In a developing country like India, a large section of the population is living below the poverty line. Many of them cannot afford to access to basic education and health care facilities. They cannot afford super speciality health care and higher education. Hence low level of education and health are the main problems of human capital formation. When basic education and health care is considered as a right of the citizens, it is the duty of the government to provide these facilities. Per capita expenditure on health and primary education is not sufficient. At least 6 percent of the GDP should be spent on education, but the current level is only 4 percent which has been quite inadequate

Inspite of a provision in our constitution to provide free and compulsory education up to the age of 14, progress in this sector is far short of the target. The enrolment ratio in schools is not satisfactory. There is shortage of qualified teachers in the schools. In elementary education the dropout rate is very high.