Economy

Inequality Pulls India’s Human Development Score Down

India has continued to make very little headway in improving the status of human development within the country, moving up only five notches on the United Nation’s recently released Human Development Index (HDI), a ranked list that measures various dimensions of human well-being.

According to the report, which was published on Monday, India placed at 130 out of a list of over 180 countries and continues to remain in the ‘medium human development category’— a group of countries that includes Botswana (Rank 106), Iraq (Rank 121), and Cambodia (Rank 143).

Most of India’s neighbours such as Nepal (Rank 145) and Pakistan (Rank 147) come under the ‘low human development category’.

The United Nations’ HDI, which is collated and put together annually, is based primarily on three fundamental indicators of human development: life expectancy, mean years of education amongst a country’s adult population and per-capita gross national income (GNI).

Over the years, criticism from global civil society and a drive to become more inclusive and well-rounded has seen the UNDP (United Nations Development Programme) come out with other indices such as the gender development index (GDI), the gender inequality index and the multidimensional poverty index (MPI), each of which focus on a different aspect of human well-being. These rankings are released along with the HDI, which still continues to be one of the predominant indices of human development.

While India has moved up in the rankings, it is misleading to compare rankings over the years as the UNDP continuously tweaks the way it measures human development, primarily by using new data sources. For instance, in the recently released report, new purchasing power parity conversion rates were used while new data from the United Nations Population Division led to changes in life expectancy estimates.

Some of these changes have helped India: in the 2013 HDI report for example, India was reported as having a HDI value of 0.554 (out of a maximum possible 1). In the 2014 HDI report, after retrospectively applying the new measurement criteria, the UNDP estimates India’s HDI value in 2013 as 0.604.

Table I – India’s HDI Trends Based on Consistent Time Series Data and New Goal Posts 

Year Life Expectancy at Birth Expected years of Schooling Mean Years of Schooling GNI per capita

(2011 PPP$)

HDI value
1980 53.9 6.4 1.9 1,255 0.362
1985 55.8 7.3 2.4 1,446 0.397
1990 57.9 7.7 3.0 1,754 0.428
1995 60.4 8.3 3.5 2,046 0.462
2000 62.6 8.5 4.4 2,522 0.496
2005 64.5 9.9 4.8 3,239 0.539
2010 66.5 11.1 5.4 4,499 0.586
2011 66.9 11.7 5.4 4,745 0.597
2012 67.3 11.7 5.4 4,909 0.600
2013 67.6 11.7 5.4 5,180 0.604
2014 68.0 11.7 5.4 5,497 0.609

Source: UNDP

Nevertheless, with a HDI value of 0.609 in 2014, India’s HDI value has increased by 68.1% from 1980, mainly on the back of an astronomical rise in GNI per capita over the last 24 years.  There are two important points to be gleaned from the table above, however. The first is that there are signs of  a general slowdown in India’s human development progress from 2010 onwards — the jump seen from 2005 to 2010 is unlikely to be replicated from 2010 to 2015.

The second point is that the last ten years has not seen much growth in life expectancy and in two key educational indicators — ‘expected years of schooling’ and ‘mean years of schooling’.

There should be no surprise, therefore, that after the UNDP “adjusts for inequality”, India’s HDI for 2014 falls to 0.435, a loss of nearly 30% due to inequality in the distribution of the HDI dimension indices. This sharp fall in HDI value is mirrored broadly across countries in the ‘medium human development’.

While India has performed largely well on GDI, with a value of 0.795 for 2014, when the UNDP takes into account gender inequalities (measured by comparing male and female life expectancy, expected years of schooling and GNI per capita as well as looking at reproductive health and empowerment) India stands at 130 among 155 countries—even behind Bangladesh and Pakistan which are ranked at 111 and 121 respectively.

               Table II – India’s GII for 2014 relative to selected countries and groups

Country GII Value GII Rank Maternal Mortality Ratio Adolescent birth rate Female seats in Parliament (%) Population with atleast some secondary education (%) Labour force participation rate (%)
Female Male Female Male
India 0.563 130 190 32.8 12.2 27.0 56.6 27.0 79.9
Bangladesh 0.503 111 170 80.6 20.0 34.1 41.3 57.4 84.1
Pakistan 0.536 121 170 27.3 19.7 19.3 46.1 24.6 82.9
South Asia 0.536 —– 183 38.7 17.5 29.1 54.6 29.8 80.3
Medium HDI 0.506 —– 168 43.4 18.8 34.8 55.3 37.5 79.8

Maternal mortality ratio is expressed in number of deaths per 100,000 live births and adolescent birth rate is expressed in  number of births per 1,000 women ages 15-19. Source: UNDP

Bangladesh and Pakistan, for instance, currently beat India when it comes to the number of female seats in parliament and Bangladesh leads dramatically amongst countries in the Indian subcontinent when it comes to indicators such as adolescent birth rate and female labour force participation.

Imbalances in paid and unpaid work using the time-use survey data. Source: UNDP, HDR 2015

Imbalances in paid and unpaid work using the time-use survey data. Source: UNDP, HDR 2015

While the annual HDI report is best known for its HDI values and country rankings — and is popular amongst policy-makers and big charities that seek to do developmental work in the Global South — this year’s edition also delves crucially into the nature of work, global labour and how it relates to human development. Past publications have focused on issues of corporate exploitation, the protection of trade unions and the relationship between unpaid work and social safety nets.

Focus on Labour and IT

This time around, the UNDP report specifically addresses the role of Silicon Valley in global human development: the role of technology in shaking up work opportunities and labour markets, the role of the Internet in increasing access to knowledge and per capita incomes, and how technology companies pose a threat and present an opportunity to collective action and trade unionism.

To its credit, the UNDP does not adopt the World Bank’s neoliberal, modernisation-driven view of development but instead provides a nuanced perspective of how human development in India and across the world can be affected by Silicon Valley’s technology revolution.

After acknowledging the vast role that India’s traditional offshoring and IT industry has played — the number of direct jobs in the sector has jumped from 284,000 in 2000 to over 2 million by 2010 — the UN pitches for greater Internet access in developing countries such as India; a topic that has been the centre of much debate in the country over the last year. The report quotes a Harvard study and points out that an estimated $2.2 trillion in GDP could be generated in developing countries, with more than 65 million new jobs created in India alone, if Internet access in developing countries were the same as in developed countries.

“Technology is allowing traditional taxi drives to work more efficiently finding customers via online services such as Uber and GrabTaxi, which operate in several countries in South-East Asia. The same principle is being used by auto rickshaw drivers in India via mGaadi,” the report says. Indian policy-makers would do well to heed such advice—the only regulatory initiative taken by an Indian state government with regard to taxi-hailing applications in the recent past was the ham-fisted response of the Delhi Government in the Uber rape case.

Portions of the India-specific section appear to speak directly to the Indian government and local civil society: the report devotes a number of paragraphs to addressing the efficacy of direct employment guarantee programmes such as the National Rural Employment Guarantee Scheme and the advantage of direct cash transfer initiatives as a means of funding job searches and high-quality skill development.

The HDI report’s most valuable advice to developing countries including India, however, are suggestions that it has made for a number of years: “a return to full employment policies, stronger social protection and universal provision of social services”.

For India, the report says, “the cost of setting such a floor with universal pension, basic health care, child benefits and employment schemes” would be about 4% of India’s GDP.