India up five slots but still 130th on HDI : Urgent need to empower human capital

Dr. Devendra Kothari

Population and Development Analyst

Forum for Population Action

Wishing an upbeat and fruitful 2016!

“The biggest challenge (facing India) is to diffuse access to education, skills, health, in a more inclusive manner.”

Thomas Piketty

Author of book ‘Capital in the 21^st Century’

As we draw in 2016, the world is looking to India to play a crucial role in the new global order. The axis of global balance of power, as noted by the Times of India in its editorial, is shifting to the Indo-Pacific region and India must step up and deliver.[1] India can be an economic superpower and “the 21st century could be an Indian century”, but its policy makers need to agree on some fundamentals first. For India to live up to its potential it needs to empower its human capital. That is the only way the country can leapfrog transitional phases and achieve inclusive and sustainable development. India today, with 17.6 per cent of global population, produces only 2.6 per cent of world GDP. Clearly India’s tryst with destiny, promised on the first Independence Day in 1947, still remains elusive. We have to recognize that economic growth will not reduce poverty, improve equality, generate jobs and secure livelihoods unless it is backed by the sound human development policies.

The first Human Development Report 1990, published for the United Nations by the United Nations Development Programme (UNPD), defines human development as denoting “both the process of widening people’s choices and the level of their achieved wellbeing”. It further states: “the primary objectives of development is to benefit people and income is not the sum total of human life”. In other words, the human development approach is about expanding the richness of human life, rather than simply the richness of the economy in which human beings live.

The latest Human Development Report, released by UNDP on December 14, 2015, does not speak very high about India’s achievement in enlarging people’s opportunities and improving their well-being. The commenting on the findings,   Bill Gates and Ratan Tata noted:  “Human capital is one of India’s greatest assets. Yet, the world’s fastest growing economy hasn’t touched millions of Indian citizens at the bottom of the economic pyramid”.[2]

In the latest report, India ranked a lowly 130 in the Human Development Index (HDI) even if up from last year's 135 in the list of 188 nations. The HDI is an average measure of basic human development achievements in a country. It is a summary measure for assessing long-term progress in three basic dimensions of human development — a long and healthy life, access to knowledge and a decent standard of living. A country scores higher HDI when the life expectancy at birth is longer, the education period is greater, and the income per capita is higher. Countries are being divided into four broad human development categories: Very High Human Development, High Human Development, Medium Human Development and Low Human Development.

Among India's neighbors, Bhutan and Bangladesh too figure in the ‘medium human development’ category like India.  Nepal (Ranked 145), Pakistan (147) and Myanmar (148) are in the 'low development' category, while Sri Lanka (73) is in the 'high development' category. China with rank 90 too figured in this category. Norway (Ranked 1), Australia (2), Germany (6), USA (7), Canada (9), UK (14) and Japan (20) are in the ‘very high development’ category.

Stagnancy in education, health especially reproductive health, women's empowerment, poverty, living conditions, and level of urbanization continue to drag India down, keeping it in the medium human development category.

According to the UNDP, the expected years of schooling is stagnant at 11.7 years since 2011. Also, mean years of schooling at 5.4 years has not changed since 2010. In addition, quality of education is very poor from bottom to top. There may be many reasons behind this sorry state of affairs, but the issue of unwanted fertility has also played an important role in lowering the quality of education. [3]

India’s galloping population is mainly fueled by unwanted fertility (defined as actual fertility in excess of desired fertility). More than four in ten pregnancies are unintended/unplanned or simply unwanted by the women who experience them and half or more of these pregnancies result in births that spur continued population growth.  Mainly, this is a result of poor reproductive health services. It is estimated that around 480 million persons out of 1285 million in India in 2015 were the result of unwanted pregnancies. With such a large number of people resulting from unwanted pregnancies, how can one think about enhancing the quality of human resources and using them for the nation building?  It is because unwanted childbearing results in poor physical growth, reduced school performance, diminished   concentration in daily tasks thus impacting work capacity and work output resulting in diminished productivity or earning capacity.[4]

Productivity, a measure of the efficiency of the human capital, can be measured by per capita Gross Domestic Product (GDP).  India has become the tenth largest economy in the world in terms of GDP that is the sum of total production by all the people of a country; however, it has a very low per capita GDP. The country was placed at the 148^th position among the 187 countries in 2014, as per the World Bank. This is perhaps the most visible challenge. China’s GDP per capita value in the corresponding year was more than four and half times that of India.

The wide spread gender inequality reflects in three dimensions - reproductive health, empowerment, and economic activity. In India, 12.2 per cent of parliamentary seats are held by women, and 27 per cent of adult women have reached at least a secondary level of education compared to 56.6 per cent of their male counterparts. For every 1,00,000 live births, 190 women die from pregnancy related causes; and the adolescent birth rate is 32.8 births per 1,000 women of ages 15-19. Female participation in the labour market is 27 per cent compared to 79.9 per cent for men. Women's workforce participation has also declined from 35 per cent in 1990 to 27 per cent in 2013. In India, 80% of women are unbanked. By contrast, in Japan and South Korea, more than 90% women have bank accounts.

The fact is that South Asia has now exceeding Sub-Sahara Africa in many indicators of hunger largely because of India.  Notably, over half of India's total employed are working poor, according to the international poverty line (PPP $2 per day). China has done extremely well in reducing hunger and poverty. Winner of the 2015 Nobel Prize in Economics Prof. Angus Deaton, who spent a considerable amount of time working on the ‘stunting’ among Indian children, concluded that widespread growth faltering was a human development disaster  as height reflected early life nutrition which helps brains to grow. “There are tremendous health problems among adults and children in India…half of the children are still malnourished”. [5] One has rightly summarized: “Make in India cannot happen if the children 'made in India' are stunted, wasted and underweight”.  Absolutely

Better physical living conditions are equally needed to create enabling environment for human development.  Only 47 per cent of households have a source of water within the premises while 53% of households travel more than a kilometre in rural areas and more than 100 meters in urban areas to fetch their supplies, as per the findings of Census 2011. This problem is further compounded by lack of access to sanitation. About half of total households in India still defecate in open. This situation is particularly piquant for women and girls.  Any improvement in access to toilet facilities, water, electricity and LPG is likely to result in a considerable reduction in domestic drudgery especially for girls/women, freeing up their time for other activities including schooling and perusing professional life. In addition, there is an urgent need to shift labour to urban areas but the level of urbanization in India, unlike the experience of several Asia’s miracle economies, has been quite low and stagnant.

In addition, there is an urgent need to shift labour to urban areas. Agriculture contributes hardly 12-13 per cent of GDP but employs more than 50 per cent of total workforce.  It is interesting to note that level of urbanization in India, unlike the experience of several Asia’s miracle economies, has been quite low and stagnant.

In sum, main concern today is the impairment of human potential — which is not allowing India to reap its demographic dividend as well as to move into the higher level of human development category. In other words, the fate of Indian economy will depend on as to how and how quickly we unlock the human potential. And the technology is well within our grasp – only the will is needed.  It is high time that political parties focus on improving people’s ability to earn more rather than dolling out subsidies that make people dependent on the political class and system, and that also slowdown the process of human development. This requires more painstaking but planned effort towards focusing on some real interventions concerning human development. In my opinion, the answer rests on the following five pillars, as discussed in my earlier post entitled: Growth with structural transformation: A development agenda for India. [6]

1.    Stabilizing population by reducing level of unwanted fertility,

2.    Ensuring quality education,

3.    Enhancing physical living conditions,

4.    Reducing gender inequalities, and

5.    Shifting labour to urban areas.

Prime Minister Modi swept India in 2014 because he offered a positive message of hope.  India’s tryst with destiny still beckons. Here is hoping   2016 will catapult India into a high growth trajectory by initiating process of human development

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[1]  Refer: http://blogs.timesofindia.indiatimes.com/toi-editorials/tech-tonic-shift-how-2016-will-see-digital-solutions-empower-the-india-story/

[2] For details, refer at:  http://blogs.timesofindia.indiatimes.com/toi-editorials/new-nutrition-report-underscores-the-importance-of-leadership-in-addressing-stunting-in-india/ 

[3] Kothari, Devendra. 2014. Education in India needs intensive care, not a quick fix, RAEA Policy Paper No. 1. Rajasthan Adult Education Association, Jaipur.

[4]  Kothari, Devendra. 2014. “Managing Unwanted Fertility in India: Way Forward”, Institute of Economic Growth (ed.):   National Rural Health Mission: An Unfinished Agenda, New Delhi: Book Well, pp.25-36.

[5] Refer: Angus Deaton. 1913. The Great Escape: Health, Wealth, and the Origin of Inequality, Princeton University Press

[6] Refer post at: http://kotharionindia.blogspot.in/2015/01/growth-with-structural-transformation.html.