The country’s economic vulnerability is critically linked to inadequacy of human capital rather than trade dependence. Examine (200 Words)
Refer - The Indian Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
· A step up in public spending and investment, promotes welfare and raises the investment rate;
· Policy reforms are aimed at making the domestic economy more globally competitive; a long-term structural shift making the economy more “self-reliant” and less dependent on the world economy.
· Increased public spending will certainly boost demand and generate employment in the short term and add to infrastructure capacity in the medium term.
· Policy reform, including changes in land, labour and other policies, could yield results in the medium term.
· Oil and gas account for a bulk of India’s imports. Whatever new sources of energy India may tap in the foreseeable future, it will remain import-dependent for energy.
· The dependence on foreign exchange inflows both in the form of remittances, mainly from the Gulf and the US, and financial flows into capital markets.
The significance of the human capital
1. Fetter use of Capital Goods:
Modern technology is becoming more and more complex. With the growth of science, machinery and equipment are becoming more sophisticated. Their efficient operation requires skill and technical knowledge. Strenghthens economy and also exports from the country
2. Better use of Improved Knowledge:
Knowledge about production and management of economies is expanding at a very fast rate. The other developed countries are increasingly adopting the new methods of production and management techniques.
This improves the growth trajectory and employability and reduces the dependence o other countries.
3. Modernization of Attitudes:
More important still, human resources development is required to modernize attitude of the general masses. Backward social system and primitive attitudes and beliefs cannot go along with the growth. Thus, the study of human capital is very crucial.
Naveen 5 years
please give feed back
IAS Parliament 5 years
Need better understanding. Try to link how Indian economy rely on human capital for its growth and mention about India's trade dependence and underline key points. Keep Writing.
Aradhana Tiwari 5 years
Recently, govt has announced "Atmanirbhar Abhiyan" which will be a step towards self- reliant and self- confident nation.
An outbreak of COVID -19 pandemic and a global lockdown - made various countries to realise that economic vulnerability is critically linked to inadequacy of human capital rather than trade dependence.
>>> Importance of Human Capital :
- Human capital and economic growth have a strong correlation. Investing in workers has had a track record of creating better employment conditions in economies throughout the world.
- It is positively correlated to economic growth since investment tends to boost productivity.
- It will inject greater self-confidence in the people by reducing the country’s dependence on other nations.
>>> In order to invest in human capital we have to list out economies on which we have a trade dependence :
* Oil-exporting economies - Oil and gas account for a bulk of India’s imports from Gulf nations.
* Foreign exchange inflows - in the form of remittances, mainly from the Gulf nation and the US.
* Financial flows into capital markets - from US and Japan.
*Defence equipment - mainly from Russia, US, Israel and France.
* Electronic goods and pharmaceuticals -mainly from China.
>>> Way Ahead :
- Companies should invest in human capital to boost profits and productivity.
- Governments should expand the skillsets and education levels of a country's population because the knowledge that people gain through education would helps develop an economy and boost economic growth.
- Adopt policy reforms aimed at making the domestic economy more globally competitive.
- A long-term structural shift is needed to make economy more “self-reliant” and less dependent on the world economy. China is the best example in this direction because trade dependence can make even a large economy vulnerable.
- And, if a country is able to grow both exports and imports then trade in itself does not create dependence.
>>> Conclusion :
For India to be truly self-reliant and self-confident, public investment in education, human capability and, research and development has to be increased.
IAS Parliament 5 years
Good attempt. Keep Writing.
Deepika 5 years
Please give feedback.
IAS Parliament 5 years
Good attempt. Keep Writing.
Emil Jose 5 years
Please provide a feedback.
Thankyou
IAS Parliament 5 years
Good attempt. Try to provide some points on India's trade dependency especially in the oil sector. Keep Writing.
