An economic aspect of human capital formation

Education in every sense is one of the fundamental factors of economic development. No country can achieve sustainable economic development without substantial investment in human capital. . In fact, Economic development is a complex process in which financial and human capital are combined in sophisticated and productive ways, and that is why certain countries advance in this process much more rapidly than others. So the human capital and physical capital are both required for economic development and that each has a positive external effect on the productivity of the other. No nation could achieve sustainable economic development without substantial investment in human capital. From the point of view of Economics teachers may be considered as suppliers of inputs and employer may be supposed to be suppliers of output in the form of service. Hence employer's objective should be to maximize net return. Here output is quality education provided to the student community and it is not quantifiable, where as costs involved in providing such quality education is quantifiable. Thus net return is measured in terms of extent of quality education provided at the cheapest possible cost. Usual maximization exercise cannot be carried out here, as both of the benefits and cost are not measured in same unit. The most appropriate economic tool that can be exploited to analyse the situation is cost-benefit analysis and therefore the optimal situation requires attainment of greatest possible benefit at cheapest possible cost. Coming to the case of operational part only feasibility open to the employer is to ensure minimal wastage and therefore salary must be dependent on the extent of quality education provided to the student community. process by which quality education can be imparted is to cultivate professionalism in teaching and the most economic way of ensuring cultivation of professionalism is to make gross salary dependent on the performance of a teacher. The object of my article is to discuss the economics of professionalism in this noble profession. Here I have tried to provide some effective measures, which will incorporate professionalism in teaching in most economic way. The term professionalism refers to dedication towards the profession. Therefore professionalism in teaching includes retention of teaching skill, feeling comfortable to teach various papers within the reasonable limit, willingness to expand knowledge and so on. Hence our objective is to identify some factors, which will economically determine the salary of teachers having some factors, which will economically determine the salary of teachers having some professional character. Section-I of this article deals with determination of Basic Pay, Section- Il deals with determination of Gross Salary, section -Ill deals with modification of promotional scheme, Section– IV deals with economics of the scheme prescribed and section- V contains concluding observations.