Human development bottom up

A revolution in strategy is needed for the New India

I have recently written about India’s worsening income distribution since the 1980s and its highest concentration of income among a cross-section of countries for the top 0.001 per cent of the income distribution. I have also written about India’s globally fourth worst rank in exposure to climate risk and the disproportionate number of annual deaths that occur related to it. Earlier I had further written on farmer suicides and how inured we had become.

Now, a United Nations Human Development Report (UNHDR) has reemphasised that 193 nations including India endorsed, and committed to achieve by 2030, 17 Sustainable Development Goals. They also recognised that various groups still suffered from basic deprivation and substantial barriers, and that human development for everyone was achievable through available policy options. Thus India has 13 years left if it had been serious in signing on its commitment. Hopefully it was not merely attending another glitzy global event.

The UNHDR tasks to be completed centre not only on reducing inequality and ensuring gender equality, but also leaving no one behind, eradicating extreme poverty, ending hunger, and making all of them sustainable. Clearly the goals go well beyond reducing inequality reflecting the use of emphatic words to raise citizens up from the very bottom viz. “extreme poverty”, “hunger”, and so on. 

India’s mammoth task can be viewed from where it currently stands in human development indicators in a panoply of nations. Indeed, a listing of comparisons is an eye-opener. First, as in all international comparisons, India’s overall rank is low as are its component values. As Table 1 reveals, India’s Human Development Index (HDI) is ranked at 131 out of 188 countries. Some other BRICS nations – Brazil and China – are at 79 and 90, respectively. HDI reflects a formulaic combination of income, education and life expectancy explained in the Technical Notes of the Report. The HDI value is maximum at unity, the top score being Norway’s at 0.95. Brazil, China and India’s are 0.75, 0.74 and 0.62, respectively. 

Illustration by Binay Sinha

Second, Table 2 shows that, during 2010-15, India’s improvement in HDI rank (4) lagged behind Brazil (7) and China (11). Brazil’s poor income distribution was well-known. And now India has surpassed even Brazil. This is revealed in Table 2 through a Coefficient of Human Inequality(CHI) — derived using a  familiar Atkinson’s Inequality Index — which is 5.4 for Norway, 7.8 for UK, 12.9 for US, 25 for Brazil, and 26.5 for India (China’s is not available). Third, once CHI is incorporated into HDI to obtain an Inequality-Adjusted HDI (IHDI), India’s percentage loss in HDI (27.2) is the greatest, and even higher than Brazil’s loss (25.6). Fourth, while India’s HDI value is one-third Norway’s, India’s more meaningful IHDI value reduces to half of Norway’s. However one may critique Piketty’s recent conclusions on India’s worsening income distribution, they are corroborative of these UN findings.

The UNHDR reveals also the extent and intensity of poverty. It uses a “multidimensional” concept incorporating education, health and income components. Multidimensional poverty headcount is defined as 33 per cent of the population in deprivation of the components, and severe multidimensional poverty as 50 per cent or more. While Brazil, China and South Africa results are based on 2012-14 information, India’s is almost a decade older, hence is not fully comparable. But a decade could not have bridged the type of gap the UN reports, for the percent of population in multidimensional poverty in Brazil, China, South Africa and India are 2.4, 5.2, 10.3 and 55.3 per cent, respectively; the percentages for severe multidimensional poverty are 0.3, 1.0, 1.3 and 27.8, respectively. India may spat internally over its much lower poverty statistics but these UN numbers lay bare what India’s reality actually is if, that is, humility allows to view it as such before thinking of, or strategising, how to eradicate it.

One thing is clear. We cannot shut our eyes any longer. Rather, we must impel ourselves to ponder policies alternative to trickle down and, instead, embrace bottom up in a big way. To elaborate, how can we recognise and prioritise the bottom 60 per cent as Indians too, and design clear tax-expenditure policies to lift them from poverty. Radical innovation — including streamlined population policy, rapid expansion in taxpayer registration rather than spending public resources on pursuing existing registrants, steeply progressive income taxation for newly created top brackets, reintroduction of wealth tax on real and financial wealth for above Rs 60 crore, massive redistribution of income, wealth and land if required through Constitutional amendments, and stipulated private sector commitment to corporate social responsibility (CSR) that needs to be enhanced multiple times — should be wrought by the new policy makers, for there are just 13 years left to achieve India’s international commitment to sustainable development and eradication of poverty.