Un­fin­ished Story

In­dia’s HDI rank­ing shows suc­cess in poverty re­duc­tion but fail­ure on equal­ity

The Times of India (New Delhi edition) - - AN EPIPHANY OF IDEAS -

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.

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