countries are assumed to be primarily due to changes in the rates of human capital accumulation. the empirical literature on testing the importance of human capital for economic growth has produced very mixed results. on the one hand, some influential studies find no relationship between human capital and growth when the lucas approach is tested for broad samples of countries. on the other hand, some studies are able to reconcile microeconometric estimates of the rate of return to years of schooling with macroeconometric estimates of the impact of changes in educational attainment on growth after accounting for measurement error. some economists emphasize the importance of accounting for labour force quality. they find a strong link between direct quality measures ( i. e. cognitive skills ) and economic growth. the empirical research undertaken by some economists provide support for the lucas approach that growth is driven by the accumulation of human capital. let me now conceptualise my thought process : conventionally three factors of production viz., land, labour and capital have been recognized as the sources of economic growth. the pace of economic growth differs primarily on account of capital accumulation. nevertheless, the differences in the growth performance and living standards across countries can be attributed not only to the pace of growth of physical capital but also the investment in human capital, which in turn, determines the quality of labour force and productivity. in fact, human resources in the growth process are as important as physical capital, technology and financial resources. despite a great deal of discussion on critical role of human resource development, actual attention paid has been inadequate. this is partly because the process of developing human resource is extended over a long period of time. secondly, the return from accumulation of human capital has a long gestation lag. thirdly, the resource requirement for developing human resources is enormous. however, it may be argued that on account of the long lead - time involved, human resource development cannot be postponed and should be addressed with a coherent human resource policy. recognising this, in the recent times, the focus of attention in the government as well as in the private sector has been the efficient and effective use of human resources. a critical element in this process is the quality of governance, as it is increasingly been recognized to be one of the prime factors behind the most remarkable development successes of human history. evidence suggests that good governance can help secure human well - being and sustained development. similarly, poor governance would erode the individual capabilities as well as institutional and community capacities to meet even the basic needs of susten

extent to which social services can meet their intended objectives of raising the quality of human resources depends on the efficiency with which such resources are used to deliver the social services. expanding social expenditures, especially on education, skill formation, health services would require correction of fiscal imbalances so as to release larger resources for such activities. it is evident that the capacity of the government in releasing resources for human resource development is constrained due to severe resource constraint. in this context, the question arises is what supportive / complementary role the private sector can play to meet the gap between the requirements of human capital formation and the actual achievements? the market response to human resource development / private sector participation is increasingly becoming important. in the post - liberalisation period in india, there has been proliferation of private initiative in research and development and capacity building particularly in areas such as information technology, software, business and medical education. however, the level of private initiative has not been adequate to cope up with the requirements of our society. the increasing competitive pressures have while forced private enterprises to constantly upgrade the skills of the workforce within the organisation to cope with the increasing rate of obsoleteness of the technology and adapt newer available technologies, the role in supporting the basic institutions providing opportunities for skill formation to larger population is very limited. there is a need to develop greater synergic links between the public and the private sector in core areas of human resource development through suitable incentive framework. contextually, i would flag the following agenda for fostering the growth of human capital in india : • in the context of stabilisation of population growth at 2 per cent per annum, there is a need to achieve more than twice per capita gdp from the present level. • the issue of improving governance in the country has to be addressed as it has important implications for maintaining the quality of institutions imparting basic capabilities to the people. effective governance requires greater transparency, more effective communication and high degree of professionalism. the crucial aspect is the upgradation of human resource management strategies with a view to enhancing the level of knowledge, sharpening skills and also to instil the necessary attitudes and work culture. • the orientation and content of education are as important as resource allocation. there is a need to not only invest in basic education but also a greater emphasis is required on a technology oriented curriculum at higher levels to have appropriate supply response to market forces. • while the demand for social services has increased, the resources released by the governments for investment on such services have been