Existing 'human resource' is further developed by becoming more educated and healthy, which adds to the productive power of the country just like 'physical capital formation'. So, human resource is the most important resource.
Steps to be taken to improve quality of human resource: Quality of human resource can be improved through better education, food and health facilities. The quality of population depends upon the literacy rate, health of a person indicated by life expectancy and skill formation acquired by the people of the country.
Role of improved quality of human resource in establishing a virtuous cycle:
Better contribution to productive power of country: Existing human resource with good educational background can acquire specific skills in a better way and can contribute to national productivity more efficiently.
Higher earnings and greater contributions to society: Improved quality of human resources can give higher rates of return in future in the form of higher earnings and greater contributions to society.
