The Economic and Social benefits of human capital formation and human development are well known. The union and state governments in India have been earmarking substantial financial outlays for development of education and health sectors. The spread of education and health services across different sectors of society should be ensured so as to simultaneously attain economic growth and equity. India has a rich stock of scientific and technical manpower in the world. The need of the hour is to better it qualitatively and provide such conditions so that they are utilised in our own country. 

Firms spend on giving ____________ to their workers. This may take different forms. The workers may be trained in the firm itself under the supervision of a skilled worker or the worker may be sent for off campus training.

On-the-job training

The correct answer is option (2) : On-the-job training

Firms spend on giving on-thejob-training to their workers. This may take different forms: one, the workers may be trained in the firm itself under the supervision of a skilled worker; two, the workers may be sent for off-campus training. In both these cases firms incur some expenses. Firms will, thus, insist that the workers should work for a specific period of time, after their on-the-job training, during which it can recover the benefits of the enhanced productivity owing to the training. Expenditure regarding onthe-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.