Category: India

HDR 2006 and India

The Human Development Report for the year 2006 has been released. This year’s HDI refers to 2004.India has moved one step up to be ranked 126 among a total of 177 countries. [Last year India was ranked 127] India’s HDI rank falls under the category of ‘medium human development countries’.

The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and enrolment at the primary, secondary and tertiary level) and having a decent standard of living (measured by purchasing power parity, PPP, income). The index is not in any sense a comprehensive measure of human development. It does not, for example, include important indicators such as inequality and difficult to measure indicators like respect for human rights and political freedoms. What it does provide is a broadened prism for viewing human progress and the complex relationship between income and well-being. Read more on HDI here.

HDI Rankings

Norway is ranked first in this year’s HDR report, while the USA is ranked 8th, Japan 7th, China 81st and Pakistan 134th. And Niger is ranked last at 177.

India: Human Development [A few indicators]

1) HDI Rank: 126

2) The population below income poverty line of 2$ per day is 79.9%, though as per the national poverty line it is 28.6%.

3) The HPI (Human Poverty Index) for the 102 developing countries rank India at 55.

4) The Annual Population growth rate is pegged at a rate of 1.3%. [2004-15]

5) The Public health expenditure of India as a percentage of GDP is 1.2%, while that of the private is 3.6%. [2003]

6) The percentage of total population who are undernourished is 20%. [2001/03]

7) Life expectancy at birth: 63.1 [2000-05]

8] Infant mortality rate per 1000 live births: 62 [2004]

9) The public expenditure on Education as a per cent of GDP is 3.3% [2002-04] which has fallen from 3.7% in 1991.

An irony

‘Only 25% of the poorest households in developing countries have access to piped water in their homes as compared to 85% of the richest households.’ Says HDR 2006.

The same report states that only 14% of people in India lack access to an improved water source. This implies that 86% of people in India have access to improved water, thereby rendering India almost in par with developed countries in terms of access to an improved water source. This figure has been definitely deflated. One of the major reasons for this deflated figure is due to lack of adequate and complete statistics.

Conclusions

The HDI alone or the GDP alone cannot give the real picture of any economy. Both the HDI and the GDP do not take into account the inequalities. India is a country which is characterised by stark inequalities in wealth, income, education, health, land etc. India is the land of the billionaires as well as people who go hungry everyday and the land where little children are forced to work.

The authorities’ rhetoric of trickle down effects of an 8% GDP will not work, due to lack of proper institutions to cater to the needs of the poor. Microfinance, an institution which is working needs to be implemented more effectively and in a transparent manner, because the misuse of Microfinance institutions can lead to more trouble than not having them at all.

The main focus of this year’s HDR is on the Water Crisis which is plaguing countries both developed and developing alike. Adverse effects of pollution, increased green house gases can be witnessed in unanticipated floods and droughts plaguing many countries. And in the last few years, we had to face the Tsunami which wreaked havoc. According to Developments, “97% of all the deaths from natural disasters are in poor countries”.

The Indian populace has been repeatedly told that India is reducing its poverty and that it is well under 30%. They are right. [According to the official poverty line of a dollar per day] But keeping in mind the needs of the people for a decent livelihood, a family needs at least an income of 2000 rupees per month!

On the whole, there is nothing in the report that makes India proud. India needs to step up its expenditure specifically targeting education and health sectors. The draft to the 11th 5 year plan, speaks about inclusive growth, but adequate emphasis has not been given to sectors which need development.

References

1) Human Development Report 2006

Bimal Jalan's Future of India

The Future of India
Bimal Jalan
Penguin Book
Price: Rs 250

Bimal Jalan, one of India’s well known economists and a former governor of the RBI has brought out the relationship between politics, economics and governance and their consequences in a very perspicuous way.

He emphasises the need for more participation in democracy, as the benefits which can be derived are high. He says that ‘Corrective action is feasible only if there is more effective political participation by the ordinary citizen-in short, fuller practice of democracy.’

He has tried his best to unwrap and unravel the morass of bureaucracy.
‘Political parties are now subservient to their leaders, and not to the people who sustain them.’

‘The selection for the civil service posts at all levels of government at the centre and states is truly independent of political interference.’ He recognises and posits absolute transparency in the selection of civil servants, but he goes on to say that ‘While politicians are free to overrule the advice rendered by civil servants, the advisory functions of the bureaucracy are expected to be performed without regard to their impact on the private interests of politicians and the party in power.’

‘Political leaders deliver what civil service unions demand by way of pay, security of service, leave, working hours and creation of jobs. In their turn, civil servants deliver what the politicians want in terms of power and favours. The casualty is the public interest.’ The knot between the politicians and the bureaucrats is tight and one cannot live without the support of the other.

Bimal Jalan has brought out the adverse impacts of delays in judiciary, a very integral part of the constitutional framework of a country and brings to our notice the growing disjuncture between politics and economics.

Jalan on coalitions: ‘These coalitions are always more interested in influencing the distribution of wealth and income in their favour rather than in the generation of additional output which has to be shared with the rest of the society.’

He has enumerated the problems that have befallen the public delivery systems like lack of accountability, fiscal stringency etc.

On corruption:
‘Corruption is a major hurdle in growth, development and poverty alleviation.’
‘Corruption is also an important cause of fiscal drain and higher inflation in developing societies.’
‘Thus, another economic effect of corruption is that it further aggravates inequality in an already unequal society.’

One of the main reasons for the proliferation of bribes is that ‘If administrative rules and regulations are complex and involve multiple agencies acting at cross purposes, then the public has no option but to purchase the required permits, licenses and registrations by paying bribes.’

Thus, Bimal Jalan has brought out the main causes of the underperformance by India in the economic, social and political spheres. He has also put forth remedies which seek to enhance the efficacy of the government. It is a book which deserves to be read by all those who want to know India or change India.

Economic Anthropology

Economics can be defined as the science which lends a helping hand to the economic units enabling them to make rational choices from the available information. The economic units include households, producers, consumers, entrepreneurs, government, etc. Anthropology is the science that deals with the origins, physical and cultural development, biological characteristics, and social customs and beliefs of humankind.

Economic anthropology analyses decisions and behaviour of economic agents who are embedded in the networks of social relationships and cultural influences. Economic Anthropology is directly concerned with the most central anthropological issues of human nature, choice, values, and morality.

Of late, the sociological aspects of issues pertaining to the economy are increasingly being avoided. The convenient answer which is given for such occurrence is that a ‘lobby’ has exerted tremendous pressure. The issue is discarded and the media has a majority share in making most of the populace ‘conveniently informed’.

Like any other science, the social sciences are interdependent and interrelated. Thus, to learn economics as an isolated subject, will not enable the learner to get a totalitarian comprehensive view of the economy in the real sense. Mathematics has got so entrenched in economics, that other social science like sociology, history etc are not given the required importance.

Thus, it is of paramount importance that a paper in Economic Anthropology’be offered to the students of economics, especially at the undergraduate level. In India, owing to the impact of Occidentalism and the better research opportunities provided in the west, especially in the US, a frantic race for learning mathematics is imminent. (Other social sciences are ignored) This can lead to a clique of economists who have limited knowledge about the sociological impacts of policies and issues under their purview.

Resources online

1) Society for Economic Anthropology
2) Economic Anthropology books
3) University of Sussex (Study abroad: Economic Anthropology)
4) Clifford Geertz (Anthropologist)

Why fear subsidies’

Agricultural subsidies and the refusal of the US and EU to phase them out are preventing poorer countries from developing and damaging multilateral trade says Joseph Stiglitz in Taipei times.

KICK-ASS, a website started by the Guardian aimed at kicking into oblivion all agricultural subsidies, states that ‘over 60% of US farmers don’t get any subsidies at all and manage to survive. New Zealand abandoned subsidies unilaterally some years ago and its farming industry has thrived.’

The main concerns are
1) With elections looming in November, US President George W. Bush could not “sacrifice” the 25,000 wealthy cotton farmers or the 10,000 prosperous rice farmers and their campaign contributions.
2) With 70 percent or so of people in developing countries depending directly or indirectly on agriculture, they are the losers under the current regime.
3) If markets are opened up, countries should be given the right to countervail US and European subsidies.

In India, more than 60% of the populace depend on agriculture for their livelihood. The subsidies that the developed nations offer their farmers vis-‘-vis to what the developing countries can offer is very large. The developing nations find it difficult to withstand this competition in the world markets. If the subsidies are not reduced by the US and the EU, it will be the developing nations who will have to bear the brunt.