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India's record on developing its human capital

December 01, 2007 14:19 IST
The United Nations Development Programme has just put out its latest Human Development Report, containing the human development index (HDI) for 177 countries, with the data being for 2005. India ranks 128th (with an index of 0.619), which is a notch down from the 127th rank that it used to occupy.

This reflects the relative lack of progress on key issues of health and education (life expectancy, literacy, school enrolment), despite rapid economic growth, and must be taken as a negative vote on the country's political system, its economic and social policies and the effectiveness of government programmes.

That said, it is instructive to see the numbers and the rankings in context. The UNDP categorises 70 countries with an index higher than 0.8 as having high human development, and another 85 countries that score between 0.5 and 0.79 as having medium human development.

India crossed the 0.5 threshold in the late 1980s, thus moving out of the low and into the medium development category. China's HDI level at the time was where India's is today, showing a gap of nearly two decades between the two countries.

China's index now stands at 0.777, at rank 81, and it is probably three years away from moving into the high development category. Among the other BRICs countries, both Russia (0.802) and Brazil (0.8) have scraped into the high development grouping. In South Asia, Sri Lanka is ahead of India at 0.743, while Pakistan at 0.551 and Bangladesh at 0.547 are lower down the ladder.

Among the 49 countries with an index that is lower than India's, only one (Swaziland) has a higher per capita income as measured by purchasing power parity. This would suggest that the primary determinant of human development is income.

Which is not to say there are no variations. Of the 127 countries that have a better HDI level than India, no fewer than 11 have a lower per capita income. Of these 11, seven are in a special category of former socialist states that traditionally put greater stress on health care and education (they also have better equality levels), like Georgia, Uzbekistan and Vietnam. The remaining four include tiny countries like Vanuatu and Sao Tome & Principe, which are not really comparable. In a broad sense, therefore, human development is usually defined by income level.

Two more questions are worth answering. Has India's record on developing its human capital slowed down or deteriorated? The answer in the numbers is that it has not. In the latest five years (2000-2005), India's index improved from 0.577 to 0.619, or an improvement of 0.042 points over the five years, which happens to be the fastest rise till date, reversing a slowdown seen in the 1990s.

In the two quinquenniums of the 1990s, the index improved by 0.033 and 0.031 points, while in the 1980s the improvements were by 0.038 and 0.037 points. Over the full quarter-century (1980-2005), India's index has improved therefore by 0.181 points.

The second question is whether the rate of improvement in the HDI can be linked to the rate of economic growth, and the answer is: perhaps yes. China has been growing faster than India, and its HDI has improved in 1980-2005 by 0.219 points which is better than India's 0.181. Brazil has been slower on both counts, as has Russia - in fact, Russia moved down on its index in the post-Soviet days and has only recently started recovering.

So, while recognising that India's fundamental constraint is its level of per capita income, it does seem to be the case that on economic growth and on the rate of improvement in HDI, India has among the best country records - although it is obvious that it can and should do much better on both counts, as China has demonstrated.

Avant guard!

T N Ninan
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