Long way ahead

The HDI report has some important lessons for India

The latest Human Development Index (HDI) report, by the United Nations Development Programme, has once again brought home some sobering news. India continues to be ranked 131 out of 188 nations on HDI. This is the same rank that India had in 2015. And while India is placed better than many of its neighbours such as Pakistan (147), Nepal (144) and Bangladesh (139), it is cold comfort since it not only falls far behind its BRICS partners — China (90), Brazil (79), Russia (49) and South Africa (119) — but also Sri Lanka (73) and Maldives (105).

This comparison gets worse when some of the key components of human development are examined. For instance, if one looks at the Multidimensional Poverty Index, India has close to 28 per cent of its population suffering from severe multidimensional poverty. This stands in stark contrast to single-digit (or less) figures for Brazil, China and South Africa. Moreover, for the population suffering from poverty, India has the highest “intensity of deprivation” among the BRICS partners.

The same story is repeated when one looks at the Gender Inequality Index, where India ranks 125th, far behind China (37) and Russia (52) and others. In this regard, India’s “seat share of women in Parliament” data are misleading since countries with a similar percentage of women occupying a seat in Parliament, such as Brazil or Russia, have more than double the participation rate of women in the labour force.

These are pointers to where India needs to focus on, not just from the perspective of direct government intervention but also in terms of policy that encourages corrective action. For instance, the recent effort to grant longer maternity benefits, while well intentioned, may further depress the participation of women in the labour force.

In fact, inequality in society is a crucial element that this year’s report underlines. “Unequal concentrations of well-being mean that indicators of average human development like the HDI do not reflect the well-being of a vast portion of the population.” As such, the report details an “inequality-adjusted” HDI (IHDI) as well. The IHDI tries to quantify the effects of inequality on human development. At the global scale, close to 22 per cent of the world's human development is lost because of inequality. In general, inequality in education is the biggest contributor, followed by inequality in income and inequality in life expectancy. In India’s case, when inequality is taken into account, its already poor HDI score of 0.624 fall 27 per cent to 0.454. This is hardly surprising. India has huge social, gender and geographical differences.

However, it is not all gloom and doom in the India report card. That’s because, despite its continuing low rank, India has been improving steadily. In fact, if one looks at average annual growth in HDI since 1990, India has notched up a rate that's second only to China. In particular, if one looks at the 2010-15 period, when the global economy had taken a beating, India's rate of improvement had been much better than its BRICS partners. It is perhaps this reason why despite dropping almost 30 per cent of its score in IHDI, India actually gains four ranks.

There is another silver lining in the data. Among the supplementary indicators, the report shares data on the “perception of well-being”. It corresponds to the 2015 financial year and shows that on the whole, despite evident hardships, Indians were not too bogged down by their reality. About 63 per cent were satisfied with their standard of living, 80 per cent said “yes” to having the ideal job, 76 per cent were satisfied by the education policy, 74 per cent had confidence in the judicial system and 69 per cent had trust in the national government. Evidently, Indians are down but not out. The question is: Can the government capitalise on this positive sentiment to bridge the gap between perception and reality?