Signals from HDI ranking: Public delivery of social infra is key weakness

India’s progress three notches up the latest Human Development Index (HDI) offers only modest cause for satisfaction. That is because the country remains in the bottom half of the table of 193 countries, moving from rank 133 in 2022 to 130 in 2023. As the report notes, India remains in the medium human-development category. There are upsides to this story. With its HDI value improving from 0.676 in 2022 to 0.685 in 2023, the report points out that India is on the threshold for high human development, for which the HDI value is at or greater than 0.700. The report also notes that India’s HDI value has increased by over 53 per cent since 1990, growing faster than both the global and South Asian averages. This latter observation offers pointers to how India can make a leap up the HDI value chain by delivering better socioeconomic outcomes for the majority of its population.

 

The key area in which India has recorded progress is life expectancy, which jumped from 58.6 years in 1990 to 72 years in 2023. This improvement has been attributed to such programmes as the National Health Mission, Ayushman Bharat, and Poshan Abhiyaan. Mean years of schooling has also improved, with children likely to stay in school for 13 years, as against 8.2 years in 1990, thanks to national education programmes. The reduction in multidimensional poverty has been one of the most noticeable achievements of the post-reform years, with some 135 million Indians escaping from this trap between 2015-16 and 2019-21. Yet India remains an HDI laggard in the neighbourhood. China, the world’s second-largest economy, ranks 75th, and even smaller economies such as Sri Lanka (78) and Bhutan (127) rank above India, while Bangladesh, at 130, is on a par. Only Nepal (145), Myanmar (149), and Pakistan (168), all facing deep political turmoil, weigh in below India.  According to the report, growing inequality and gender disparities are dragging India down the HDI scale. In fact, inequality has reduced India’s HDI by 30.7 per cent, among the highest losses in the region.

 

The signals from the HDI report, then, are clear and unambiguous. India urgently needs to step up expenditure on the delivery of public social infrastructure so that more citizens down the income ladder have the necessary access to quality education and health care to bootstrap them into the ranks of the prosperous. Programmes such as the National Health Insurance Scheme and Beti Bachao Beti Padhao, focused on educating the girl child, have undoubtedly helped. But India’s expenditure on health and education remains grossly inadequate to serve as game changers in the HDI and economic growth in the way it has done in Southeast Asia and the Tiger economies. Health expenditure has hovered between 4 per cent and 3.7 per cent of gross domestic product (GDP) — among the lowest in the world. The increasing abdication of the government from health care leaves the Indian population vulnerable to a mostly unregulated private sector. Likewise, public spending on education has been 3-4 per cent of GDP, inadequate by any measure and well behind China’s 6.13 per cent. These are well-known deficiencies, and the central and state governments have to find suitable policy responses or the fiscal space to bridge this yawning socioeconomic gap.