Human Development & India

8/10/2019 Human Development & India

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HUMAN DEVELHUMAN DEVELHUMAN DEVELHUMAN DEVELHUMAN DEVEL OPMENTOPMENTOPMENTOPMENTOPMENT

IN INDIA IN INDIA IN INDIA IN INDIA IN INDIA


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Chronicle IAS Academy [2]

HUMAN DEVELOPMENTHUMAN DEVELOPMENTHUMAN DEVELOPMENTHUMAN DEVELOPMENTHUMAN DEVELOPMENT

IN INDIA IN INDIA IN INDIA IN INDIA IN INDIA

CHRONICLEIAS ACADEMYA CIVIL SERVICES CHRONICLE INITIATIVE

During the past few decades, Indianeconomy has witnessed high rate of itsaggregate GDP growth as compared to the pastand also compared with several other countriesof developing world. India has also, been ableto bring down its poverty level. However, therehave also been some clear-cut failures.Agriculture continues to account for 50 percent of the workforce even though its share of GDP is now less than 20 per cent. In spite of the present agrarian crisis, the country has not been able to generate productive employmentoutside this sector. As a result a large numberof people remain unemployed, which is one of the main causes of persistence of widespreadpoverty in the country. In the absence of basicfood security for a significant portion of population, the inability of the system to ensure basic needs of housing, sanitation, adequatehealth care, universal education, good qualityof school education, absence of employmentguarantee and gender disparities, etc. have putthe country at a very low rank in the area of human development. In addition to these, thereare problems caused by the other patterns of economic growth. There are regionalimbalances and inequality in control over assets.A large section of the country stands excludedfrom the benefits of development. There isexclusion from education, income generatingopportunities and from the impact of physicaland social infrastructural expansion. The stateof human development in the country cannot be understood without taking into account theground realities pertaining to the weakersections of the society.

India at present is also going through ademographic revolution, with the proportionof working-age population between 15 and 59years likely to increase from approximately 58per cent in 2001 to more than 64 per cent by2021, adding approximately 63.5 million newentrants to the working age group between

2011 and 2016, the bulk of whom will be inthe relatively younger age group of 20-35 years.The demographic dividend can be reaped onlyif this young population is healthy, educated,

and skilled thus, human resource developmentplays a significant role in the socio-economicdevelopment of the society

ECONOMIC GROWTH AND HUMANDEVELOPMENT: TWO-WAY LINK

Economic Growth and its impact onHuman Development.

In order to evaluate the state of human

development in the country, UNDP asses it inthe three basic parameters of humandevelopment: economic attainment or well- be ing, educat ion and heal th . Economicattainments of individuals and their well-beinghave conventionally being captured throughindicators like per-capita or per-capita GDP of an economy. Per capita income is the averageNet State Domestic Product (NSDP). It isconsidered an important means by whichindividuals can improve their economic

attainments and well-being. Per capitaconsumption expenditure is considered a morepreferable indicator of individual's commandover resources and as a direct and bettermeasure of economic well-being. This helps incalculating the gap between rural and urbanconsumption expenditure and thus measure theextent of inequality.

Thus Economic growth is an importantfactor in reducing poverty and generating theresources necessary for human developmentand environmental protection. There is a strongcorrelation between gross domestic product(GDP) per capita and indicators of developmentsuch as life expectancy, infant mortality, adultliteracy, political and civil rights, and someindicators of environmental quality.

For example, while the citizens of the Indianstate of Kerala have life expectancies andliteracy rates comparable to those of manydeveloped countries, the fact that they cannot

enjoy many of the benefits of citizens of suchcountries (such as better housing, transportation,or entertainment) demonstrates the importanceof GDP as an instrument for achieving a wide


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range of capabilities. However, GDP also has astrong effect on literacy and health outcomes, bo th th rough pr ivat e expenditures andgovernment programs. Thus, higher incomesand growth facilitate the achievement of othercrucial human development objectives.

Importance of economic growth:Nobel laureate Amartya Sen has describedeconomic growth as a crucial means forexpanding the substantive freedoms thatpeople value. These freedoms are stronglyassociated with improvements in generalliving standards, such as greater opportu-nities for people to become healthier, eat better and live longer.

Growth can generate virtuous circles of prosperity and opportunity.

Economic growth generates job opportu-nities and hence stronger demand forlabour. Employment growth in the orga-nized sector, public and private combined,has increased by 1.0 per cent in 2011, asagainst 1.9 per cent in 2010. employmentgrowth is clearly related to economicgrowth as:

The unemployment rate (per 1000) amongthe major states is the lowest in Gujarat(18)and highest in Kerala (73) and Bihar (73) inurban areas and the lowest in Rajasthan (4)and again highest in Kerala (75) in rural areas.This data clearly shows that due to higheconomic growth in Gujarat and governmentspending in MGNREGA in rural areas of Rajasthan leads to low unemployment rate.Kerala, which has performed well in terms of social indicators as literacy, health but lackseconomic growth, performs less well in termsof unemployment (both rural and urban). This

may also be due to the higher level of educationin Kerala resulting in people not opting formanual jobs as observed by some studies.

Further, real wages for low-skilled jobs haveincreased with GDP growth worldwide, whichindicates that the poorest workers have benefited from the increase in global trade andgrowth. Macroeconomic factors, such as lowinflation, export orientation and low labourtaxes, help to determine how much employmentis created by growth. Structural factors, suchas the balance of the economy betweenagriculture, manufacturing and services, arealso important.

The relationship between growth andemployment is not simply about the quantityof jobs created by growth; it is also about thetypes of jobs created. India has relatively largeinformal sectors. The combination of excessivelyregulated labour markets and low levels of

development is the principal driver of theinformal sector. Careful deregulation of labourmarkets will reduce the cost of employmentfor firms in the formal sector and increase theshare of formal employment.

Higher levels of income reduce infantmortality. India demonstrates the strengthof this relationship: a 10 per cent increasein GDP is associated with a reduction ininfant mortality of between five and sevenper cent. Infant mortality rate (IMR) whichwas 58 per thousand in the year 2005 hasfallen to 44 in the year 2011. this is be-cause of because economic growth hasprovided the means to invest in healthcare,sanitation, drugs, etc. Life expectancy isalso clearly positively related to the levelof per capita income.

Primary and secondary school enrollmentrates are positively associated with higherlevels of per capita income. Strong growth

and employment opportunities improveincentives for families to invest in educa-tion by sending their children to school.There is rise in growth in enrolment of students in higher education from 49.25lakh in 1990-91 to 169.75 lakh in 2010-11.Similarly gross enrolment ratio in class I-VIII has risen from 93.54 in 2004-5 to 104.3in 2010-11. Secondly, economic growthhas allowed GOI to move for inclusivegrowth. Thus huge spending on Right to

Education and programmes like the SarvaShiksha Abhiyan have contributed to thegrowth in enrollment. Thus it can be con-cluded that: Growth increases a country'stax base and therefore makes it possiblefor the government to spend more on thekey public services of health and educa-tion; and Growth raises the incomes of poor people and thereby increases theirability to pay for activities and goods thatimprove their health and education.

In general, a growing economy tends toprovide greater job opportunities. These leadin turn to increased demand for education as


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people expect higher returns for them and theirchildren from the investment of time and moneyin acquiring skills.

The link works equally in the oppositedirection. Increased government spending onhealth and education tends to boost growth in

the future, and households reap the benefitsfrom increased investments in health andeducation through higher future incomes. Thisgenerates a virtuous circle of development.

Present Human development report cardof India:

a) 1/3rd of the world's hungry live inIndia

b) 836 million Indians survive on less thanRs. 20 (less than half-a-dollar) a day

c) 30% of newborn are of low birth weight,56% of married women are anaemicand 79% of children age 6-35 monthsare anaemic.

d) India has 29% of the 872.9 millionundernourished people (FAO).

e) India has 49% of the world'sunderweight children (WHO).

f) India has 34% of the world's stuntedchildren (WHO).

g) India has over 46% undernourishedchildren (WHO).

h) 456 million people (about 42%) of thepopulation in India is below the newinternational poverty line (i.e., earningless than $1.25 per day).

i) The literacy rate of India according to2011 Census is 74.04 per cent with 82.14per cent males and 65.46 per centfemales.

j) Child sex ratio has declined from 927to 914.

k) Overall sex ratio at the national levelhas increased from 933 to 940.

From the above data, it is however clearthat economic growth alone does not guaranteehuman development. The impact of economicgrowth on a nation's human development levelalso depends on other conditions of the societysuch as social parameters, range of regionaldisparity.

Regional disparity signifies the differentphases of development occurring in different

parts of the country. After independence dueto shortage of resources governmentimplemented trickledown theory fordevelopment in the country. This theoryproposed that development at one place willautomatically leads to development of nearby

regions i.e. if an industry has been establishedin an area it will lead to overall developmentof the region around it. But this policy of government failed to provide fruits of development to the nearby villages and regions.

This unequal development of region widensthe gap between haves and haves not thusleaded to regional disparity. An in Orissa thearea near the coastal plains are more developedthan the interiors. Similarly in Uttar Pradeshwest U.P. is more advanced economically than

the Bundelkhand region irrespective of vastmineral resources. Thus regional disparity can be natural (in terms of resources available) orcan be manmade (unequal economic growth).

Government has proposed many incentivesand schemes for the development of backwardregion but poor implementation mechanism hasfurther broadened the regional disparity.

LPG era has further worsened the situation because more developed regions has been able

to attract multinationals and FDI andunderdeveloped regions are left behind,widening the gap and acting as obstacle in thefield of inclusive growth.

Hence Economic growth is the mostpowerful instrument for reducing poverty andimproving the quality of life in developingcountries but depends on well-functioning civilinstitutions, secure individual and propertyrights, and broad-based health and educationalservices.

Human Development and its Impact onEconomic Growth

Investments in education, training, healthand other social services lead to humandevelopment. Higher levels of HumanDevelopment have an influence on economythrough increasing people's capability andconsequently their creativity and productivity.Prior to the nineteenth century, systematicinvestment in human capital was not

considered especially important in any country.Expenditures on schooling, on-the-job training,and other similar forms of investment werequite small. This began to change radically


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during this century with the application of science to the development of new goods andmore efficient methods of production

During the twentieth century, education,skills, and the acquisition of knowledge have become crucial determinants of a person's and

a nation's productivity. One can even call thetwentieth century the "Age of Human Capital"in the sense that the primary determinant of acountry's standard of living is how well itsucceeds in developing and utilizing the skillsand knowledge, and furthering the health andeducating the majority of its population.

Each of the various components of humandevelopment is likely to have a distinct impacton economic growth. Let's discuss eachparameter in brief:

a) Education:

A combination of basic facilities andeducation leads to economic growth which inturn alleviates poverty and helps thedisadvantaged regions to grow locally.Education enriches people's understanding of themselves and world. It improves the qualityof their lives and leads to broad social benefitsto individuals and society. Education raisespeople's productivity and creativity andpromotes entrepreneurship and technologicaladvances. In addition it plays a very crucialrole in securing economic and social progressand improving income distribution.

According to Krueger and Lindahl (2001):"Each additional year of schooling appears toraise earnings by about 10% in the US,although the rate of return to education variesover time as well as across countries".

Educating girls and women is probably the

single most effective investment in a developingcountry. It creates a multitude of positiveremunerations for families including betterfamily health and nutrition, improved birthspacing, lower infant and child mortality, andenhanced educational attainment of children.

Therefore, education, with a special focuson employability, is critical to India sustainingits economic growth, especially inclusiveeconomic growth.

India's education industry is expected togrow from $100 billion in 2012 to $300 billionin 2022 (Riel Miller and Carl Schoonover). Thisspending will be jointly led by Indian

government (which currently spends only 4%of GDP on education compared to 5% byMexico, South Africa, Thailand, the UK; 6% by the US; and 7.5% by Israel) and the privatesector. If this mammoth $100 billion industrydoes not embed employability inside schools,

colleges and universities urgently, India maypotentially have a demographic disaster onhand. If we are successful, by 2050 India willgrow per capita income from $1,000 to$20,000, GDP from $1 trillion to $40 trillionand become world's second-richest economy,ahead of the US and behind China.

Education alone, of course cannot transforman economy. The quantity and quality of investment, domestic and foreign, together withthe overall policy environment, form the other

important determinants of economicperformance. Yet the level of humandevelopment has a bearing on these factors too.The quality of policy making and of investmentdecisions is bound to be influenced by theeducation of both policy makers and managers;moreover, the volume of both domestic andforeign investment is likely to be larger whena system's human capital supply is moreplentiful.

Thus Education is indispensable toeconomic development. No economicdevelopment is possible without goodeducation. A balanced education systempromotes not only economic development, butproductivity, and generates individual incomeper capita. Its influence is noticeable at themicro level of an individual family.

b) Health:

It is well know that certain diseases andconditions such as HIV/AIDS, malaria,

tuberculosis (TB), childhood infectious diseases,maternal and prenatal conditions,micronutrient deficiencies and tobacco-relatedillnesses represent the main causes of (avoidable)deaths in low-income countries. It is reportedthat widespread diseases also stunts theexploitation of arable land, migration andtrade. Bad health stymies job productivity andan individual's ability to learn and to growintellectually, physically and emotionally.Through all these channels, ill health pushes

the poor deeper into poverty. If disease wascontrolled so that individuals could reap longerand healthier lives, the pressure to have manychildren would abate and families could invest


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more in the health of each child. Theseimprovements in health would in turn translateinto higher incomes, higher economic growthand reduced (and more sustainable) populationgrowth. The health improvements cancontribute to economic development.

The reasons include: Improved productivity: Better health can

make workers more productive, either throughfewer days off or through increased outputwhile working. Improved health of familymembers will have a similar impact throughreducing time lost to caring for dependents.

Improved learning: Improved nutritionand reduced disease, particularly in earlychildhood, leads to improved cognitive

development, enhancing the ability to learn.Healthy children will also gain more fromschool, having fewer days absent due to illhealth. Enhanced learning through either of these mechanisms will add to human capital -an important determinant of economic growth.

Reduced Family Size: Investments insexual and reproductive health can lead toreduced poverty by reducing the size of families. At a societal level, similar investmentsmay lead to demographic changes conduciveto economic development. In particular, theymay lead to a period in which countries havea high ratio of workers to dependents leadingto increased national savings. Economic theorysuggests that increased savings ought toenhance growth by providing funding forinvestment. On the other hand, in the mediumterm, population growth due to reduced infantmortality could reduce GDP per capita if population growth outpaces growth of available resources and capital.

Health and Investment: Healthierindividuals will often have the ability andincentive to save more, and, as noted above,this accumulation of capital may help fuelgrowth through investment. Similarly,companies may be more likely to invest whenworkforces are healthier or better educated.Improved disease environments may alsosupport the development of sectors such astourism.

Increased availability of land forproductive use: Eliminating particular illnessesmay allow cultivation or other use to be madeof previously unused land.

Reduced Treatment Burden: Initiativesthat prevent certain illnesses or provide for theirearly treatment can help avoid the majordownstream costs associated with illness andsubsequent complications. Because of this, suchinitiatives can reduce health care burdens on

families and governments, freeing capital forinvestment in productive activities (freeingfunding for governments to invest ininfrastructure, for example, or for families toinvest in education).

Example: When a family is healthy, boththe mother and the father can hold a job, earnmoney which allows them to feed, protect andsend their children to school. Healthy and well-nourished children will perform better in schooland a better performance in school will

positively impact their future income. If parentsensure that their children have a highprobability of reaching adulthood, in generalthey will have fewer children and they will beable to invest more in health and education foreach of them. Additionally, the loss of healthaffects the poor to a greater extent since themain, and at times, only asset they have istheir body. When they become ill they havefewer alternative solutions and suffer greaterconsequences.

Status of education and health in India

Education: All States/ UTs have notified the RTE

Rules. 2,14,561 Primary and 1,76,361 Upper

Primary schools have been sanctionedunder SSA till date, of which 96% areoperational.

Mid day Meal Scheme (MDMS) coverschildren studying in classes I-VIII in Gov-ernment, Local Body, Government aidedand National Child Labour Project schoolsand the centres run under EducationGuarantee Scheme (EGS) /Alternative &Innovative Education (AIE) centres includ-ing Madarsas/Maktabs supported underSarva Shiksha Abhiyan (SSA). During theyear 2011-12, 10.54 crore children study-ing in 12.31 lakh institutions have availedof the Mid Day Meal.

Govt. has launched the centrally spon-

sored scheme to set up 6,000 modelschools at the rate of one school per blockwas launched in November 2008. Imple-mentation of the PPP component of the

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