EurekaWow | Indian Economic Development
India in Comparative Perspective -Amartya Sen and Jean Dreze (An Uncertain Glory) Majority of the Indian people have been left behind in the enhancement enhancement of living standards. Comparing India with ROW, we need to be careful about the section of the t he population which is being compared. Comparisons are often made to for the purpose of checking where India fits in the international league. More than often, the system of Rank is used (Highest = Best). However this system has its own drawbacks for it greatly depends on t he variable chosen for ranking as is evident in the fact that India ranks high in GDP growth figures in spite of its mediocre performance performance as far as the quality of life is concerned. concerned. Further analysis has been done by comparing Indian averages with that of other countries. Sources of most of the figures are the World Development Indicators.
Comparisons with the Non-African Poor Most of the countries with a low Human Development Index (HDI) are in South Asia or sub-Saharan Africa. They share the incidence of poverty, however living conditions, now are much better in subSaharan Africa. Per capita income is higher by 50 per cent higher in India, however for social indicators like female literacy, and child nutrition, India is either at par or worse than sub-Saharan Africa. Africa. Both regions continue to share a severe problem of mass illiteracy, i lliteracy, especially among women. Indicators GDP per capita Life Expectancy Expectancy at birth Infant & Child Mortality Rate Total Fertility Rate Proportion of Underweight Underweight children Literacy Rate, age 15-24 yrs Females Males
India’s Rank among 16 poorest countries 1 9 10 7 15
11 9
Inferences: Inferences: 1. According to the World Bank, only 15 countries outside sub-Saharan Africa had a GNP per capita lower than India’s in 2011: Afghanistan, Nepal, Afghanistan, Nepal, Bhutan, Pakistan, Bangladesh, Burma, Uzbekistan, Vietnam, Yemen, Papua New Guinea, Tajikistan, Kyrgyzstan, Laos, Moldova, Cambodia and Haiti. 2. In the table given above, we compare India in non-income parameters. India has, by choice the highest GDP per capita, ranking 1 in it. Its rank is 10th or worse in the other parameters, parameters, clearly reflecting the living standards prevalent in India. 3. Looking country wise, we see that Vietnam performs better than India in terms of all the indicators in spite of being much poorer. Uzbekistan has almost 100 % literacy rates. 4. A striking contrast between India and Nepal can be seen with Nepal almost at par with India with just 1/3rd of the t he income levels.
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4 Semester | B.A. Economics (H)
EurekaWow | Indian Economic Development
India’s Decline in South Asia Indicators
GDP per capita Life Expectancy at birth Infant & Child Mortality Rate Total Fertility Rate Proportion of Underweight children Literacy Rate, age 15-24 yrs (Females)
India’s Rank among 6 South Asian countries 1990 2011 4 3 4 5 2 5 2 4
4-5
6
2-3
4
Inferences: 1. The 6 countries taken are- Pakistan, Sri Lanka, Bangladesh, Nepal, Bhutan and India. 2. Bangladesh- India’s per capital income was already more than 60% that of Bangladesh, however Bangladesh has overtaken India in terms of social indicators like life expectancy (4 years higher in Bangladesh in 2010), child survival and enhanced immunization. 3. Nepal- In spite of 1/3rd of India’s income and poor governance, Nepal is almost at par with India in terms of various social indicators. 4. Pakistan- Between 1990 and 2011, real per capita income has increased by 50 and 170 per cent in Pakistan and India respectively, however the gap in social indicators hasn’t changed much. 5. Sri Lanka- Huge lead over India in terms of social indicators especially in terms of literacy levels. Something to note, Sri Lanka achieved this with private schools being virtually absent in Sri Lanka. Few people live more than 1.4 km away from the nearest health centre. 6. Comparing in terms of rank, overall, only one country in South Asia (Sri Lanka) clearly had better social indicators than India in 1990, but now India looks second worst, ahead only of Pakistan. Case Study – Bangladesh’s Progress and Role of Women Bangladesh is one of the poorest countries of the world. Yet Bangladesh has made rapid progress in crucial aspects of standard of living. However , Bangladesh cannot be considered as a ‘model for development’ as in spite of the recent development, it still remains one of the most-deprivation ridden countries in the world. With 1/10th of the GDP of India and a mere 10 per cent expenditure on public services (with lack of accountability), Bangladesh has quite restrained public services. Democratic institutions do not function perfectly, maintaining the tradition of the opposition not attending the Parliament. Yet there are features of astonishing achievements, one can see there. There can be seen a pattern of sustained positive change in gender relations. Gender related indicators are better in Bangladesh than in India. Greater literacy among women has led to more participation in the work force, playing an important role in demographic transition (low mortality and fertility rates). Bangladesh is one of the few countries where the number of girls exceeds the number of boys i n school. Women’s share of seats in national parliament is 20 in Bangladesh and 11 in India. In fact, some of the country’s recent achievements build in a fairly direct and transparent way on women’s agency. Very large numbers of Bangladeshi women have been mobilized as front-line health workers.
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4 Semester | B.A. Economics (H)
EurekaWow | Indian Economic Development India continues to have a stagnant women participation in workforce and gender-bias in childcare, which includes sex-abortion – only 914 girls per 1000 males (among children) in India. Bangladesh’s focus on health and education has been helped by NGO activities, In spite of low public expenditure,
Bangladesh’s health indicators are better than India as shown in the following tableIndicators of Public Health (All Proportions) Households practising open defecation Fully immunized children (12-23 months) Population with sustainable access to i mproved water source Diarrhoea affected children treated with ‘oral rehydration therapy’ Children who started breastfeeding within 24 hours of birth
India 55 44
Bangladesh 8.4 82
88
97
39
81
55
89
Bangladesh has also followed effective and non -coercive family planning (Total fertility rate falling from 7 in early 70s to 2.2 in 2011). Surveys show the high awareness about family planning and higher use of modern contraceptive methods than in India. Another point to be noted is the importance of social norms in health, education and related fields in bringing about changes in social and community mobilization in bringing about the same. Many grass root health and community workers have been mobilized to explain contraception methods, improved sanitation, organizing nutrition supplement programmes, counselling pregnant women etc in various villages. India can indeed learn a lot from its neighbouring country.
India among the BRICS Inferences: 1. Common features in the BRICs countries (Brazil, Russia, India and China) include their gigantic populations. 2. India appears to be an exception. Other countries have achieve universal or near universal literacy in younger age groups, universal child immunization and the problem of child undernourishment has almost disappeared BRICs nations except India. 3. India’s per capita GDP is less than 1/2 of China, 1/3rd of Brazil and 1/4 th of Russia. However, the required ‘catching-up’ has to be both in terms of income and social indicators (public services, social support and economic distribution). India, out of the 4, remains the only country which hasn’t gone through the expansion of public services. 4. China- made progress towards universal access to elementary education, health care and social security before its market oriented reforms in 1979 (China’s growth oriented policies were helped by human development laid earlier). The principle of universal health coverage has reappeared in China’s health planning after a break in the 1980s and 90s. Nearly 95 per cent of the people are covered by the revamped public health system. 5. Russia-Before the breakup of the Soviet Union in 1991, the country had a well developed welfare state. However, there was a strain in social spending after the economic reforms in 1990s. The breakdown was compounded by an economic catastrophe, not unrelated to the lethal advice of Western experts who predicted an ‘economic miracle’ in a newly marketoriented Russia even as the economy kept on sinking. T his prolonged crisis, before the revival in early 2000s led to a catastrophic deterioration of the social infrastructure. In the recent years, there have been major efforts to rebuild public services.
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4 Semester | B.A. Economics (H)
EurekaWow | Indian Economic Development 6. Brazil- Progressive social policies are recent in nature, which followed after rapid economic growth. For a long time, Brazil combined rapid economic growth with repressive government, massive inequality and endemic deprivation. However, the picture has radically changed
during the last twenty years. Indicators GDP per capita (2011,at 2005 PPP) Life Expectancy (Males) Under 5 Mortality Rate Literacy Rate (Females),in % Proportion of children who’re Underweight Public Expenditure on Health as a % of GDP Public Expenditure on Education as a % of GDP
India
China
Brazil
Russia
3203
7418
10279
14821
64 61 74
72 15 99
70 16 99
63 12 100
43
4
2
N/A
1.2
2.7
4.2
3.2
3.3
N/A
5.6
4.1
Case Study: Old and New Brazil In the 1960s and 1970s, Brazil had one of the fastest growing economies, but living conditions remained deplorably low for large sections of the economy. Over the last few decades, Brazil has substantially changed course and adopted a more inclusive approach based on active social policies. It has thus come out of ‘unaimed opulence’ (Indiscriminate pursuit of economic expansion, without paying attention to how it is shared or how it affects people’s lives).Social Spending in Brazil (25% of GDP) is now about four times that of India (6%). This change has been driven by democracy. Notable aspects of this new orientation include: Health:
Right to health included in new democratic constitution as a matter of justifiable right (unlike India where it features in the Directive Principles). Brazil created the ‘Unified Health System’ for providing free and unbiased healthcare. It also launched ‘Family Health Programme’ which involves both private and public health care providers, but is publicly funded. IMPACT- According to WHO, 75 per cent of Brazilians rely exclusively on Family Health Programme. Also its health indicators have improved over time, for instance, only 2 per cent children below five are underweight. Brazil’s new health care project is rooted in strong popular movements. Unified Health System was conceived by health activists and is called ‘health sector reforms’. Health is a lively political issue in Brazil, unlike India where health care has received much less heed.
Income Redistribution and Social Security:
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In a study by Martin Ravallion(2011), it is shown that between 1993 and 2005, Brazil’s per capita grew at just 1 per cent (as compared to India rate of 5 %) yet the rate of poverty reduction was much larger. Various redistribution initiatives include – social assistance programmes like pension schemes, minimum wage policies and from 2003 onwards, Bolsa Familia of targeted cash transfers. These programmes had little effect on inequality, however had a significant impact on extreme poverty.
4 Semester | B.A. Economics (H)
EurekaWow | Indian Economic Development Education:
The proportion of children attending private schools at the primary level (10 per cent) is much smaller than in India (30 per cent). Government schools have undergone major reforms. For example, a ‘funding equalization law; has been enacted to ensure fair distribution of education funds, conditional cash transfers have been used to promote school attendance and heavy investment has been made in preschool education. IMPACT: (1) Increase in School Attendance in younger age groups reaching 98 per cent in 2009 in the age group 6-14 years. (2) Reduction in Education Inequality, the Gini coefficient of years of schooling dropping from 0.41 (1995) to 0.29 (2009). (3) Pupil Achievements have improved as in evident in the rates of improvement in test scores of students. (4) By 2009, the average schooling opportunities of the lowest income quintile (poorest 20 per cent) were the same as the richest quintile 16 years earlier.
Comparisons within India There is a regional diversity within India with sharp contrasts. The Indian states that have done well tend to have been those which had solid foundations of participatory development and social support early on, and actively promoted the expansion of human capabilities. Seven major states including Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh (BIMARU), Chhattisgarh, Jharkhand and Odisha have had poor social indicators since long. Computation of multi-dimensional poverty index (MPI) place states like Bihar and Jharkhand in the same category as the poorest African countries. Thus, living conditions in the poorer half of India are not much better, if at all, than the poorer half of Africa. Three major states- Kerala, Tamil Nadu and Himachal Pradesh have relatively high levels of human development. Their performance in enhancing living conditions as well as success in raising per capita income is of our interest. We direct our focus to them over Punjab and Haryana, which also do fairly well for (A) The former states have better levels of gender equity and (B) the former states were quite poor to begin with (1950s), unlike Punjab and Haryana. Kerala- Improvement of living conditions has not only continued, but also accelerated proving it to be sustainable, with the help of rapid economic growth, assisted by Kerala’s focus on elementary education and other basic capabilities. Himachal Pradesh- It launched a drive towards universal elementary education in the early 1970s when it was quite poor. Within the past 40 years, it has come out of social backwardness and deprivation to an advances state. Tamil Nadu – Social relations were extremely oppressive earlier with Dalits (SCs) living in separate colonies generally deprived of social amenities. It was then when Tamil Nadu introduced bold social programmes including universal mid day meals in primary schools. The Dalits had to fight for their rights and the improvement was a result of democratic politics.
Combined population of the above mentioned states is well above 100 million. Certain common features that have been noticed in all the 3 states are as follows:
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4 Semester | B.A. Economics (H)
EurekaWow | Indian Economic Development 1. Active social policies in public education, health care, social security and public amenities are seen in their experiences. 2. These states have followed universalistic principles in provision of essential public services
3.
4.
5.
6.
like midday meals, school education, primary health care, ration cards, electricity etc which have been made available effectively to all on a non-discriminatory basis. In certain cases, the services have also been free. These experiences have been facilitated by a functioning and comparatively efficient administration. There has been little use of short cuts like Para-teachers or conditional cash transfers through school vouchers etc. Traditional public Institutions have laid the foundations of rapid progress in each of the three states. Dealing with social inequality has been a part of their shared experience. In both Kerala and Tamil Nadu, principles of equal citizenship were forged through sustained social reform movements and fierce struggles for equality by the underprivileged groups. These improvements are not just a result of constructive state policies but also of people’s active involvement in democratic politics. The social advances, spread of education and democratic institutions enabled people to have a say in public policy. All three states have achieved rapid economic growth, both on grounds of economic relations and international experience. These states today have some of the highest per capita incomes and lowest poverty rates among the Indian states. These states offer an important evidence of complementarities between economic growth and public support.
Thus, India has enough to learn from the success and failures of its own states and the rest of the world.
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4 Semester | B.A. Economics (H)
