A Field Project Report On

“Role of Education In Meeting Development

Needs Of The Economy”

Submitted in partial fulfillment of the requirement for the award of

degree of

NAME OF PROGRAMME

(MASTER OF BUSINESS ADMINISTRATION)

SESSION (2022-2023)

SUBMITTEDTO: - SUBMITTED BY:

(DR. SWATI RAI) Nivesh Kumar
Coordinator–MBA II Semester MBA II Semester
Roll No:22021093

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 STUDENT’ S DECLARATION

I Nivesh Kumar RollNo.22021093 am full-time bona fide student of

master of business administration Semester2 of IFTM University

,Moradabad. I hereby certify that this field project work carriedout by me

and the report submitted in partial fulfillment of the requirements of the

programme is an original work of mine under the guidance of the class

coordinator Dr Swati Rai ,and Is not based orreproduced from

anyexisting work of any other persono ronanyear lier work under taken a

tany otherti meorfor anyother purpose, andhas not been submitted

anywhere elseat anytime.

Nivesh kumar

Date:

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 Table of Contents

1- Introduction
2- Rates of Return to Education in India Economic
3- Growth and Education
4- Economic Development and Education
5- Data Analysis
1.1. Human Capital Formation
1.2. Productivity
1.3. Reduces Poverty
1.4. Women Empowerment
1.5. Social Development:
1.6. Health Awareness
6- Conclusions:

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 Education and Economic Development in India

Introduction

The analysis of education as an economic commodity has a long history. The seminal
work of Becker (1962) and Schultz(1962) presented a formal model of education as an
investment good that augmented the stock of human capital. Individuals made
educational choices in the same way as any other investment decision all of which have
the common characteristic that an investment cost paid now produces a flow of benefits
through time whose present discounted value is to be compared with the present cost.
Following from this, there was an outpouring of econometric studies attempting to
measure the rate of return to education – the so called Mincerian approach – whilst
controlling for a plethora of other variables that might reasonably be expected to
influence earnings. Extensions of this basic Human Capital model to study training
outcomes, educational subsidies and fee charges have been recently exploited.

Within development and growth economics, the importance of education as an

economic variable also has a distinguished history beginning with Lewis(1962).
Questions regarding appropriate mix of skills, what type of education to be
emphasised, the relationship between education and the capacity of the economy to
absorb educated workers in productive employment have all been studied albeit outside
the confines of a formal model Recently, the resurgence of interest in endogenous
growth – the so called New Growth Theory ( Barro(1991), Barro and Sala-i-Martin
(1995),Lucas (1998) has given a huge impetus to the formal analysis of the potential
role of education in economic growth. However it must be emphasised that economic

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 growth and economic development are not the same thing. Economic growth is one
component albeit a very important one in the process of economic development. This
important distinction is best illustrated by the creation (and widespread use) of the
Human Development Index by UNDP. This index has acquired the status of the
industry standard when discussing non GDP contributions to economic development.

In India, perhaps more than in many developing countries, the non GDP dimension is of

huge importance. The sheer scale and diversity means that the development process has

had perforce to deal with issues of inequality and exclusion on a multidimensional scale.

Most developing countries have had to emphasise reduction of poverty, gender

discrimination ,infant mortality, literacy, child labour, income inequality etc as part of

their development agenda. In India there are additional factors which impinge on and

intersect the development process- caste and “untouchability”, religion, language, to

name the most important.

I shall structure this brief survey to follow the three main strands outlined above. First I

shall examine the returns to education in India , and then examine the role of education

on both economic growth and economic development with particular reference to India.

Throughout, my objective is draw out the implications of the empirical results for

education policy.

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 Rates of Return to Education in India

The recent study by Dutta (2006) using the Indian National survey data found that for
adult males the pattern of rates of education is not dissimilar to that found elsewhere.
The returns were significantly different for casual workers and regular workers. The
latter had the usual inverted U shaped curve with respect to education levels whilst for
casual workers the returns were flat. There was also some evidence that for regular
workers graduates were pulling away from primary educated in the period of the 1990s.
The author suggests (without much evidence) that this might be because of trade
liberalisation.
Worthwhile though such studies are, it must be borne in mind that the entire Human
Capital approach is based on competitive access to credit markets in order to finance
education. If education is rationed so that those from low income families are excluded
from the education process, then the estimates of rate of return can at best be interpreted
as conditional. In an important paper Tilak(2002) user NCAER data on Human
Development in rural India to demonstrate that households expenditure at least on
primary education is not restricted to the upper socio economic classes. There does not
appear to be strong evidence of financial constraints rationing access to education. At
least at the primary level, this lends support to the rates of return to primary education
being a good first approximation.
In another recent study, Duraisamy and Duraisamy(2005) using NSSO survey found
wide variations in rates of return across the various states. Nonetheless the inverted U
pattern was found with returns to primary education being low (2 to 10%) compared to
those who have secondary education (12 to 24%). Not surprisingly the returns to
primary education were greatest in the less developed states where poverty is more
manifest. In a parallel study Duraisamy( 2002) found that that the return to women
exceeded that for women. However, Kingdon and Unni(2001) show that this finding
that women have higher rates of return to education has to be set against the fact that
women tend to have lower levels of education due to discriminatory intra-family
behaviour. They show that the positive effect from higher rates of return is effectively
cancelled out by womens lower years of schooling, leaving other forces to play an

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explanatory role in accounting for lower wages for women.
An important aspect of the role of education in development is the distinct possibility of
“over-education”. The studies cited above suggest that rates of return beyond secondary
education are not very high. Why then is the post secondary educated sector exploding?
Casual observation suggests very high levels of graduate unemployment and under-
employment. This view is supported by Sharma et.al( 2002) who note “ the (relative)
shrinking of the job market especially for educated workers” in recent years. This
suggests a considerable amount of “disguised unemployment” amongst graduates which
manifests itself as graduates doing jobs for which they are overqualified. Once again
this could bias the rates of return to education as has been shown in the UK context by
Chatterji et al (2003).
From a policy perspective, these rate of return studies do provide some useful
information. The results highlight the need to consider education policy options that are
contingent on current levels of development. One size fits all is not helpful. They also
suggest that before policy is considered, the interaction between education and the
labour market needs to be properly accounted for.

Economic Growth and Education:

The seminal paper by Lucas (1988, op.cit.) was central to understanding not only the
relationship between education and growth but also why there might be a strong case for
policy intervention to promote educational take up. Within the context of a “new
growth” model, Lucas suggested that the productivity of any worker is higher when
working in an environment peopled by other high productivity workers through a kind
of learning by watching mechanism. It follows then that the growth path a region takes
depends in part on the level of accumulated human capital at the start of the growth
process. The Lucas model can also be used to justify educational subsidy because of the
implicit positive externality arising from education. Cross country empirical studies
most notably Barro (1991, op.cit) found that once other factors were controlled for,
human capital did indeed have a positive influence on growth. Barro’s analysis was
focussed on the positive impact on growth of fairly basic education variables – namely

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primary and secondary schooling. Using a similar methodology, Chatterji (1998)
extended this to include tertiary education and found a similar positive result.
Using Indian data from 1966 to 1996, Self and Grabowski(2004) used time series
techniques to study the causal impact of primary, secondary, and tertiary education on
Indian growth performance. The results confirmed the importance of primary education
with weaker evidence for secondary education and no evidence that tertiary education
has a beneficial impact on growth. The apparent irrelevance of tertiary education is of
course entirely consistent with the graduate disguised unemployment hypothesis
outlined above. But perhaps the most interesting finding of Self and Grabowski is the
importance of female education ( at all levels) in the growth process. This supports the
results of Duraisamy (2002) that rates of return to education were higher for women.
It should be noted that the period of the study ends before the trade liberalisation

reforms started. In other words, the data come from a closed economy. It has been

suggested by Jain(2004) relying on the work of Bhalla at the World Bank that education

has significant gains only in an open economy which is able to fully leverage additional

knowledge. It is tentatively suggested that in the open era, that if India can raise the

average level of schooling by two years, this will lead to a 0.15-0.2 percentage point

permanent increase in GDP growth.

In another pre-liberalisation study, Ansari and Singh(1997) use annual time series from

1951 to 1987 to study the relationship between public spending on education and

growth. They find no long run relationship between the two, consistent with “the closed

economy fails to leverage new knowledge” hypothesis. However, they do find a direct

causal link from public spending on education to private capital formation, and hence

indirectly onto growth. Similarly, in a study of the Indian states from 1970-94, Nagaraj

et.al(2000) do find strong evidence of the role of primary education in generating

growth and in educational disparities across the states in sustaining inter state inequality .

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 Economic Development and Education

In the Indian context, economic growth cannot be seen as synonymous with economic

development. For all but the most ardent believers in “trickledown”, economic growth

will be seen at best as a necessary condition for economic development. It is certainly

not sufficient. Once one considers the much broader perspectives of economic

development, it becomes apparent that the role of education and education policy

becomes (potentially at least) even greater.

In India the set of issues which might reasonably be encompassed within the umbrella of

economic development might include inequality and exclusion of all types (whether

based on income, gender, caste, religion or region ), health, fertility and infant mortality

and child labour. In the broadest terms, the empirical research by economists suggests

that in India, a very important factor impinging on these issues is women’s education.

For example, Dreze and Murthi (2001), show that a major factor determining low

fertility is high female education whilst general indicators of modernisation like

urbanisation, poverty reduction, and male literacy have no such impact. The picture with

respect to caste issues is less promising. Despite considerable government investment

into the education of the “backward castes”, there is little evidence of economic benefit

to these castes, partly because of the inability of the education to deliver superior jobs.

This leads naturally to a “discouraged worker” effect and withdrawal of funds for

educational purposes by such castes. In an important study, Jeffrey et al (2004) conclude

that “Without a substantial redistribution in material assets within society, development

initiatives focused on formal education are likely to be only partially successful in

raising social standing and economic position of subordinate groups”.

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 Data Analysis
Education is one of the most important aspects of development. It has a significant
impact on a country's economic prosperity. Without considerable investments in human
capital, no country can achieve long-term economic progress.

Education broadens people's outlook on themselves and the world around them. It
enhances their quality of life and provides a variety of social benefits to both people and
society. It is critical for ensuring economic and social progress. It helps in the
development of human capital, productivity, creativity, poverty reduction, encourages
entrepreneurship, technological advancements, women empowerment, social
development, health awareness, and other areas where economic development can be
boosted. These different roles of education in India's Economic Development are
addressed below.
 Human Capital Formation:

Human capital is directly related to human development. When there is human

development, qualitative and quantitative advances in the nation are unavoidable. Human
capital is an instrument for promoting the comprehensive development of the nation.

Due to qualitative improvements in each generation, India's rate of human capital

formation has steadily increased since independence. The third generation of India's
population is actively working in the country's workforce in the second decade of the 21st
century. It is the most qualitative superior human resource.

The third generation has boosted India's service industry and improved the Invisible
Balance of Payments with the export of financial services, software services, and tourism
services. The fast growth of the Indian economy in response to improvements in the
service sector demonstrates India's cumulative human capital growth.

Recently, the Indian government has taken steps to provide more job-oriented education
in order to increase the supply of trained employees and push the country's economy

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forward. Prime Minister Narendra Modi announced the 'Kaushal Bharat, Kushal Bharat'
project. The government has established a goal for 400 million citizens by 2022 to enable
them to find work under this initiative. Various programs, such as the Pradhan Mantri
Vikas Yojana (PMKVY), the National Policy for Skill Development and
Entrepreneurship 2015, the Skill Loan Scheme, and the National Skill Development
Mission have been launched.

 Productivity:

output and exports. It is a key component of a system's ability to effectively borrow

foreign technology. Health and nutrition, as well as primary and secondary education, all
contribute to increasing worker productivity in both rural and urban areas. Secondary
education helps in the development of talents and managerial capabilities. tertiary
education contributes to the advancement of basic science, the proper selection of
technology imports, and the adoption and development of technologies in the domestic
markets. Both tertiary and secondary education provide significant contributions to the
formation of key government institutions, the legal system, and the financial system.

India is no less in this aspect. India has progressed to the point that, as a developing
country, it has been able to reach such a high level of education that it is now one of the
world's top countries, boosting its economic development day by day. In numerous
categories, such as nuclear weapons and marine equipment, India ranks third in the
world.

This success is largely owing to education's contribution to these fields. If it continues to

improve at the same rate, our country's economic development will undoubtedly
accelerate. Agriculture and Industry give evidence that their productivity has increased
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significantly as a result of education. Farmers can now use new technologies to produce
more than they could previously with old methods. The same with the industrial sector.
There is increasing industrialization when new equipment is introduced. Educated labour.
and workers are capable of properly applying current techniques and equipment, allowing
for increased output and economic progress. This brings great economic development.

 Reduces Poverty:

Poverty is a huge threat to human survival in modern times, particularly in developing

countries. The most effective way to reduce poverty is to invest in education. As history
shows, no country can prosper if its citizens are not educated. Poverty and education are
adversely connected. Education indirectly helps in the fulfilment of fundamental
necessities such as water and sanitation, access to health care, and housing, as well as
influencing women's behaviour in fertility decisions and family planning.

Education, in every sense, is one of the most important aspects of attaining long-term
economic growth through human capital investment. Education lays the groundwork for
reducing poverty. It is the key to boosting economic efficiency and social consistency by
raising the workforce's worth and efficiency and therefore lifting the poor out of poverty.
Technical and vocational education and training can provide marginalised people with
job opportunities while also integrating important learning skills. It can assist young
people in finding work in green industries such as alternative energy, recycling,
agriculture, transportation, and communication.

 Women Empowerment:

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 “A society that does not give importance to education cannot
progress. Let there be any Government, it must have the vision to
make India shine in the field of education.”
Prime Minister Narendra Modi

Over the last several decades, women's empowerment has become a hot topic all over the
world, especially in India.Inequalities between men and women, as well as gender
discrimination, have long been a topic of concern across the world. As a result, women's
desire for equality with men is a worldwide phenomenon. Purdah (veil system), female
infanticide, child marriage, sati system (self-immolation by women with their husbands),
dowry system, and the status of lifelong widowhood were all abolished or significantly
reduced in India after independence due to legislative efforts. In India, two acts have been
passed to liberate women. Protection of Women from Domestic Violence Act of 2005
and Compulsory Marriage Registration Act of 2006. The Domestic Violence Act
addresses both physical and emotional abuse. Even among the affluent, there was a time
when women's education was not a priority.

An increasing number of women have been joining the economic sphere, seeking paid
labour (remunerative jobs) outside the home, during the last quarter of the twentieth
century, and especially with the opening up of the economy, post-1991. Women are
increasingly contributing to the economy as employees, consumers, entrepreneurs,
managers, and investors. Women may now be found in practically every industry,
including architecture, law, financial services, engineering, medicine, and information
technology. They've also gone into service jobs like a nurse, beautician, salesperson,
waitress, and so on.

The need for an educated female labour force has expanded practically everywhere due to
the high speed of economic growth. Although women earn as much as their husbands,
their work contributes significantly to the family and offers them an economic advantage
over families with only one breadwinner. Despite the disadvantages and challenges that
still exist, Indian women (particularly educated women) are no longer hesitant or
apologetic about asserting their rights and visibility inside the household, at work, in
public spaces, and public discussion.

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  Social Development:

“Education is the most powerful weapon you can use to change the
world.”
-Nelson Mandela.

Education has always had the power to move a society forward from a dark place to a
place of optimism. It serves as a vital tool for social and economic growth. Superstitions,
the practice of bad culture, the dowry system, gender biases, and other barriers to
society's progress have a detrimental impact on the society's foundation. Education paves
the path to overcome such obstacles. In a developing country like India, more than half of
the population lives in rural regions. Almost all of India's states, such as Bihar, Assam,
Uttar Pradesh, and Rajasthan, are still underdeveloped. Even from space, India is
renowned to have the biggest slum areas, which can be seen in Mumbai. These people are
backward in every sense, even though the country is developing. If these people were
given access to education, they would become literate and contribute significantly to the
growth of the economy. These people's knowledge, abilities, and perceptions can be
enhanced by educational programs, mass media, and other means. People benefit from
these arrangements because their social and economic conditions improve, enhancing
their standard of living. People benefit from these arrangements because their social and
economic conditions improve, enhancing their standard of living. These procedures,
without a doubt, need a long gestation time. However, we are constantly conscious of the
fact that patience yields a positive result. As a result, over a longer time of societal
transformation, not only will individuals improve themselves, but they will also
contribute to the growth of a nation's economy.

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  Health Awareness:

India is a densely populated country where a huge percentage of the population lacks
access to basic education and health care. In comparison to metropolitan areas, the
situation in rural villages is more complicated. Their houses are poorly established and
lack adequate water and electrical supplies. They manage to get a little water from remote
sources and rarely think about showering, cleaning their clothes, or renovating their
shelters. In addition to their terrible socioeconomic situation, a lack of knowledge and
public awareness is a key cause of their suffering.

People's minds can be imparted with health awareness through education.

1. To enhance patients' knowledge and attitudes regarding illness detection, treatment,

and control.
2. To promote educational materials for the family and community that are necessary for
healthy living behaviours.
3. To raise public awareness about the dangers of drinking, smoking, and other drugs,
among other things.

The above ideas emphasise the development of persons who are capable of handling any
crucial situation.
The following are the factors that influence educational effectiveness:

4. To enhance disease control, all health professionals' knowledge, attitude, and abilities
about signs, symptoms, and management procedures for health threats should be
improved.
5. To encourage health care providers to treat patients with care.
6. To create resources and materials for health professionals to utilise.
7. To encourage research throughout the world to reduce health risks.
8. To promote continuing education programs that provide correct information on
disease diagnosis and treatment.

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Education in schools can also be an important tool for a country's economic development.
Children are often referred to as a country's future.
As a result, educating their minds will contribute to national growth.
Many pharmaceutical businesses in India are currently developing new drugs to help
individuals combat diseases such as swine flu, dengue fever, tuberculosis, cancer, and
Ebola.

Child Help Foundation's contribution to the Education and Economic Development of

India:

Child Help Foundation (CHF) in the past few years has worked on the Pan India level
toward the Sustainable Development Goals. As education is an important aspect of
development for an individual as well as the nation, Child Help Foundation (CHF) is
involved in a noble cause of providing primary education at the grassroots level to the
economically backward sections of society.

We aim to provide all children with equal opportunity. Due to their socio-economic
status, lack of access to schools, and their parents' poor regard for education, many
underprivileged children in India do not receive a proper education. Education may not
be able to solve all problems, but it is a means of transforming India from a "Developing
Nation" to a "Developed Nation."

To uphold this vision, CHF has been providing scholarships to deserving students from
disadvantaged backgrounds and children living in shelter homes all around India.

Several projects have been undertaken by CHF to support the Self-Reliant India
initiative, which was launched by the government of India, for helping people and
communities learn the ways to grow and benefit from the skills and techniques of the
modern era.

Digital education had become important for every second person during the COVID
times. It wasn't a difficult task in urban areas, but it was something very new in rural
ones. CHF started the Digital Classroom to teach the tribal rural people to get into the
habit of the new normal after the pandemic by using digital media.

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Complex mathematical and scientific concepts are better understood when they are
demonstrated in everyday situations. Therefore, CHF established Mini Science Centres in
various schools, in villages across India to help students understand scientific and
mathematical concepts with practical knowledge. Students are benefiting from models of
scientific concepts such as gravitation, motion, reflection, and anatomy, as well as
mathematical concepts such as algebraic expressions and geometry.

CHF has also established the Centre for Excellence Program with a focus on school
development projects including the physical, academic, social, and mental needs of
children.

India is on its way towards development, but illiteracy hinders the path of the bright
future of the country. Many children show interest in learning, being educated and
attending school, but due to a lack of access to education, they are unable to access
proper knowledge.

Want to contribute to helping underprivileged children have an equal opportunity to

receive an education? Visit our website and learn more about our work. You can
contribute by donating or volunteering for the causes we support.

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 Conclusions:

The consensus of the empirical literature appears to be that rates of return are indeed
(inverted) U shaped being largest for secondary education. However, all rates of return to
education are higher in those areas where development is low. One apparently
contradictory finding is that rates of return to primary education are quite low, but
nonetheless in growth regressions, it is the primary education variable that has the largest
positive impact. This is suggestive of the possibility that primary education does have the
Lucas type externality. The measured private rates of return are lower than the social rate
of return. If this conjecture is correct – and it is testable using inter-state data – this has
profound implications for public policy. There appears to be no similar effect for women
where the higher private rates of return appear to already show up in higher growth rates
from educating women. The risks of further expansion of higher education are also
documented. Similarly, the policy of investing in educating “backward castes” without
compensatory changes in labour market policy have been shown to be potentially
counterproductive. Despite the fact that from a narrow income perspective for women,
there appears to be no wedge between private and social economic returns for women,
the developmental returns from enhancing female education appear to be large.

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