The Long-Run Relationship Between Economic Development and Human Capital in India: Co-Integration Analysis

Abstract

The development of a nation's economy is influenced by a variety of variables, including its natural resources, human resources, physical capital, technical advancements, and social and political considerations. In this essay, the contribution of human capital to India's economic development is discussed. Healthcare spending has been utilised as a stand-in for human capital in this study, which looks at the relationship between economic growth and human capital in India from 1995 to 2014. The Neo-classical Solow production function and numerous linear regression models serve as the foundation for this research article. In addition to finding a high positive correlation between human capital and economic growth, this study also found that secondary school enrollment and gross capital formation had a favourable impact on India's economic growth. According to this study, secondary school enrollment has the biggest influence on India's GDP expansion. According to the study's findings, policymakers should think about directing financial resources to enhancing India's human capital, which may be done by increasing health care spending and allocating more money to education. The population of India need not be a barrier to economic development.