India’s HDI ranking shows success in poverty reduction but failure on equality
India’s ranking in UN’s Human Development Index (HDI) went up by just one from last year, to 130th. But the country has made appreciable strides on its HDI value since 1990. India’s HDI value was only 0.43 in 1990. In 2017, this grew to 0.64 – an increase of around 50%. Consider that India’s life expectancy in 1990 was 57.9 years. In 2017, it went up to 68.8 years. Over the same period, India’s per capita income in PPP terms saw an increase of a whopping 267% from $1,733 to $6,353. Similarly, expected years of schooling went up from 7.6 years to 12.3 years.
All of which isn’t surprising given that it was in 1991 that India initiated economic liberalisation. The HDI improvement over this period essentially captures the benefits that accrued to Indian society from that historic decision. That India’s HDI value is higher than the South Asian average of 0.638 exemplifies this point. Yet, the very fact that India went up just one spot from its 2016 HDI ranking shows that improvement has been part of a larger global trend where other countries too have made considerable achievements in bettering their citizens’ lives.
Plus, development hasn’t been spread evenly, with India’s income inequality the highest at 18.8% – compared to 15.7% for Bangladesh and 11.6% for Pakistan. In fact, when corrected for inequality India’s HDI value falls by 26.8% to 0.468. This means that most of the improvements have flowed to the top of the social pyramid while those at the base have only just been lifted out of poverty. This also means that the middle class hasn’t grown as much as it should have, while small and medium enterprises have failed to transfer the agrarian workforce to manufacturing. Add to this gender inequality which glaringly shows up in the per capita income parameter, and we are looking at a really mixed picture.
This indicates India’s economic liberalisation is an unfinished story, and that our socialist political DNA has held us back rather than create a more equal society. Thus, it’s high time that the existing development paradigm is challenged and economic reforms undertaken on a war footing. In fact, it’s by really opening up the economy and further improving ease of doing business that all sections of society can grow. Socialist interventions like reservations and archaic labour laws only hold India back from realising its true potential.