Don't ignore: India's low score on Human Capital Index not an outlier

The World Bank last week launched a first-of-its-kind index called the Human Capital Index (HCI). In essence, the HCI is based on five parameters — child survival, school enrolment, quality of learning in schools, healthy and safe environment for growth, and adult survival — for each of the 157 countries it mapped. These parameters were chosen because studies show that they are closely linked with a population’s productivity. For each country, the HCI value ranges between 0 and 1 and shows how far below its potential a country performs. India was ranked a lowly 115 with an HCI score of 0.44. In other words, the productivity of India’s population is just 44 per cent of what it could be. From a policy perspective, it means that business-as-usual will cost India 56 per cent of its income in the long run.

What was particularly surprising, however, was that the HCI ranked India behind regions such as West Bank and Gaza, which have been suffering conflict for decades. So a child in Gaza is more likely to achieve her potential than a child in India. India also lags other comparable countries and neighbours such as Indonesia, Nepal and Malaysia. The HCI report stated that India’s score “is lower than the average for its region and income group”. Singapore topped the list with an HCI score of 0.88, followed by the Republic of Korea and Japan, jointly at 0.84. As a result, be it health variables such as stunting and wasting or enrolment in schools and quality of academic achievements, India lags most of its peers.

Unfortunate and alarming as this is, yet, at another level, none of this is unexpected. That India’s human capital is not properly developed is a fact that has been revisited by numerous reports and surveys, both national and international. Not that there has been no improvement at all. The recently released United Nations report on population shows India has notched up gains in many areas. But in spite of these improvements, there are areas of concern. For instance, India has continued to be a laggard on the Global Hunger Index. Similarly, India’s ranking on the United Nations Development Programme’s Human Development Index (HDI), which is another well-established measure of human capital, has shown improvements over the years, but at last count, India ranked 130 out of 189 countries on the HDI. In fact, just last month, another study, titled “Measuring human capital: A systematic analysis of 195 countries and territories, 1990 to 2016”, by the Institute for Health Metrics and Evaluation and published in the medical journal The Lancet, pegged India at 158 out of the 195 countries in question, again underscoring the fact that India falls behind in investment in health and education. The list goes on.

Yet, even more disappointing than India’s low score on the HCI was the reaction of the Indian government as it sought to summarily “ignore” the findings. The government’s reservations were on multiple levels. For one, it argued that the HCI did not reflect on the efforts that have been undertaken in the recent past — ranging from Samagra Shiksha Abhiyan (for education) to Ayushman Bharat (for health). Moreover, a senior government official argued that the HCI used metrics of the industrial era to measure the status of human capital for the digital age. There was also much consternation about some methodological inaccuracies and data gaps. However, while quibbling over the more recent data or the methodology used is justified, the Indian government should not believe that the HCI results are an outlier. Instead, India needs to redouble its efforts in these areas if it wants to realise its potential.