Significance of Wastage in Supply and Demand Calculus
Wastage refers to the phenomena of under or non-utilisation of a product by the stakeholders for whom it was produced. Such under/non-utilisation eventually results in the appreciation/increase of the unit cost of production. The resources employed for production get wasted. A few illustrations in this context would be useful for clarifying this understanding. A school is set up with a capacity to enroll, let us say 250 children in I to VIII standards. All facilities are established for this purpose. There are 250 children of school-age, 6 to 14 years. If there is no full enrolment of children, to that extent there is wastage. If after enrolment, children leave school mid-way before completing the specified number of years of stay/study, again there is wastage. Hence, non-enrolment and drop-out of children constitutes wastage in education (school-education in this illustration).
Nearly 50 per cent of total enrolment in general/higher education in India is in B.A. degree courses. There are both private and public expenditures on accessing this degree. However, a large number of persons with B.A. qualifications remain unemployed or engage in jobs for which senior secondary qualification is sufficient. To this extent, the expenditure, whether private or public or both, on acquiring a B.A. degree is a wastage. Proper and meaningful manpower planning and supply of educational facilities to produce this manpower would minimise the wastage to a large extent. Manpower planning in a market economy where there is scope for large scale privatisation is a challenging exercise.