SANEI: Education Research Initiative: Abstract

Human Capital Formation and Economic Growth in India: A CGE Analysis

Here, using a multi sector and multi factor computable general equilibrium model which is recursive dynamic, we would like to examine the impacts (both direct and indirect) of public expenditure in education on economic growth. These impacts would be explored with various sources of financing the public expenditure in education. There is a substantial amount of evidence to show that human capital formation affect economic growth significantly. Public expenditure on education and health plays a crucial role in the process of human development. Further, a multi sector and multi factor model takes into account the interactive effects among sectors and institutions. However, there is not much research in this area especially in Indian context. Hence, this proposed study is likely to generate very high potential pay off. This study also assumes importance as the economic reform program in India is hurting the government expenditure on social sector.