Estimating the Value of Educational Capital Formation in India.

Education is an important component of economic activity, although investment in education is only one of the many forms of investment in human capital. The idea behind this is that investment in human beings, like investment in tangible forms of capital such as buildings and industrial equipment, generates a stream of future benefits. Education is regarded as an investment in human capital because benefits accrue to an educated individual over a lifetime of activities. Educational expenditure in India averages about 4.2% of the GDP; so estimating the returns to investment in education is useful for making comparisons with other forms of investment.