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IPC-IG in the news: The Hindu newspaper on Human Development in India

Kerala example draws U.N. praise

New Delhi, June 12, 2013 – Kerala provides an empirical example to show how it is possible to achieve both growth and improved income distribution through human development, a United Nations working paper has said.

The document also estimates substantial losses in human development due to inequality in different dimensions across Indian States.

Among three dimensions – education, health and income – the potential lost due to inequalities is the highest in education, while the extent of inequality is staggering in health.

The loss due to inequality is the highest with respect to education (43 per cent), followed by health (34 per cent), and income (16 per cent). In other words, the potential lost due to inequality is the highest in the education sector. The rank correlation with human development index (HDI) across States is the highest for income, followed by education and health.

Source: ‘Bihar’ JAY MANDAL/UNDP INDIA

Source: ‘Bihar’ JAY MANDAL/UNDP INDIA

The average loss due to inequality in India is 32 per cent at the all-India level. It is the highest for Madhya Pradesh (36 per cent) and Chhattisgarh (35 per cent) and the lowest for Kerala (17 per cent).

The loss due to inequality is higher than the national average in Madhya Pradesh, Chhattisgarh, Uttar Pradesh, Rajasthan, Jharkhand, Orissa, Uttarakhand, and Arunachal Pradesh. These are the States which need serious attention in promoting access to education and health facilities to reduce inequalities in these dimensions and reduce the loss in human development, the paper suggests.

Kerala is the only State in the country which remains in the ‘very high human development index (HDI)’ with respect to all the three dimensions, both with and without adjustment for inequality. In addition, Nagaland, Mizoram, and Punjab fare well by most of the indicators, with and without the adjustment for inequality.

The document – Human Development in India: Costs of Inequality, a working paper brought out for the International Policy Centre for Inclusive Growth of the United Nations Development Programme (UNDP) – seeks to quantify the loss in human development due to inequalities in these three dimensions across States in India.

This is done using the methodology to estimate a new index called the Inequality-adjusted Human Development Index (IHDI), proposed by the UNDP. An estimate of the loss has been expressed as a percentage of HDI. The document is authored by M.H. Suryanarayan of the Indira Gandhi Institute of Development Research, Mumbai, and Ankush Agrawal of the Indian Institute of Technology, Delhi.

.Unlike an income redistribution strategy for a given income level, which would involve net transfers between two segments of the population through instruments such as taxes and subsidies, the option to reduce inequality in health and education would not involve any transfer or redistribution. Instead, it would call for an improvement in the health and education status of the deprived sections of the population.

The average loss because of inequality in income is 16 per cent at the all-India level. It is the highest for Maharashtra (19 per cent), followed by Tamil Nadu (17 per cent), and the lowest for Manipur (4 per cent). Maharashtra, which ranks eighth in the country based on the income dimension index, ranks 17th after the adjustment for income inequality.

All the States except the economically poorer such as Bihar, Madhya Pradesh, Rajasthan, Orissa, and Uttar Pradesh (including the newly carved States of Chhattisgarh, Jharkhand, and Uttarakhand) and Assam and Arunachal Pradesh fare as well as or better than the nation as a whole in terms of sub-index for the education dimension.

The loss in the education component on account of inequality at the all-India level is 43 per cent. The loss is the highest in Uttar Pradesh, Rajasthan, and Jharkhand (46 per cent) and the lowest in Mizoram (17 per cent) and Kerala (23 per cent). The education index is the highest for Kerala (0.915), followed by Nagaland (0.905), and Himachal Pradesh (0.790), and the lowest for Orissa (0.281), and Madhya Pradesh (0.337).

The loss due to inequality is more than that at the national level in Karnataka, Haryana, Chhattisgarh, Uttarakhand, Arunachal Pradesh, Jammu and Kashmir, Andhra Pradesh, Bihar, Madhya Pradesh, Jharkhand, Rajasthan, and Uttar Pradesh.

The average loss due to inequality in health is 34 per cent. It is the highest in Chhattisgarh and Madhya Pradesh (43 per cent) and the lowest in Kerala (11 per cent). As far as ranking is concerned, Kerala (0.854) ranks first, followed by Punjab (0.782) and the seven north-eastern States (0.768 each). Madhya Pradesh (0.601) and Assam (0.616) are last in terms of the sub-index for health

Nagaland (0.987) ranks first in terms of income index, followed by Kerala (0.953) and Punjab (0.915). The lowest ranked are Bihar (0.498) and Orissa (0.504). The loss due to inequality is 16 per cent at the national level.

Indian achievement in terms of the normalised HDI with reference to the international yardstick is 0.504 ranking in the category of ‘medium human development’ countries. It falls short of the world average, which is 0.624.

Source: Aarti Dhar, The Hindu

Related research by the IPC-IG may be found with the following links:

The Pursuit of Food Security in India: Policies sans Concept and Commitment?
What is Inclusive Growth? An Alternative Perspective
Human Development in India: Costs of Inequality
The Direct Benefit Transfer System: Made in India

Short URL: http://pressroom.ipc-undp.org/?p=14520

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