Question

Medhya and Danish both had their own farms. Medhya invested in a few agricultural courses, learnt modern farming techniques, and trained her labourers on best practices related to soil fertility, crop management, pest control, etc. Whereas, Danish invested heavily in purchasing advanced farming machinery, irrigation systems, and high-quality seeds. Do you agree that Danish had made investment in human capital? Give valid reason in support of your answer.

Hint:

Human capital investments focus on improving the skills and capabilities of individuals, while physical capital investments involve tools, equipment, and infrastructure.

Answer 1

No, Danish's investments do not constitute investment in human capital. While Medhya's investment in agricultural courses and training her labourers focuses on enhancing their skills and knowledge, which directly contributes to human capital development, Danish's investment in machinery, irrigation systems, and seeds pertains to physical capital rather than human capital. Human capital refers to the investment in people’s skills, education, and training.