The correct answer is Both 1 and 2.

• Physical capital is tangible and can be easily sold in the market like any other commodity.
• Human capital is intangible; it is endogenously built in the body and mind of its owner.
• Human capital is not sold in the market; only the services of the human capital are sold and, hence, there arises the necessity of the owner of the human capital to be present in the place of production. Hence both statements are true.

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• Nature of benefits flowing from human capital are different from that of physical capital. Human capital benefits not only the owner but also the society in general. This is called external benefit.

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• Human Capital Index is released by World Bank.
• As part of  World Development Report (WDR), the World Bank has launched a Human Capital Project (HCP).
• India ranked 116th among 174 countries in 2020 Human Capital Index.
• Human Capital Index has three components-
  • Survival
  • Expected years of quality adjusted school
  • Health Environment

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• UNDP releases Human Development Index.
• India was ranked 129 out of 189 countries on the 2019 Human Development Index (HDI).