Let us take P be an individual who has had no primary or higher education. His human capital is zero and hence it bears no returns. Let Q be an individual who completed his MBA from ABC college and let R be an individual who completed his MBA from IIM Ahmadabad. The average rate of return for an MBA student is 7.5% (hypothetical). Q gets a rate of return of 5% and R gets a rate of return of 10% due to the difference in the reputation and quality ofthe management school. Let the income of P, Q and R be 1.In a period of 10 years, P will be having the same income as he does not possess human capital. For the same time period Q will earn an income of(1+0.05)^10=1.63 and R will earn an income of (1+0.10)^10=2.59. Now lets see what happens when the rate ofreturn on human capital doubles. Earnings of P will not change since he does not have any human capital. Now Q is going to earn (1+0.10)^10=1.63 and R is going to earn (1+0.20)^10=6.19. Flabbergasting! As soon as return on human capital increases proportionately income inequality increases. With return on human capital doubling, Q’S income increases by 59% and R’s income increases by 139%.
The above example just shows the effect of the quality of human capital n income inequality. So if the government does not improve education system particularly in rural areas the rich will become richer and the poor will get poorer.
Now lets talk about our Engineering system. A student who joins engineering doesn't think how his 4 years will go rather he thinks about the job after his engineering most probably a software job irrespective of the branch. A student may be in ECE or EEE or MECH or what ever may be he plans of a job in software... Whatever he learns in 4 years, he kicks it out and opts for software job. We feel proud to say that India has got the best software engineers, but we don't realize that software engineering is the thing which is making the situation of India like this. The teaching culture in engineering is also "THE WORST" . Most of the faculties are incapable for their jobs. The system circulates around for attempting those 5 questions out of 8 ( in our education system and probably its the same all over India). The standards should be increased not only in the question papers but also in the ways of teaching and the outdated books.
Today is the age of innovation and specialisation. And with this fast moving techno-age, the Indian educational system seems to go nowhere. Though we are aware about the progressive minds of Indian students all over the world, we tend to overlook the fact that most of them find abode abroad in USA or Australia. Let us focus on some stark realities.
Indian education is full of innumerable pages of obsolete, outdated theory with no innovation or any practical work. The eagerly awaited new textbooks have nothing more than flashier cover pages. Moreover no importance is given to co-curricular activities. All this results in an all Indian sundae comprising of bored students who consider studies as an interminable disease and teachers who are victims of disinterest. This also increases suicides among students.It is high time educationists start moving with the times. They need to realise that they can no longer continue to burden the youth with unimaginable pressure and simultaneously provide miniscule encouragement to pursue their creativity. An entirely new approach has to be adopted which focuses upon innovation and practical aspects of education. And the sooner this reform is brought, the better it is for us.
