Which of the following is not a source of human capital?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Expenditure on machinery
Machinery is physical capital. Human capital is the skill and knowledge of people, and its sources are the things that make people more productive:
Education, one of the main sources.
Health, since a healthy person can work better and for longer.
On-the-job training, which raises the productivity of workers.
Migration and job market information, which help people get better paid work.
NCERT (2026-27): “4.2 What is Human Capital? … Just as a country can turn physical resources like land into physical capital like factories, similarly, it can also turn human resources like nurses, farmers, teachers, students into human capital like engineers and doctors.… 4.3 Sources of Human Capital Investment in education is considered as one of the main sources of human capital. There are several other sources as well. Investments in health, on-the-job training, migration and information are the other sources of human capital formation.… …Expenditure regarding on-the-job training is a source of human capital formation as the return of such expenditure in the form of enhanced labour productivity is more than the cost of it.…” |