight people. Three people are extra. These three extra people are disguised unemployed.
    • Unemployment leads to wastage of manpower resource. People who are an asset for the economy turn into a liability.
    • Unemployment has a detrimental impact on the overall growth of an economy.
    • Increase in unemployment is an indicator of a depressed economy.
    • In case of India, statistically, the unemployment rate is low. A large number of people represented with low income and productivity are counted as employed.
    • The employment structure is characterized by self-employment in the primary sector. Agriculture is the most labour absorbing sector of the economy, though the rate has been declining in recent years because of disguised unemployment.
    • Some of the surplus labour in agriculture has moved to either the secondary or the tertiary sector.

Intext Questions

Question.1. Looking at the photograph can you explain how a doctor, a teacher, a engineer and a tailor are an asset to the economy?intext-economics-9th-chap-02-q1Ans. Doctors, teachers, engineers and tailors are assets to the economy because of their existing skills and abilities.

Question.2. Do you notice any difference between the two friends? What are those?intext-economics-9th-chap-02-q7intext-economics-9th-chap-02-q8Ans. Difference between two friends — Sakal and Vilas
(i) Sakal’s parents wanted him to study, while Vilas’s mother cannot afford to send him to school. Moreover, Vilas was a patient of arthritis.
(ii) Sakal was meritorious and interested in studies, while Vilas wasn’t.
(iii) Sakal completed his vocational course in computer and got a well paid job, while Vilas was faced to sell fish like his mother.
(iv) Sakal earns a good amount of money, while Vilas earns only a meagre income.

Question.3. Are the following activities economic or non-economic activities? Give reasons.
(a) Vilas sells fish in the village market.
(b) Vilas cooks food for his family.
(c) Sakal works in a private firm.
(d) Sakal looks after his younger brother and sister.
Ans. (a) It is an economic activity, as it involves remuneration.
(b) It is a non-economic activity, as it is a domestic service.
(c) It is an economic activity, as it is done in expectation of monetary reward.
(d) It is a non-economic activity, as it is done out of love and affection.

Question.4. Study the graph and answer the following questions:
(a) Has the literacy rate of the population increased since 1951?
(b) In which year India had the highest literacy rates?
(c) Why literacy rate is high among the males of India?
(d) Why are women less educated than men?
(e) How would you calculate literacy rate in India?
(f) What is your projection about India’s literacy rate in 2010?
Ans. (a) Yes.
(b) In 2001.
(c) Males in India are provided better educational opportunities.
(d) Because of sex discrimination, females are not treated at par with males. Females are not provided equal educational opportunities.
(e) Literacy Rate = (Total literate people in the age group of 17 years and above)/(Total number of people in the age group of 17 years and above)
(f) India’s literacy rate may rise to nearly 75 percent.

Question.5. Discuss this table in the classroom and answer the following questions.intext-economics-9th-chap-02-q4(1). Is the increase in number of colleges adequate to admit the increasing number of students?
(2). Do you think we should have more number of universities?
(3). What is the increase noticed among the teachers in the year 1998-99.
(4). What is your idea about future colleges and universities?
Ans. (1). Yes.
(2). No.
(3). The number of teachers in 1998-99 increased by 21,000m when compared with that in 1996–97.
(4). The number of colleges and universities in future will increase.

Question.6. Study the Table 2.2 and answer the following questions.intext-economics-9th-chap-02-q6(1). What is the percentage increase in dispensaries from 1951 to 2001?
(2). What is the percentage increase in doctors and nursing personnel from 1951 to 2001?
(3). Do you think the increase in the number of doctors and nurses adequate for India? If not, why?
(4). What other facilities would you like to provide in a hospital?
(5). Discuss about the hospital you have visited?
(6). Can you draw a graph using this table?
Ans. (1). 370 per cent
(2). 715 per cent increase in case of doctors and 3982 per cent in case of nursing personnel.
(3). No, because the number of doctors and nurses per thousand of population is very low compared to advanced countries.
(4). There should be sufficient number of doctors, nurses and beds in a hospital. Besides, a hospital must be equipped with all modern facilities.
(5). I have visited a MCD hospital in Delhi. The hospital had all basic facilities.
(6). Graph showing health infrastructure over the years.intext-economics-9th-chap-02-q9 (1)

NCERT Solution

Question.1. What do you understand by ‘people as a resource’?
Ans. People as a resource is a way of referring to the country’s working population in terms of their existing productive skills and abilities.

Question.2. How is human resource different from other resources like land and physical capital?
Ans. Human resource is different from other resources like land and physical capital. Human resource refers to human capital which can make use of land and capital. Land and capital cannot become useful on their own. Population becomes a human resource when there is investment made in form of education, training and medical care. On the other hand, land is a natural resource. And physical capital includes tools, machines, buildings, raw materials, etc. Land and physical capital, therefore, are tangible.

Question.3. What is the role of education in human capital formation?
Ans. Education is the most important component of human resource development. The role of education in human capital formation can be judged from the following facts :
(i) Education increases labour productivity.
(ii) Education modifies /improves human behaviour.
(iii) It develops personality and sense of national consciousness among the people which are important for rapid economc growth.
(iv) It promotes science and technology.

Question.4. What is the role of health in human capital formation?
Ans. Role of Health in Human Capital Formation. Unhealthy persons become a liability and healthy persons prove an asset for the economy. Therefore, improvement in the health status of the population is regarded very essential.
Improved health contributes to economic growth in the following ways :
(i) It reduces production loss caused by worker’s illness.
(ii) It increases the efficiency of workers.
(iii) It permits the use of natural and other resources.
(iv) It increases the enrolment of children in schools and makes them better able to learn.

Question.5. What part does health play in an individual’s working life?
Ans. Role of health in an individual’s working life. Health is a yardstick of one’s well-being. Efficiency of a person largely depends on his health. If a person falls sick quite often, he will not be able to do his job/work efficiently. Therefore, his income will be low. Because of low level of income, he will not be able to get proper food and proper education for his children. This will further reduce his efficiency of work and thereby income. In fact, good health improves the quality of life.

Question.6. What are the various activities undertaken in the primary sector, secondary sector and tertiary sector?
Ans. The economic activities of an economy can broadly be classified into three main producing sectors. These are :

  • Primary sector: Primary sector produces goods by exploiting natural resources. Therefore, the activities of this sector include agriculture, forestry, animal husbandry, fishing, poultry and mining.
  • Secondary sector: It converts raw materials into finished goods. It includes all manufacturing and construction activities.
  • Tertiary sector: This sector includes trade, transport, communication, banking, education, health, tourism, insurance etc. i.e. all those producing services.

Question.7. What is the difference between economic activities and non-economic activities?

Economic ActivitiesNon-Economic Activities
1. Economic activities bring income to their performers. 1. Non-economic activities do not bring income to their performers.
2. Income accruing from economic activities is included in the country’s national income. 2. These activities are not accounted in the national income.

Question.8. Why are women employed in low-paid work?
Ans. Women in India are generally employed in low-paid work. This is because of the reason that most women have meagre education and low skill formation as compared to men. They work under insecure working conditions. Besides, Indian women prefer to work at nearby places only. Also, they have to go on frequent maternity leave. All these factors force them to work at low wages. However, women with higher education and skill formation are paid at par with men.

Question.9. How will you explain the term unemployment?
Ans. Unemployment is said to exist when people who are willing to work at the current prevailing wages cannot find work/job. If some one is not interested in doing work at the ongoing wage rate or outside his/her domestic domain he/she will not be counted as unemployed.

Question.10. What is the difference between disguised unemployment and seasonal unemployment?
Ans. Disguised Unemployment: When more persons are working in a job than actually required, the situation is termed as disguised unemployment. For example, if in an agricultural activity eight people are engaged but this work/activity actually requires the services of five people, then three persons are extra. If these three people out of eight are withdrawn, total production will remain unaffected.
Seasonal Unemployment: Seasonal unemployment occurs when people are able to find jobs only during some months of the year. This kind of unemployment is generally found in the agricultural sector.

Question.11. Why is educated unemployment a peculiar problem of India?
Ans. Problem of Educated unemployment: The joblessness among the educated, i.e. matriculates and above, is called educated unemployment. Unemployment problem signifies the wastage of human resources. If unemployment is high among the educated persons the quantum of wastage of resources will be greater. This is due to investments in education and skill formation. There is a feeling of hopelessness among the educated youth. India has to spend a lot of money on education every year. People who should have been assets for the economy have turned into a liability. In this way educated unemployment is one of the big problems for India.

Question.12. In which field do you think India can build the maximum employment opportunity?
Ans. India can build the maximum employment opportunity in the agricultural sector. Agriculture is the most labour absorbing sector of the economy. Multiple cropping may help a lot in this regard.

Question.13. Can you suggest some measures in the education system to mitigate the problem of the educated unemployed?
Ans. Measures to Reduce Educated Unemployment. The education system in India is not employment oriented. There is too much emphasis on general education rather than vocational education. More employment exchange offices may be opened in the country. Though these employment exchanges do not directly provide employment, they are of great assistance in directing the educated job seekers to the possible areas of employment.

Question.14. Can you imagine some village which initially had no job opportunity but later came up with many?
Ans. There was a village inhabited by several families, Initially the village was self-reliant in the sense that each family produced all goods to meet the needs of its members. But later, it came up with many job opportunities. One of the families decided to send one of its sons to an agriculture college. After completing his education, he became an agro-engineer in the village.
Inspired by this, all the families of the village requested the panchayat to open a school in the village. The panchayat opened a school with the help of the government and a teacher was recruited for the school. After some time, one of the families sent its daughter for training in tailoring. After getting necessary training, she started stitching clothes for the villagers. Thus,
there was another job – that of a tailor in the village. In this way, many jobs were created in the village.

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