Unlocking the Economic Potential of India
The role of Human Capital
DOI:
https://doi.org/10.68379/k7rbxt36Keywords:
Human Capital, Economic Growth, Life Expectancy, Capital Formation, IndiaAbstract
Human capital is driving the economic growth, as it enhances the labor’s productivity. This leads to increase the efficiency and competitiveness of the country. Hence, investment on education creates more capable human capital, which is crucial for sustainable economic growth. Hence, this study tries to explore the pivot role of human capital by addresses the crucial question that does human capital positively influence economic growth? Hence, this study is used secondary dataset from 1980 to 2023. The study analyze the objective by using autoregressive distributed lag (ARDL) and Granger causality test following the augmented Dicky-Fuller (ADF) and Bounds tests. The finding reveals that the key indicators of human capital including domestic health expenditure, school enrollment and life expectancy has significant impact on economic growth of Indian’s economy on both in the short, as well as, in long-run. Furthermore, significantly one-sided Granger causalities are found from life expectancy to health expenditure, health expenditure to economic growth, economic growth to life expectancy, school enrollment to economic growth, health expenditure to gross capital formation, gross capital formation to life expectancy, and finally school enrollment to gross capital formation. No two-tailed causality is found. Lastly, based on the findings, the study suggested that policymakers should understand the importance of health expenditure by allocating budget, access to education by improving infrastructure, and enhancing life expectancy by proving health care facilities. These measures are essential to stimulate long-term economic growth.
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