With reference to the financing of education in India, consider the following statements: 1. The government spends more on tertiary education per student than on elementary education. 2. Economists argue that financial resources should be transferred from elementary to tertiary education. 3. Expansion of school education requires more teachers trained in higher educational institutions. Which of the statements given above is/are correct?

Correct Option The correct option is 1 and 3 only. Explanation Education financing in India involves the allocation of public resources across various levels of the educational pyramid. This allocation is analyzed based on per-capita expenditure, social rates of return, and the structural interdependence between different levels of education. Statement-wise Analysis - Statement 1 is Correct: The government expenditure per student on tertiary (higher) education is significantly higher than that on elementary education. Tertiary education is capital-intensive, requiring specialized infrastructure, advanced laboratories, and highly qualified faculty, which drives up the per-student cost relative to primary schooling. - Statement 2 is Incorrect: Most development economists argue that the social rate of return on elementary education is higher than that on tertiary education. Therefore, the consensus is that public resources should be prioritized for elementary education to ensure universal access and equity. Arguing for the transfer of financial resources from elementary to tertiary education contradicts the established economic principle that elementary education is a merit good requiring substantial public funding. - Statement 3 is Correct: The different levels of education are complementary. The expansion and quality of school education depend on the availability of qualified teachers. Since teachers are trained in higher educational institutions (colleges and universities), the tertiary sector is essential for supplying the workforce required to expand and maintain the elementary education system. Key Takeaway: While per-student spending is higher in tertiary education, economic theory prioritizes elementary education for public funding due to higher social returns. However, the sectors are interdependent, as higher education provides the trained personnel necessary for the schooling system.

NCERT Class 11 Economics — Chapter 5: Human Capital Formation in India

mcqhard

With reference to the financing of education in India, consider the following statements:

The government spends more on tertiary education per student than on elementary education.
Economists argue that financial resources should be transferred from elementary to tertiary education.
Expansion of school education requires more teachers trained in higher educational institutions.

Which of the statements given above is/are correct?

Official previous-year question

Verified 1 Aug 2026.

Options

A1 and 2 only
B1 and 3 only
C1, 2 and 3
D2 only

Did you get this right?

Solution

Correct Option

The correct option is 1 and 3 only.

Explanation

Education financing in India involves the allocation of public resources across various levels of the educational pyramid. This allocation is analyzed based on per-capita expenditure, social rates of return, and the structural interdependence between different levels of education.

Statement-wise Analysis

Statement 1 is Correct: The government expenditure per student on tertiary (higher) education is significantly higher than that on elementary education. Tertiary education is capital-intensive, requiring specialized infrastructure, advanced laboratories, and highly qualified faculty, which drives up the per-student cost relative to primary schooling.
Statement 2 is Incorrect: Most development economists argue that the social rate of return on elementary education is higher than that on tertiary education. Therefore, the consensus is that public resources should be prioritized for elementary education to ensure universal access and equity. Arguing for the transfer of financial resources from elementary to tertiary education contradicts the established economic principle that elementary education is a merit good requiring substantial public funding.
Statement 3 is Correct: The different levels of education are complementary. The expansion and quality of school education depend on the availability of qualified teachers. Since teachers are trained in higher educational institutions (colleges and universities), the tertiary sector is essential for supplying the workforce required to expand and maintain the elementary education system.

Key Takeaway: While per-student spending is higher in tertiary education, economic theory prioritizes elementary education for public funding due to higher social returns. However, the sectors are interdependent, as higher education provides the trained personnel necessary for the schooling system.

Your note

More from Chapter 5: Human Capital Formation in India

"A sick labourer without access to medical facilities is compelled to abstain from work and there is loss of productivity." This statement highlights the importance of which source of human capital?

easy

With reference to the concept of ‘Human Capital’, consider the following statements: 1. It refers solely to the physical strength of the workforce. 2. Unlike physical capital, human capital is not perfectly mobile between countries. 3. Human capital formation is not solely a conscious decision of the possessor. Which of the statements given above is/are correct?

medium

Consider the following statements regarding the sources of human capital formation: 1. Social medicine refers to the use of medicine for social gatherings. 2. Preventive medicine includes vaccination. 3. Provision of clean drinking water is unrelated to health expenditure. Which of the statements given above is/are correct?

easy

With reference to ‘On-the-job training’ as a source of human capital, consider the following statements: 1. It may involve training workers within the firm or sending them for off-campus training. 2. Firms incur expenses on training as a charity without expecting returns. 3. Workers are often required to work for a specific period after training. Which of the statements given above is/are correct?

medium

Consider the following statements regarding the relationship between human capital and economic growth: 1. Empirical evidence proves a clear cause-and-effect relationship from human capital growth to economic growth in developing countries. 2. Higher income causes the building of a high level of human capital and vice versa. 3. Convergence in human capital measures has not led to a convergence in per capita real income. Which of the statements given above is/are correct?

hard

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Correct Option

The correct option is 1 and 3 only.

Explanation

Statement-wise Analysis

Statement 1 is Correct: The government expenditure per student on tertiary (higher) education is significantly higher than that on elementary education. Tertiary education is capital-intensive, requiring specialized infrastructure, advanced laboratories, and highly qualified faculty, which drives up the per-student cost relative to primary schooling.
Statement 2 is Incorrect: Most development economists argue that the social rate of return on elementary education is higher than that on tertiary education. Therefore, the consensus is that public resources should be prioritized for elementary education to ensure universal access and equity. Arguing for the transfer of financial resources from elementary to tertiary education contradicts the established economic principle that elementary education is a merit good requiring substantial public funding.
Statement 3 is Correct: The different levels of education are complementary. The expansion and quality of school education depend on the availability of qualified teachers. Since teachers are trained in higher educational institutions (colleges and universities), the tertiary sector is essential for supplying the workforce required to expand and maintain the elementary education system.