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Social Education in Industrial Development During High Growth Period of India

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In recent past decade of India has a witness of one of the highest growth period and the government has planned to reach double digit growth rate .Education has a great role in this driving force (as per Dr.Amartya Sen & Dr. John Rawls) .The concept of Rawlsian economics has grown since past three decades, the role of social welfare in development.

The highest growth rate also need high rate of industrialization and good abundance of trained as well educated professionals.

The current study deals with the role of “The role of social education in the industrial development during high growth period of India”.

The presented data obtained from NSSO & Gazette of India. This study includes the growing numbers of 1)government schools 2)government subsidized schools 3)private schools 4)government subsidized higher educational institutions and 5)private higher educational institutions .

The analysis shows that the period 2004-05 to 2007-08 has seen the considerable high growth period in industrial growth as well institutional growth, it has also witnessed of widening of rural-urban disparities.

India has a growing labor market with high degree of disparities and there is lack in lacking in smooth transaction from agriculture to manufacturing and services. Then growth is important opportunities but to avoid heterogeneity, the government has to invest more on social schooling in rural and deprived areas.


Social education, Industrial growth, Economic growth, Human development index, Liberalization, Indian states.



Education is not only an instrument of enhancing efficiency but also an effective tool of augmented and widening democratic participation and upgrading the overall quality of individual and society.

The constitutional amendment of 1976, which included the education in concurrent list, it implied a new sharing of responsibility between union and states. But the central government continues to play a leading role in the evolution and monitoring of education policies and programmes, the most notable of which are the NPE(new education policy)and programmed of action
(POA) in 1986 and updated in 1992.

The government has proposed a number of measure initiatives during 11th five year plan. Sum of new initiatives in social schooling and literacy sector and higher and technical education sector included .Right of children to free and compulsory education bill, launching Sakshar Bharat, ICT in secondary schools and open schooling, evolving a national curriculum frame work for teacher education etc.

Recommendation of Yashpal Committee and national knowledge commission establishment of 14 innovation universities aiming at the world class standards,

Setting of 10 new National institute of technology, launching of scheme of interest subsidy on educational loan taken for professional course by the economically weaker students, scheme of setting up 374 model degree colleges in district etc.

Since the beginning of liberalization in 1991 the Indian economy has been traversing a higher growing path .The impressive growth performance seems to be invoking a sense of pride in most people in their being citizen of an emerging economic powerhouse. However ,admist the celebration lie certain bitter realities, which continues to haunt the nation. A sizable section of the population still suffers from abject poverty, can’t read or write and in subject to many deprivations or it doesn’t have even a bare minimum standard of living.

Patnaik & Vasudevan (2002) have rightly noted that cutting expenditure on HD(Human Development) without improving services would have an adverse impact on long run growth opportunities. The GDP growth rate in India has broken away from the Hindu rate of growth during the post liberalization period, there by an increasing association with the world economy .There is a need to explore the extent to which the growing per capita income has influenced HD in India. Through the secondary crossectional data analysis this paper intends to analyze the evolving relationship between Industrial development and HD (education) during four time period ranging over the last two decades with NSSO .

While 1983 marks the preleberalization era during which period the economy was characterized by a moderate growth rate ,1993 captures the scenario shortly after the initiation of reforms which limited growth experiences .The reform process was almost decade old during the year 1995 to 2004 by implementing mid-day meal schemes.However the last period i.e. 2004-05 has been relatively stable with a number of policies to HD and augmentation of the quality of education in place.

In the light of the above theoretical understanding this paper makes an attempt to assess the impact of expenditure made on the social education in India.This paper has been arranged into five sections,section 2 analyzes the trends and patterns of expenditure on education in India.In section 3: the profile of status of Industrial growth .Section 4 presents a comparative statistical analysis of HDI of 28 measure states and it’s rural urban desparities.Section 5 ends with conclusion,remark and discussion of the implication of social education on Industrialization.



Table 1 shows the recent reversal in the declining trends of the combined social sector expenditure of the central and state government .Public expenditure as a percentage of GDP declined from 30.12% to 27.44% over the period 1990-91 to 2005-06.The percentage has been risen to 30.47% by 2009-10.

Note:-RE=Revenue expenditure, CE=Capital expenditure

Source:-Ministry of Finance, Government of India

Social sector expenditure as a percentage of the public expenditure remained little above 25% during the period 1990-91 to 2005-06 which increased to 29.57% in 2009-10.Expenditure of social education creates a base for economic as well Industrial growth.It is the basic agent of human resources development .Human resources are pivotal to the economic developmental process, it is essential element of

1)Customized training :-

The concept of customized training is the process of the social education organized such a way that ,it will be Industry oriented .The technical degree and diplomas as well education,provides at school level helps at great regard to provide skilled and un-skilled manpower to Industry.As a function of providing technical skills and knowledge to people already working in a community so they can carry on the effort of development (Swack & Mason 1987).

2)Skill Banks:-

The social education changes the people into a skill banks .The skill may used in various purposes,first it serves as source of community data on the nature of the job development needs of the unemployed.Second the dominant use of the skill bank is its inventory of skills that can be matched to available vacancies in the local area.Finally skill banks collect unemployed people into corporative or community based employment initiative.

In Indian context the expenditure on social education receives the majority of shares.Expenditure bon education as a percentage of the GDP declined from 3.37% in 1990-91 to 2.89% in 2005-06 and then increased to 3.39% in 2009-10.

Note:-Figures within the brackets represents expenditure on the specific head as a percentage of the total social sector expenditure .

Source:-Ministry of Finance,Government of India.

We expected that the coefficient of the variable cumulative per capita social sector expenditure to bear a positive sign,which would mena that the higher the per capita social sector expenditure the higher would be the value of HDI.Naturally ,the coefficient of PCI should also have a positive sign.

Y=1/ (1+eˉz)

Where Y=value of human development index in 2001 of the states of India.

Z=β0+ β1CPCSSE+ β2PCI+U

Where CPCSSE=cumulative per capita social sector expenditure and

PCI=per capita income in 2001

U=random distribution term .

It may be noted that as Z goes from – ∞ to +∞, Y goes to 0 to 1.


Note:-Significance level=0.01

Source:-Handbook of statistics on Indian economy & state finance: A study of Budget,Pulished by RBI 2001.

The results indicate that the variation in attainments of human development within India,which are linked to the attainment of per capita income ,and the differences in per capita social sector expenditure can’t account for much of this variation.

This leads to the inference that most of India’s attainment in field of human development has came from income growth.Public expenditure on social sectors has not played it’s due role expediting the process of human development in the country,which indeed could be the measure factor in keeping India’s record in improving human development rather ordinary.

Although it was promised in common minimum programme(CMP) of UPA1 government that public spending on education would rise to 6% of GDP,the realization of this promise seems to be a distant dream.

Section 3

Profile of status of Industrial growth

India started her quest for Industrial development after independence in 1947. The Industrial policy resolution of 1948 marked the beginning of the revolution of the Indian Industrial policy. The resolution not only defined the broad contours of policy, but it define the role of the state in Industrial development both has an entrepreneur and as authority. The Indian policy resolution of 1956 gave the public sector a strategic role in the economy. It categorized industry which would be the explosive responsibility of the state or would progressively commander state control and others. Now it extended to PPP to give the policy framework flexibility.

Indian strategy for Industrial development witnessed a paradigm shift in 1991. Industrial development until then was largely based on product market regulations, with capacity licensing being its principal instrument. Though this strategy had successfully created an industrial base, but there were limited incentives for product innovation for a competitive push.

Economic reforms initiated in 1991 gradually removed this product market licenses. The new industrial development strategy therefore envisaged a significantly bigger role for private initiatives.

New industrial policy

Industrial policy since 1991 has been more of facilitating the industrial development rather than anchoring it through permits and controls. Industrial license has therefore, has abolished for most of the industries and there are only five industries related to security, strategic and environmental concerns where an industrial license is currently required.

I.Distillation and brewing of alcoholic drinks.

II.Cigars and Cigarettes and manufactured tobacco substitutes.

III.Industrial explosive including detonating fuses, safety fuses, gunpowder, nitrocellulose and matches.

IV.Electronic aerospace and defense equipment of all types.

V.Specified hazardous chemicals.

Along with the removal of the industrial licensing, reforms has also been initiated in areas of reservation of products for exclusive production in small scale sector with the reduction in tariff rates and removal of quantitative restrictions on imports, product reservation for small scales sector has created an anomalous situation. The government has also enacted the micro, small and medium enterprises development (MSMEI Act 2006). Stepping up the investment limit to Rs.5 crore for small enterprises so as to reduce the regulatory interface with the majority of the Industrial limit .


Foreign Direct Investment(FDI)-

Domestic saving in India have not been enough to provide for the investment opportunities .Capital inflows from other countries ,particularly of an investment nature which adds to domestic investment have become important.The ratio of domestic saving to GDP has generally been lower than the ratio of GCF to GDP.During 2004-08 this gap was 1.3% of GDP.In the year 2000 the government allowed FDI up to 100% on the automatic route for most activities and a small negative list was notified wher either the automatic route was not available or there were limits on FDI.Since then the policy has been gradually simplified and rationalized more sectors opened up for foreign investment.


Industrial employment :

The employment in the manufacturing sector in India has remained fairly stable.The last two rounds NSSO survey indicates that the share of employment in Industry has remained 12% of total person employed .As per NSSO (64 round)the number of person engaged in Industry appears to have marginally declined. The declined is particularly sharp in sectors such as apparels ,leathers,wood and food processing Industry.


Industry is the resort of various inputs i.e. materials ,technology,energy,man power etc.To analyze the various factors the input output coefficient factor is one of the best model proposed by Walras .

Since the total output of an Industry is fully used of either in Industries as inputs or in meeting final demand.In the form of equation,




Xn=Xn1+Xn2+……………………. +X2n+Dn

This equation has called Leontief balance equation,in which the man power or trained staff is a strong factor.

If all the input coefficients are given and fixed ,i.e. the input requirements are strictly proportional to output,then it can describe the balance equation of our n sector economy as follows.





The above system of balance equation describing input output relation of an economy is often return in comact matrix notion as follows


Where X is column vector,D is the final demand column vector and A is the coefficient matrix.

The role of social education is in great regard in not only making human resource for Industry but it also creates the demand for manufactured goods.


Comparative statistical analysis of HDI of 28 major states of India and it’s rural urban disparities.

The average HDI score of the states has been found to be significantly different across various income categories. The existing literature suggests that the inequality might affect the growth process and the livelihood of the citizens of different states differently,through the HD level has improved across all income group.However this improvement is not smooth,which is discussed in greater detail in the following table.

The above figures shows that HDI has a strong tie up with the government expenditure on social sectors including education.The values of significant level shows that there are disparities among rural and urban because of lower inflow of GSDP on expenditure on social sector in rural areas.Though GSDP has many dependent variables and it is a direct variable of HDI,these variables may be social ,economic or political .

The positive relationship between economic as well Industrial growth and human development, as observer from current analysis holds important policy implications. Since mid 90’s the Indian economy has undergone a structured transformation with the contribution of service and Industry sector.The role of government institution is important for economic growth is translate into economic development,for that social education has a great role to transformation of manpower into agriculture to modern Industry and services.



In this paper ,an attempt has been made to asses the impact of expenditure on education as well in other social sectors in human development and Industrial growth during high growth period of India .

The public expenditure may partly be due to the fiscal stimulus give to the economy and Industrial growth and it to emerge out of global economic recession or a manifestation of the attempts made to realize the objective of inclusive growth. Within the social sectors education have remind as a major head of expenditure.At the state level the per capita social sector expenditure has increased in all the states over time.There is however high degree of variation among the states in this respect.Although the per capita expenditure has increased over time by International standards,India’s social sectors spending crucial area like education is far below that of even many developing countries.Hence ,It is not surprising that despite a continuous improvement in India’s economy,her rank in HDI has not improved at a rate that would be in keeping with her rise in status on emerging economy in the International arena.

However ,in view of the facts such expenditure have not resulted in a significant outcomes in terms of contributing to human development in several part of country but,one can’t ignore the necessity of streamlining the delivery mechanism of services while allocating an enhanced share of government expenditure for the social sector.

Ahluwalia’s(2010) exploration even for a relatively developed states like Punjab corroborates this point (Ahluwalia’s 2010).The right to education (RTE) act can be expected that the delivery mechanism of public services for improving social education at grassroots level and use of technology may contribute significantly to the end.The role of social education is not only to provide the human resource for economic or Industrial growth but it also provides wide range of consumer for manufactured goods and hence it enhances the demand for the products.The social education of mass creates (1) customized trained staff for Industry and services and (2) it helps to build a skilled bank for job developing and searching at local or larger level.

The heterogeneity in HDI or rural –urban disparities among various states is an obstacle to successful transformation of manpower from agrarian or primitive to modern Industry or service oriented jobs. However ,on the policy front the lower value of expenditure coefficient in rural areas indicates the presence of vicious cycle mentioned in paper, owing to the lower limit initial HD scenario and other bottlenecks which deserves immediate government attention.Therefore the central and state government needs to urgently acknowledged the underlined relationship between education and other social expenditure and economic growth,on the other. Over dependence on government sponsored social education projects for enhancing human resource quality for economic development would weakened HD formation and consequently the very process of economic development. Then the group of Industries must have to take some action for social education.


1)Anand,Sudhir & Sen,Amartya(2000)”Human development ,poverty,health & nutrition situation in India” Indian journal of medical research vol 128 no 2 pp 198-205.

2)Bhandari,Laveesh and Aarati khare(2002)”The geography of post 1991 Indian economy “Global business review vol 3 no.2 pp 321-340.

3)Patnaik,I &D.Vasudevan(2002)”Beyond GDP growth:human development in 1990’s”available at http://openlib.org/home/ila/pdfdocs/patnaik vasudevan 2002-hdi.pdf,accessed on 23rd august 2012.

4)NSSO (2007)”Levels & patterns of consumer expenditure”NSS 61st round .

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