Human Capital Formation In India: Great Prospects
In a federal country like India, we have a union government, a state government for every state, municipal corporations, panchyat and municipalities. The Indian Constitution mentions the functions that each level of government has to carry out. Therefore, expenses on education and health can be carried out simultaneously by all the three tiers of government.
We will first see why we need government intervention in the sectors related to education and health. We have clearly stated why we need investments in education and health sectors. The investments will have long term impacts which are not easily reversible. This is the main reason why government intervention is essential. For example, once a student is admitted in a school or health care centre and a decision to shift the child is taken, a significant amount of damage would be done. Also, individual consumers that is the members of the society do not have complete information about the costs and the quality of service rendered. In such a case, the providers of health and education can exploit by enjoying monopoly. The government plays a key role here, by ensuring that the private providers of education and health adhere to the standards given by the government and charge the correct rates.
In India, the education sector is regulated by organizations like National Council of Educational Research and Training( NCERT), University Grants Commission (UGC) and All India Council of Technical Education (AICTE) and also by the ministries of education at the union and state level. The ministries of health at the union and state level and various organizations like Indian Council of Medical Research (ICMR) regulate the health sector.
In our country many people are below the poverty line and hence cannot access basic education and health care facilities. Also, a huge segment of the population cannot afford higher education and super specialty health services. Therefore, it is very important that the government provides education and health as free for the poor and those who cannot access them. In India, over the last few years, the governments at both the centre and state have increased the expenditure on health and education services in order to cater for the needs of the deserving.