Education and Economic Growth in India

Author(s): S. C. Goel
Source: Comparative Education , Jun., 1974, Vol. 10, No. 2 (Jun., 1974), pp. 147-158
Published by: Taylor & Francis, Ltd.

Stable URL: https://www.jstor.org/stable/3098057

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COMPARATIVE EDUCATION Volume 10 No. 2 June 1974 147

Education and Economic Growth

in India*
S. C. GOEL

The main focus of this paper is on investigating the relationship between the l
and economic development in India during the period 1950-51 to 1970-71
examine if there exists a direct and significant relationship between the growt
the primary, secondary and tertiary levels, on the one hand, and econom
measured by the per capita income at current prices on the other. If so, wheth
interpreted as education-income relationship or as income-education effect. Th
for this purpose are nj, n2, n3, wci and pci [1] and the figures are incorpo
form in Tables I, II and III.
We note that there is a high and positive correlation between nj and pci (0-85
and pci (0-944394); between n3 and pci (0-958113); and between wci and pci (0-91
tion between the weighted composite index and the per capita income is a
the statistical relationship between the primary, secondary and tertiary levels
the per capita income. In view of the comparatively lower coefficient of corre
and pci, the greater the weight assigned to n2 and n3, the higher will be the c
wci and pci until a maximum value is reached. Therefore, the weights cannot b
nor a zero value given to primary enrolments, as in Harbison-Myers [2].
The coefficient of correlation is between the per capita income at consta
0-8329; it is 0-9345 for n2; it is 0-9555 for n3, and 0-8990 for wci. Thus values
than the coefficient of correlation between the per capita income at mark
variables. This shows the effect of rise in prices on the demand for education
in relation to various classes in the country who demand education.
It is necessary to emphasize that the coefficient of correlation establishes a d
relationship between two variables; it does not, however, establish a cause-a
ship. Many education-economists use the coefficient of correlation with this li
and yet draw inferences based on the cause-and-effect relationship. One of
which such inferences are not implied, is on 'Education and Economic Prog
Industrialized Market Economies' by M. C. Kaser and it was criticized on t
the Conference of the International Economics Association [3]. We, therefore, r
relationship between education and economic growth is not a causal relatio
and flower' relationship.
It is necessary to clarify that education seems to be more in the nature of an
and less as a cause of economic growth. Firstly, education is but one sub
factors that bring about economic growth, i.e. natural resources, labour,
capital. The formation of the human capital itself depends on several fact

* In preparing this paper, I have benefited immensely from the advice of Mr. M. C. Kase
Oxford. The views expressed in this paper are those of the author and do not necessarily
the University Grants Commission.

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 148 Volume 10 No. 2 June 1974

TABLE I. Education and Growth in India

Year ni n2 n. wci pci

1951-52 33-6 6-4 1.1 46-5 266-5
1952-53 34-1 6-8 1-3 48-2 274-2
1953-54 35-7 7-1 1-4 50-6 265-4
1954-55 37-5 7-2 1.5 52-8 278-1
1955-56 39-1 7-4 1-7 55-3 250-3
1956-57 41-4 9.1 1-8 60-5 255-0
1957-58 43-9 9-2 1-8 63-1 283-3
1858-59 45-3 9-7 2 0 65-9 279-6
1959-60 47-1 9-3 2-1 67-4 303-0
1960-61 48.7 10-6 2-2 71-2 306-3
1961-62 54-0 12-5 2-3 79-7 316-4
1962-63 56-8 13-7 2-6 85-2 327-6
1963-64 56.9 13-5 2-7 85-3 368-4
1964-65 59.7 15-0 3-5 92-7 423-2
1965-66 61-1 16-2 3-7 96-5 426-1
1966-67 61-6 17-0 3-8 98-5 482-9
1967-68 61-9 17-6 3-8 99-7 560-8
1968-69 60-8 18-4 4.4 103-6 554.7
1969-70 63-5 20-2 4.7 107-9 589-3
1970-71 64-3 20-4 5-4 111.1 633.1*
"* Estimated.

TABLE II

Coefficient of Regression
Correlation Equation
n, 0-850631 y=20-963352 + 0080095x - (a)
n, 0-944394 y = 1-322342 + 0-037002x - (b)
n3 0-958113 y= .811358 +0-009369x - (c)
wci 0-911617 y=16-029879+0-165323x - (d)

health, social security, nutrition and so on and when one speaks of in

it is just an aliquot of total education, which is a continuing life-long pro
Secondly, the fact that education contributes to economic growth direc
not mean that provision of more education brings about an accelerated ra
two do not make four in the calculus of human capital formation. Th
thesis that a country at a particular level of economic development shoul
of primary, secondary and higher education in proportions indicated
correlations, in order to reach the next higher level is short of being fan
that it does not prescribe an education-growth formula for transmission
[5]. In this grandiose plan, India is in the unique position of being a
development (semi-advanced) and level I (underdeveloped) of econom
were helped up the ladder and bitten by the snake simultaneously. Harbison
this to the famous Indian rope-trick of bringing about quantitative
expansion of education at all levels [6]; for this is one of the internal con

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COMPARATIVE EDUCATION Volume 10 No. 2 June 1974 149

TABLE III. Shape of the Educational Pyramid

Year nl/n3* n2/n3* n3= 1

1951-52 30 6 1
1952-53 26 5 1
1953-54 26 5 1
1954-55 25 5 1
1955-56 21 4 1
1956-57 23 5 1
1957-58 24 5 1
1958-59 22 5 1
1959-60 22 4 1
1960-61 22 5 1
1961-62 24 5 1
1962-63 22 5 1
1963-64 21 5 1
1964-65 17 4 1
1965-66 17 4 1
1966-67 16 4 1
1967-68 16 4 1
1968-69 14 4 1
1969-70 14 4 1
1970-71 12 4 1

"* Figures rounded.

of education. If education and e

we are caught in a vicious circl
drop-outs and deteriorating st
different [7]. The other constrai
power, an issue that cannot be se
Thirdly, we note from Table I t
has constantly gone up from
1965-66 to 1970-71 when the r
gone up except nj in 1968-69 a
current prices declined in the
variables for this phenomenon h
From the point of view of ana
be more important. Our first hy
education in the form of highe
and non-monetary benefits from
the decision to acquire educatio
to an increase in the demand for
increase in per capita income
in education and may be called
Whether education is treated as
private demand for education,
demand but the aggregate privat
more appropriately the level of
on the private demand for educa

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 150 Volume 10 No. 2 June 1974

preferences and the quality

demand to an essentially dy
purposes of analysis. One coul
the cost and if the rate of ret
the consumer and the quality
and in countries with low pe
mined primarily by the capac
The rate of public subsidy
demand for education. Educ
modation etc.-for the indiv
for the student who attends a
of schooling, except on part-t
cost and if there is a liberaliz
opportunity cost.
Another consideration which
an acquired taste and in that
value on the education of thei
another, the chances of the su
heredity and environment. P
nature of complementary go
demand for secondary and h
without first acquiring prima
to these levels of education.
An important characteristic of the decision of the individual or family to buy education at a
given price or to invest in education in view of the cost-benefit analysis is that it is a long-term
decision and, therefore, the expenditure on education is itemized in the budget of the family on a
long-term basis so as to include at least one particular stage of education. In India, the period of
gestation is five years for primary education; eleven to twelve years for secondary education and
fourteen years or more for higher (general) education. Within a given stage of education, there
may be drop-outs on account of the inability of the student to cope with studies or for reasons
of ill-health, indiscipline and unforseen circumstances but there will be fewer drop-outs owing
to the pecuniary circumstances of the family. This implies that in the income-education relation-
ship, we can ignore the short-term fluctuation in the per capita income and look only to the long-
term trends and more significantly to the anticipated long-term expectation of rise or fall in the
per capita income.
From the hypothesis that the demand for education grows with an increase in per capita
income, we shift our emphasis to the rate of growth and here, it seems that the most important
and relevant factor is the distribution of incomes. Education as an economic good is unique in
so far as the market will offer it in limited quantity only and that too spread over a period of time.
Therefore, households at a certain level of income calculate the economic and cultural costs and
benefits of education and demand it irrespective of the quality; households at a higher level of
income look to their tastes and preferences and the quality of the product and demand public
schools meant for the elite instead of the government school, engage private tutors and go in
for professional rather than the rut of general education and may even send members for training
abroad, where facilities are superior so that the finished product may fetch a higher price in the
local market, but in respect of all households, a point of saturation is reached when as individuals
they do not demand more of formal and institutionalized education. This means that, other
things being equal, the demand for education will grow faster when the flow of incomes is more
in favour of the poorer sections of the community, and as a corollary of this, the demand for
education will have a tendency to increase faster in the less developed regions as compared to
the more affluent geographical areas. We call this hypothesis (b) and examine whether in the

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COMPARATIVE EDUCATION Volume 10 No. 2 June 1974 151

absence of information regarding the dispersion of incom

respect of the less developed and more developed countries
available.
Table IV gives data regarding enrolments in higher education per 1,000,000 inhabitants for
1960 and 1968 [8] and the national per capita income in market prices expressed in current U.S.
dollars [9] in respect of 17 countries with per capita income more than 500 U.S. dollars in 1960.
Similar information for 19 countries with per capita income less than 500 U.S. dollars is given
in Table V.

TABLE IV. Countries with per capita income of more than 500 U.S. dollars (1960)

1 2 3 4 5 6 7

p.c. p.c.
Country pci pci increase n3 n3 increase
1960 1968 1960-68 1960 1968 1960-68

Austria 798 1414 77 2 547 715 30-7

Belgium 1126 1964 74-6 568 673 18-5
Denmark 1201 1552 29-2 618 1426 130-7
Finland 1001 1562 56-0 532 1171 116-3
France 1202 2292 90.7 595 1247 109-6
Federal Republic of Germany 1188 2005 68 8 499 716 73 5
United Kingdom 1276 1716 34-5 382 716 87 4
Canada 1909 2840 48.7 921 2423 163-1
United States of America 2559 3898 52 3 1983 3735 88-4
Argentina 529 811 34 8 875 1123 28-4
Israel 857 1324 54-5 738 1631 121-0
Italy 644 1317 104-5 386 797 106-5
Netherlands 890 1792 101-3 923 1445 56 5
Norway 1093 2044 87-0 258 1094 324-0
Sweden 1692 3126 84-8 500 1460 190-2
Australia 1438 2250 56.9 785 1368 74-3
Uruguay 503 647 9.1 616 662 7-5

The data in Tables IV and V confirms

is greater at higher levels of per capita in
income more than 500 U.S. dollars was
value of 229.5 in 1960 and 403-4 in 1968 i
dollars in 1960. The average rate of eco
between 1960 and 1968, was 62-6 in the f
which shows that the rate of economic
higher education. However, if we compar
percentage increase in n3, we find that c
of 1-59 as compared to an elasticity of 1-
highly significant and there are notabl
expansion of higher education has been
dicate that on the whole higher educat
countries. The fact that the rate of econo
of countries but their elasticities of the
that the educational gap between the t
values should not be carried too far, as it

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152 Volume 10 No. 2 June 1974

TABLE V. Countries with p

1 2 3 4 5 6 7

Burma 62 75 20-9 87 152 74-7

Ethiopia 40 57 42-5 5 16 220-0
India 70 79 12-8 158 273 72-7
Nigeria 69 77 11.6 5 16 220-0
Pakistan 78 125 60 3 161 299 85 1
Sudan 91 104 14-3 34 70 105-9
Egypt 127 189 78-9 413 569 37-8
Mexico 315 543 72-4 214 407 90-2
Bolivia 90 169 87 7 314 473 50-7
Brazil 196 254 20-6 135 320 137-0
Chile 245 562 129 8 331 566 70-0
Greece 399 821 105 8 352 844 139 8
Sri Lanka 134 141 5-2 51 141 142-9
Cyprus 494 692 40-1 417 446 6-9
Iran 179 302 68-8 92 215 133-7
Iraq 192 269 40-1 177 477 169-0
Japan 421 1231 192-4 762 1510 98-2
South Africa 387 612 58 2 364 380 4-4
Spain 317 730 130-3 288 790 70-2

It will be relevant here to mention that an

its member-countries during the period 1
tween the expansion pattern of higher educ
educational growth, for example, the wealt
scientific developments or the demographic
arbitrary nature of the growth pattern m
and statistical or analytical techniques are n
is one in which OECD countries have clearly
of "spontaneity" or autonomy' [10]. As a
of incomes in these countries, which is an
for education. It seems, however, that we ha
tion of incomes on the demand for educatio
the theoretical to the statistical plane.
We may now look to the growth of educat
higher levels. We observe that during t
per cent; n2 by 278-7 per cent; n3 by 390-9
trend to be observed during the period und
the demand for education has grown at a
grown more than that of primary and m
has grown more than the demand for sec
as a percentage of the age-cohorts but also
may be expressed by An37 An27 An1.
It is possible to ascribe the relationship An
nj7 n27 n3 and we must, therefore, look to
We find from Table III that expressed as
the shape of the educational pyramid in Ind
in 1970-71, which can be expressed as eit

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COMPARATIVE EDUCATION Volume 10 No. 2 June 1974 153

or the top of the pyramid having become flat. This may b

educated manpower in the country in response to changes in t
tional pyramid could change as a consequence of changes in
product of educational planning and policy in the country.
We first examine whether the change in the shape of the
be attributed to the frequent changes in and tinkering with t
first degree in arts, science and commerce or to the placement
course with the schools and under propitious circumstances wi
and degree courses, school education in India has also passe
ideas such as the multi-purpose school, the junior technical
consequence that the total duration of school and university co
Some of the existing patterns are: 10+2+3 in Assam, K
12 + 3 in Andhra Pradesh; 11+1+3 in Gujarat; 11+3 in Mad
Union territories of Andaman and Nicobar, Chandigarh, D
11 + 3 in Haryana, Panjab and Himachal Pradesh; and 11 + 2
Union territory of Arunachal Pradesh. In Uttar Pradesh tw
coexist; the former in all the State universities and the latter
and Banaras. It is difficult to construct a table that will take ac
from time to time but luckily, the edifice has remained fa
during the short periods also, we notice the same behaviour
and n2.
The other aspect of the problem is whether changes in the shape of the educational pyramid
may be traced to the allocation of resources, since the rate of public subsidy to education in-
fluences the private demand for education. The main test here is the public expenditure on educa-
tion per student, shown in Table VI for the years 1951-52 to 1967-68. The figures are for direct
expenditure only, since it is not possible to apportion several items of indirect expenditure, e.g.

TABLE VI. Average Cost per pupil in Rs. (Direct)

Higher Higher Teacher Teacher

(Arts and (Profes- Training Training
Year Primary Middle Secondary Science) sional) (Schools) (Colleges) e/i*
1951-52 21.3 39-0 75-9 233-1 821-1 255-7 836-8 1-3
1952-53 22.6 41.7 76-9 228-3 796-4 230-3 790-8 1-4
1953-54 22-2 43-3 79-5 224-5 756-8 229-3 670-1 1-5
1954-55 22-9 44-2 79-3 222-3 747-2 223-6 612-4 1-6
1955-56 23-4 40-4 79-8 222-9 745-6 236-7 583-0 1.9
1956-57 24-4 37-9 76-1 254-8 727-0 242-5 575-6 2-1
1957-58 26-9 41-0 83-6 282-1 710-4 293-0 541-4 2-1
1958-59 26-7 39*0 85-1 282.3 800-2 282-6 555-9 2-3
1959-60 26-9 39-6 88-6 306-4 758-4 311-7 412-5 2-4
1960-61 27-6 40-5 91-7 339-4 813-4 315-0 424-1 2-6
1961-62 28-0 40-2 93.9 361-8 827-0 322-5 432-4 2-8
1962-63 29-7 41-6 98-1 355-0 865-6 283-9 460-1 2-9
1963-64 29-9 42-4 102-7 352-0 885-8 279-9 490-7 2-8
1964-65 30-4 45-6 103-6 341-3 717-8 303-9 434-2 2-7
1965-66 34-6 50-4 111.1 301-6 757-6 320-3 429-8 3-0
1966-67 37-8 54.4 119-8 381-7 797-7 325-9 498-7 2-9
1967-68 39-0 69-3 139-1 396-8 862-2 381.6 556-8 2-9
* Total expenditure on education as a proportion of the National Income at current price

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 154 Volume 10 No. 2 June 1974

the expenditure on direction and

The direct expenditure compri
expenditure on libraries, labor
stationery, postal charges, teleph

TABLE VII. Percentage I

cost per pupil Direct (1

1. Primary Education 83 1
2. Middle Education 77-7
3. Secondary Education 83-2
4. Higher Education (General) 70-2
5. Higher Education (Professional) 5-1
6. Teacher Training (Schools) 49-2
7. Teacher Training (Colleges) - 33 5

Tables VI and VII indicate that the per capita expenditure on education increased
case of primary, middle and secondary education than in respect of higher educati
centage increase of 70-2 in regard to the per capita expenditure on higher educati
will be reduced further if account is taken of 5-1 per cent increase in the per capita ex
on professional education and 33-5 per cent decrease in the per capita expenditur
training colleges. There is no data concerning the apportionment of indirect expenditu
different levels of education but the fact that during the period in question, direct ex
increased more (from Rs. 1,01,674 thousand in 1951-52 to Rs. 6,64,922 thousand i
by 6-5 times) than the indirect expenditure (from Rs. 22,888 thousand in 1951-52 to R
thousand in 1967-68 or by six times) and the fact that the total direct expenditure on
of education is about five times the indirect expenditure would make it highly unlikel
per capita expenditure on higher education to have increased more than proportionatel
It will be observed from Table VI that although the expenditure on education as a pro
of the national income has gone up considerably, from 1-3 per cent in 1951-52 to
in 1967-68, the direct per capita expenditure on either primary or middle or secondary
education has not increased in the same proportion as the per capita income at cur
which increased by 110-4 per cent during the period 1951-52 to 1967-68. This im
greater part of the increase in the expenditure on education has gone into quantitative
and only a very small fragment, if any, has been utilized for qualitative improvem
account is taken of the price inflation during the period under review. In the context of
improvements being the central theme of educational planning in the country, it is no
stood how the salaries of teachers have not kept pace with the per capita income
prices; how teacher-pupil ratios, which are often used as an index of efficiency have de
at all levels of education; and while the percentage of trained teachers in the scho
up, the expenditure incurred on training a teacher has gone down.
It is clear that resources allocated to higher education have not improved either
or proportionately. Can we then attribute the greater demand for higher and secondar
tion to the present state of technology in the country or deduce that the social d
educated manpower at secondary and higher levels is more than the demand for person
up to the primary level: This, in our view, should be reflected in the private returns f
ment in education and here, we may look to the figures worked out by Mark B
for urban India (1960) and also bear in mind that earnings differentials are not marked
in rural and urban India, as shown by the Survey of Household Income, Savings an
Expenditure. The adjusted rates of return are: Primary over illiterate: 16-7 per cent; m

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 COMPARATIVE EDUCATION Volume 10 No. 2 June 1974 155

primary: 14-1 per cent; matriculation over middle: 9-9 per

and commerce over matriculation: 8-4 per cent [12]. If the
successive level of education, why is the demand in the
be explained by the distribution effect of income.
Let us think of the lower income group, the middle i
group and relate the demand for primary, secondary and
group. The rate of return analysis implies that if the dem
not grown in India in accordance with the private rate
become more accentuated all along the line during th
evidence in support of this conclusion [13], but this wo
evidence and is an issue into which we cannot go in the pr
George Psacharopoulos in his recent book Returns to
that since social returns from primary education are genera
or higher education, the law of equi-marginal returns requ
invest more in primary education in order to secure the m
education [14]. This seems to be an oversimplification f
Income and Income-distribution on the private deman
demand for primary education is very high; it is free a
yet the private demand for primary education has lagged
that primary education yields higher private and social
treated as a guide to investment decision. We can have bett
demand for primary education only with the growth o
dispersion of the benefits of economic development.
We may now deal with some aspects of the social dem
the context of the Fifth Five Year Plan. The social dem
based on assumptions regarding enrolment targets laid dow
view the constitutional directive of free and compulsor
45). On the other hand, the plans for secondary and hi
simple trend projections of a linear form that assume t
plans relating to enrolments in the secondary and tert
hurry through exercises of different kinds marked by vag
tion and diversification of secondary education to make it
its uni-linear character and pious resolutions to exercise
education. The plans do not take into consideration the beh
the effect of the growth and distribution of income on th
complementary nature of the different levels of education
to grief in the past by over-estimating the demand for pr
the demand for secondary and higher education.
Some of the proposals that are under consideration in
bearing on the demand for education are outlined below
(i) It is proposed to make an effort to provide 100 per
and 75 per cent enrolment in the age-group 11-14 by the e
education for all children in the age-group 6-14 could be p
(ii) The large-scale failures and wastage at different le
siderably by placing emphasis on qualitative improvements
(iii) Secondary education will be vocationalized to make
planned development in the country. This will also mak
number of students.
(iv) Admissions to the universities and colleges will be regulated by relating them to the
available facilities in the university departments and affiliated colleges in respect of various
courses.

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 156 Volume 10 No. 2 June 1974

(v) It is proposed to exercise

versities and colleges.
These formulations have perv
since the publication of the F
our will to implement them h
which was meant to be a con
organization of secondary edu
to provide cadres of leadershi
to multiply universities on
comprehensive objectives, v
secondary education that would
of wastage and stagnation at
(general) education and increas
universities [16]. The last one
and was consequently droppe
for the education of all childr
[17] was changed to 'priority
Plan' [18]. The purpose of pr
the realization of our object
Social objectives cannot be mo
private demand based on soc
We have already mentioned
country like India faces in e
education universal. There a
education for the outlay of R
would hardly be adequate to m
education.
Vocationalization of secondary education to make it relevant to the needs and requirements
of the economy is a desideratum but this can be translated into action only on the basis of proper
estimation of private demand. Otherwise, the experience of the earlier plan periods when some
of the polytechnics and industrial training schools had to be closed down owing to lack of
demand for places may be repeated. The provision of vocational courses will, however, not
make school education terminal. Changes in the shape of the educational pyramid in India
between 1951 and 1971 show that relatively more students proceed to higher education from the
stream of secondary education; which means that secondary education has become less effective
as a terminal point. The explanation for this lies in greater flow of additional incomes to the
upper middle and richer classes; while the demand for technical education at the lower levels
of certificate and diploma comes from the relatively lower income groups, whose decisions do
not have a material effect on the demand for higher education.
We now apply the regression equations developed in Table II to have an estimate of the
demand for education in the Fifth Plan. The proposal to extend the base of primary and middle
education to provide 100 per cent enrolment in the age-group 6-11 and 75 per cent enrolment in
the age-group 11-14 by the end of the Fifth Plan implies that n, will be equal to 92-4 in 1978-79.
According to regression equation (a) this will be feasible if our per capita income at current
prices rises to Rs. 894 in 1978-79. This will need to be checked with the assumptions made in
the Fifth Plan regarding the rate of growth of the economy and increases in the price of crude oil
from time to time. If it is assumed to be a realistic figure, and if we assume that cataclysmic social
change is a rate phenomenon, our estimates on the basis of regression equations (b), (c) and (d)
will be: n2= 3176; n= 7"59; and wci= 163-54 in 1978-79. This is on the basis of changes in per
capita income only; if our objective to reduce wastage and stagnation at all levels is realized, the
figures for n1, n2 etc. will be correspondingly higher.

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COMPARATIVE EDUCATION Volume 10 No. 2 June 1974 157

REFERENCES

[1] nx is enrolment in the primary (classes I to V) and middle (classes VI to VIII), express
of the age-cohort 6-14.
n2 is enrolment in classes IX-IX/XII or the secondary level expressed as a percentage
cohort 14-17.
n3 is enrolment at the university stage including general arts and science and professional courses,
expressed as a percentage of the age-cohort 17-24. Source for n1, n2 and n3: Ministry of Education
and Social Welfare brochure Education in India since Independence-A statistical Review, 1972.
wci or the weighted composite index is the weighted sum of n1, n2 and n3; the weights being 1, 1-5
and 3 which have been assigned on the basis of earnings differentials between the earnings of educated
persons and those with no formal education as observed in the surveys on (1) Urban Income and
Savings, National Council of Applied Economic Research, New Delhi, 1961, p. 53, and (2) Household
Income, Saving and Consumer Expenditure. NCAER, New Delhi, 1972, p. 65.
It may be mentioned in this connection that Frederick Harbison in his paper on 'Quantitative
Indicators of Human Resource Development' makes use of the arithmetic total of (i) enrolment at
second level of education as a percentage of the age-group 15-19 adjusted for length of schooling
and (ii) enrolment at the third level (higher education) as a percentage of the age-group, multiplied
by a weight of 5. (The Economics of Education, edited by E. A. G. Robinson and J. E. Vaizey,
Proceedings of a Conference held by the International Economic Association, Macmillan, St. Martin's
Press, New York, 1966, pp. 357-358.) Later findings show that the coefficient of correlation would
be maximized for the composite index and GNP per head if a weight of 5-9 is used. (Sen 1966.)
pci or per capita income at current prices is based on the figures of the Indian Central Statistical
Organization. Beginning from August, 1967, the CSO has been using a revised income series with
1960-61 as the base year, which makes the figures for 1950-51 to 1959-60 and 1960-61 to 1970-71
incomparable. Apart from changing the base year, the CSO has also introduced changes of a con-
ceptual nature based on methodological studies conducted by it and improvements in primary
statistical data. For discussion of the new methodology, refer to Brochure on Revised Series of
National Product for 1960-61 to 1964-65, Central Statistical Organization, New Delhi.
[2] Economics of Education, op. cit., pp. 357-58.
[3] Economics of Education, op. cit. Criticism of Dr. Denison on p. 620 and the observations of
Professor Robinson on p. 623. The paper of M. C. Kaser can be seen on pp. 89-173.
[4] It is interesting to note the following opening sentence in the chapter on Education in the Second Five
Year Plan, Planning Commission, New Delhi, 1956, p. 100, 'The system of education has a
determining influence on the rate at which economic progress is achieved and the benefits which can
be derived from it.' However, no foundation has been laid for this generalization.
[5] FREDERICK HARBISON & CHARLES A. MYERS: Education, Manpower and Economic Growth,
Strategies of Human Resource Development, McGraw-Hill Book Company, 1964. It is suggested that
on the average, the typical level II country can double its GNP per capita within a 15-20 year
perspective planning-period by 50 per cent expansion in primary education, doubling of secondary
education and threefold expansion of higher education. P. 100.
[6] Ibid., pp. 116-19.
[7] A Conference on the future structure and curricula of higher education in Britain was held on
January 5-7, 1971, at Cambridge. Everyone at the conference rejected the Kingsley Amis view that
'more means worse' and discussed the question whether 'more means different'. See Nature,
January 15, 1971.
[8] Source: UNESCO Statistical Year Book, 1970. Data presented concern all institutions of education at the
third level, i.e. degree granting and non-degree granting institutions of higher education of all types,
both public and private. The figures include part-time students but those for correspondence courses
are generally excluded.
[9] Source: UN Statistical Year Book, 1972, table 187, National Income, for most of the countries,
estimates have been prepared by converting the official figures by the prevailing exchange rates.
[10] The OECD observer, N. 50/February, 1971-quoted from Indian UGC Information Paper
IX/5/1971, p. 20.
[11] Source: Ministry of Education brochure, Education in India since Independence-A Statistical
Review, 1972.
[12] The Causes of Graduate Unemployment in India, p. 219. Allen Lane, The Penguin Press, Lbndon, 1969
The above rates are for oc =0.65 and without making allowance for the rate of growth.
[13] According to the Survey of Household Income, Saving and Consumer Expenditure, op. cit., the
inequality in income is seen to have increased in rural India between 1962 and 1967-68; the con-
centration ratio having gone up from 0.41 to 0.46. In urban areas the concentration ratio has gone
down from 0.49 in 1960 to 0.45 in 1967-68. When account is taken of the share of the urban sector

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158 Volume 10 No. 2 June 1974

being only about 27 per cent of t

country as a whole, inequalities h
[14] GEORGE PSACHAROPOULOS: R
Co., 1973, pp. 76-77.
[15] The First Five Year Plan, Go
[16] Second Five Year Plan, Gove
[17] Third Five Year Plan, Gover
[18] Fourth Five Year Plan, Gove

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