Subir Roy: Great growth, poor quality of life

The finance minister spent a lot of time extolling the UPA's growth performance during the trust vote, but what's this got to do with the aam aadmi?

Most discussions on how widely the fruits of India's recent economic progress have been distributed are hampered by referring to a single yardstick "" change in the proportion of people below the poverty line. The exercise is further vitiated by dispute over the validity of this single data set whose method of computation has changed in the intervening period. The obvious way out is to consult several yardsticks, collected by different agencies. Taken together, these offer an unequal nuanced impression of the reality. From this key policy goals easily follow.

The above graphic captures glimpses of several human development indicators for most of the Indian reform period (1990-2005), including changes in real per capita income, for India and countries with which it must be compared. The BRIC countries, a comparable country each from Africa and the Americas, and Bangladesh with which India has a lot in common, have been examined.

The data needs to be carefully weighed. The Human Development Report warns that data for different years culled from different yearly reports should not be compared as the method of collecting data changes and past data is often revised. To help those who wish to see how country performance has changed over time, a particular table gives country values of the human development index complied by using comparable data. The historical data, however, can be used to rank the countries on indicators for particular years. How these rankings, not absolute indicator values, have changed offer a view of which country has forged ahead and which has not. It also has to be kept in mind that cross country data for the last two years (2006-08) is not yet available. In these years India has seen very high growth which must have positively impacted human development, though we do not know by how much.

The overall takeaway is that India's progress during the reform period in terms of human development and income is the same. Its rank "" second from the bottom and ahead of only Bangladesh "" among its peers (in our list of selected countries) is the same for both 1990 and 2005 for both the human development index and per capita GDP. It has, however, done slightly better (come second) in terms of improvement in per capita GDP than in improvement in its human development index (come third). In terms of the rise in per capita GDP, it is beaten only by China. On the other hand, in terms of improvement in HDI, it is beaten by China and Bangladesh. Significantly, in terms of improvement in the human development index, Bangladesh has done the best among the seven in the 15 years we are looking at.

If you earn more you should surely live longer and a more useful life. In this, India has improved its rank by one during 1990-2005 like Bangladesh and Mexico. On the other hand, China and Russia have dropped by one. A sharper fall (two ranks) has been recorded by South Africa. The data bear out the devastation wrought by AIDS in South Africa, the social disruption in Russia following the demise of the Soviet Union and the rise in inequality and decline in public healthcare provisioning in rural China during its 'socialism with a capitalist face' era.
 

HUMAN DEVELOPMENT INDICATORS
	Life expectancy(1)				Infant mortality(2)				HDI Index score
	1990	Rank	2005	Rank	1991	Rank	2005	Rank	1990	Rank	2005	Rank
India	59.1	6	63.7	5	90	5	56	7	0.521	6	0.619	6
Bangladesh	51.8	7	63.1	6	111	6	54	5	0.422	7	0.547	7
China	70.1	1	72.5	2	29	1	23	3	0.634	5	0.777	4
Brazil	65.6	4	71.7	3	59	4	31	4	0.723	4	0.8	3
Russia	69.1	3	65	4	...		14	1	0.815	1	0.802	2
S Africa	61.7	5	50.8	7	55	3	55	6	0.731	3	0.674	5
Mexico	69.7	2	75.6	1	37	2	22	2	0.768	2	0.829	1

	Child malnutrition(3)				Maternal mortality(4)				% Change in HDI Index
	1990	Rank	2005	Rank	1988	Rank	2005	Rank	2005/1990	Rank
India	63	4	47	6	550	6	450	6	19	3
Bangladesh	66	5	48	7	650	7	570	7	30	1
China	21	3	8	3	130	2	45	2	23	2
Brazil	7	1	6	2	230	4	110	4	11	4
Russia	...		3	1	45	1	28	1	-2	6
S Africa	...		12	5	250	5	400	5	-8	7
Mexico	14	2	8	3	150	3	60	3	8	5

	Adult literacy(5)				Per capita real GDP(6)
	1990	Rank	2005	Rank	1990	Rank	2005	Rank
India	48.2	6	61	5	1,072	6	3,452	6
Bangladesh	35.3	7	47.5	6	872	7	2,051	7
China	73.3	4	90.9	3	1,990	5	6,757	5
Brazil	81.1	3	88.6	4	4,718	4	8,401	4
Russia	94	1	99.4	1	7,968	1	10,845	2
S Africa	70	5		...	4,865	3	11,110	1
Mexico	87.6	2	91.6	2	5,918	2	10,751	3
(1) in years, at birth (2) per thousand live births (3) % under 5 years who are underweight (4) per 1,000 live births (5) % above 15 who can read (6) in PPP dollars

Perhaps the single-most important determinant of the level and quality of development is the health status of the mother and child. If there is grossly unequal distribution of income along with low average levels of income then it will show up in mother and child indices. In infant mortality, India ranks seventh in 2005, after losing two ranks during the reform period. China has also lost two ranks (to third), with South Africa faring the worst (losing three ranks) during the period (again the consequences of aids). Brazil and Mexico have held their ranks. China and India may have lost out equally on rank but China's absolute infant mortality rate is less than half of India's.

India's performance in infant mortality is repeated in child malnutrition. It remains virtually at the bottom of the ladder, along with Bangladesh with the same level of malnutrition. Nearly half the children under five in the two countries are under weight. The picture in maternal mortality is interesting in that there is no change in the rank of any country during the period. India and Bangladesh occupy the bottom of the list, followed by South Africa. But maternal mortality in India is 10 times that in China and close to that in South Africa! India, Bangladesh and South Africa form a cluster of low performers, whereas Russia, Brazil, Mexico and China form a cluster of high performers.

In adult literacy, India, Bangladesh and China have all improved their ranks by one during the period. But in terms of absolute achievement, China belongs to a different league, taking its place alongside Brazil, Russia and Mexico.

The human development index includes the element of income along with other indicators. Since India has clearly made good progress on the income front, a development index calculated without the income element will yield a slightly poorer score than the score in the chart. So during the reform period, progress measured by independent (non-income) indices of human development comes second to progress measured by income. But there has been progress also in terms of human development.

The policy prescription that emerges is that while the past has not been a washout, the future must continue to pursue high growth while distributing its benefits better. For the aam admi this azadi is not jhoothi, but it has to become more meethi.