Growth Inferiority

India may be at the forefront in terms of economic growth, but it continues to lag behind in quality of life, with its Human Development Index (HDI) remaining static at a low 127 according to the latest United Nations’ Human Development Report (HDR) 2005, released on Wednesday.

One of the indication brought out in the HDR which should be of concern is that while India has moved into the premier league of world economic growth, the pick-up in growth has not translated into a commensurate decline in poverty. On the Human Poverty Index (HPI-1), India’s rank is a modest 58 amongst 103 developing countries.

The UN Human Development Report comes at a time in the backdrop of another damning report, which had brought out statistics pointing out that nearly half of Asia’s 1.27 billion children live in poverty - deprived of food, safe drinking water, health or shelter. By the way, India it is reported has the largest number of poor children of any nation, with an estimated 80 percent of its 400 million children severely deprived and 60 percent absolutely poor. Almost half of all children under 5 are malnourished and a third of newborns are significantly underweight. 

As the report suggests mere income growth should not be seen as indicative of the well being of a society. This brings to question the very rationale of economic growth and globalization. The problem areas are obviously the pressure of rapid population growth; scarce resources; lack of access to education, health care, clean water and sanitation; caste discrimination; and weak governance and corruption.

It has to be accepted that human deprivation and inequalities are not merely a result of economic factors; rather they go hand in hand with the social and political factors rooted in poor governance. Unfortunately and ironically, possessing one of the most creditable records on democracy and civil rights, in the developing world, India’s political process has largely failed to deliver on basic social needs. Instead, many countries with a far worse record—China and most of the Arab world—have managed to do better when it comes to human development. But then democracy is not to be equated with holding elections and it has to be realized that democratic governance facilitates human development only when institutions are accountable to people and the latter can fully participate (beyond voting in elections) and are involved in decision-making. In this respect, addressing this issue while strengthening institutions—such as the media and civil society—are critical for building a virtuous cycle between governance and human development in which one will strengthen the other.

Despite the growing economic clout of India as a major Asian powerhouse and the success stories on economic reforms and globalization it is, indeed a sad irony that endemic poverty continue to pervade the country’s rural landscape. What can explain this phenomenon where a section of the society is unable to fulfill even its basic necessities of life? Economic planners must not assume that increase of national income would lead to rise in living standards of the poor. One of the paradoxes of the reform era in India is that even though economic liberalization has led to a broad upswing in growth rates, there has been no significant dent made in the country’s poverty profile. The latest UN report finding should serve as a reminder that growth alone is not the answer.