Forms of Capital

Forms of Capital:

1. Physical Capital or Material Resources
2. Money Capital or Monetary Resources, and
3. Human Capital or Human Resources

Physical Capital:

All man-made physical belongings such as plant and machinery, roads, tools, buildings, dams and communication, and so on, are the different forms of physical capital.

Characteristics of Physical capital:

(a) It is a positive feature that has a particular life period.

(b) Physical capital asset can be employed in production again and again.

As an outcome, it undergoes wear and tear or reduction.

(c) Whenever employed in production, it provides a series of annual income flows termed as annuities, throughout its life period.
Accumulation of more and more physical capital is termed as physical capital formation.

Money Capital:

The investment which is made up in the form of money or monetary instruments is termed as money capital. A household saves its income in the form of shares, bank deposits, and securities or other monetary tools. Such are the sources of money capital.

Human Capital:

Human capital refers to the excellence of labor resources that can be enhanced via investments in training, education, and health. Higher the investments in human capital, higher will be productivity.


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