Positive signals, but

India still has a lot of catching up to do in HDI

For all the gloominess that sometimes comes over commentators when they survey the state of the world, the updated Human Development Index, issued by the United Nations Development Programme, provides a powerful antidote. The long story reflected by changes in the Index (a composite of per capita income, life expectancy and years of schooling) over time is one that encourages optimism. Only seven out of 189 countries today have a lower index score than India did in 1990 (0.427, on an ascending index of 0 to 1). All of them happen to be in Africa. At the other end of the scale, half the people in the world have an index score of 0.7 or higher, placing them in the “high” or “very high” human development category. This slice of the total has doubled in size, from a quarter in 1990, even as there is a much bigger population today.

India is a step below the top categories. With a score of 0.640, it still ranks at “medium”. At its present pace of improvement, it will take till about 2025 to move into the “high” human development category. The good news is that India’s rate of improvement over the full 27-year period from 1990 is better than the average for the “medium” and “low” category countries (the rate of improvement will naturally drop for the more developed countries, since their high index scores leave less scope for continued improvement).

Bangladesh is a notable out-performer. It ranks lower than India, as it has always done, but it has been moving up the scale faster and has left Pakistan well behind. Indeed, Pakistan is the problem country in South Asia. It barely makes it to the “medium” category, and is ranked a step below Nepal though that country has only half its per capita income. Pakistan is also stuck with a high population growth rate, which is about three times India’s, while its fertility rate is about 50 per cent higher. Unlike Bangladesh, which has overtaken India on the rate of capital formation (as a share of gross domestic product), Pakistan’s is half India’s level. With lower capital formation will come slower growth. And with population continuing to grow rapidly, per capita income in Pakistan is likely to become lower than that of Bangladesh for the first time. That would have been unthinkable in 1971, and for some decades after.

India may be doing better than both the bits that broke away to form new states, Bangladesh and Pakistan, but the country still ranks two-thirds of the way down the list, as it does on per capita income. China is just above the mid-point of the list, with an Index score of 0.752. India is unlikely to reach that median position till about 2030, especially since its progression has levelled off in the last two or three years. Massive investments are needed in health and education. Especially in health care, the government cannot leave it to private hospitals, many of which have acquired a reputation for feeling the patient’s purse instead of his pulse.