How does investment in human capital contribute to growth?

Investment in human capital contributes to economic growth a lot because the labour skill of an educated person is more than that of an uneducated person and he/she generates more income. Economic growth means the increase in the real National Income of a country, hence healthy persons could provide uninterrupted labour supply for a longer period of time. So, investment in both education and health along with many other factors like on the job training, job market information and migration to increase an individual's income generating capacity. Empirical evidences have shown that increase in human capital causes

economic growth at a much faster rate, but, unfortunately the growth in human capital and economic development does not result in the growth of per capita real income at the same speed as in the economic growth.

India recognised the importance of human capital in economic growth long ago. The Seventh Five Year Plan says 'Human resources development has necessarily to be assigned a key role in any development strategy, particularly in a country with a large population. Trained and education on sound lines, a large population can itself become an asset in accelerating economic growth and in ensuring social change in desired directions'. The following table shows how the different sectors of the economy have grown simultaneously.