(a) Acc. to Thomas, “Labour consists of all human efforts of body or mind, undertaken in expectation of a reward.” Labour is the human resource of production. It always indicates some kind of mental or physical exertion undertaken with a motive to earn money.
Following are the methods to improve the efficiency of Indian labour :
1. The payment of wages should be fair and prompt. Bonus (i. e., a part of profit) must be given to workers as an incentive to hard work.
2. Hours of work should not be more than eight hours. Other facilities like holidays, leaves etc. should also be provided to the workers without further delay.
3. Social security measures such as insurance schemes, provident fund contribution, pensions etc. should be introduced.
4. Working conditions in the factories/workplace should be improved.
(b) Capital Formation :
Capital formation means the creation of capital. A change in the stock of any capital during a particular period of time is called capital formation. Three important stages of capital formation are creation of savings, mobilisation of savings and investment of mobilised savings.
Reasons for the slow rate of capital formation in India :
(i) Lack of ability to save : Because of poverty, poor people are unable to save more than a negligible part of their earnings. Hence, a low rate of savings leads to a low rate of capital formation in the’Indian economy.
(ii) Lack of willingness to save : In certain parts of the country, there still exists a feudal economic system. Even people who have the ability to save money are not willing to save and spend all their money on day-to-day consumption.
(iii) Insufficient mobilisation of savings: People are not mobilising the savings for capital formation. Most of their savings are kept in the form of gold and cash at home. These savings are not used productively because of poor banking knowledge and a poor banking network in underdeveloped states.
