Opinion Lost in comparison

For instance,India’s non-PPP per capita income is $1046. Taken in isolation,one doesn’t know whether that is high or low. But it is sobering to know Luxembourg’s non-PPP per capita income is $103,042. That’s non-PPP,and PPP (purchasing power parity) transformations generally increase per capita incomes for developing countries and lower them for developed ones. Consequently,India’s PPP per capita income is $2753. But even then,Luxembourg’s happens to be $79,485.

To return to the point,it isn’t that India has not improved absolutely. But India has improved less than other countries. Historically,though not from HDR 2007/08 to 2009,India’s rank has also been affected by inclusion of more countries. To understand what explains India’s human development,or its lack,as represented by the HDI,one should look at the three components. Other than PPP per capita income of $2753,there is life expectancy at birth of 63.4 years,adult literacy rate of 66.0 per cent and combined gross enrolment ratio of 61 per cent. Just so we have the benchmarks right,HDR 2007/08 reported PPP per capita income of $3452,life expectancy at birth of 63.7 years,adult literacy rate of 61 per cent and combined gross enrolment ratio of 63.8 per cent.

Except adult literacy,that’s a decline in all other variables from 2005 to 2007. Without defending the state of human non-development in India,the point is we do have data problems and these affect ranks. For instance,PPP conversions require exchange rates and those are based on price data. The IMF has revised these,scaling down PPP incomes in developing countries. There are question marks about whether data on gross enrolment ratios in tertiary education are good enough. Let’s also mention a figure invariably quoted from HDR,though not part of the HDI. The head count ratio (poverty ratio) is 28.6 per cent below the national poverty line (this is 2000-2006,not 2004-05),41.6 per cent below $1.25 a day and 75.6 per cent below $2 a day. The Gini index is reported as 36.8,higher than what NSS expenditure shows.

There are some additional points to be made about India’s HDI story. First,subject to what was said about PPP and exchange rates,improvements since 1991 have largely been driven by income growth. Second,education indicators have improved. The literacy rates used in HDR are for adults,that is,for those above 15. So they don’t match with Census literacy figures and there is a substantial amount of adult illiteracy in the pipeline. There have also been improvements in gross enrolment ratios in primary education,including for girls. Once adult illiteracy is out of the pipeline and better gross enrolment moves up the scale to secondary and tertiary (with reduction in gender bias),a big bang improvement in education should occur. Third,education improvements aren’t matched by improvements in health indicators,perhaps because outcome improvements in health are more complicated. West Bengal should take heart from what’s happened in Bangladesh. Though not strictly comparable,data from West Bengal’s 2004 HDR can be contrasted with data from Bangladesh. HDRs aren’t only about data and ranks. Had that been the case,they would soon have run out of steam and become boring. Therefore,each HDR has a focus,2009 being on human mobility and development. Better economic opportunities have driven human migration since the days we left Africa. Thus,if human development is a determinant for migration,we will soon have illegal migration from West Bengal to Bangladesh.

Therefore,there is a fourth point. There is wide variation in human development across India’s states and regions. The all-India picture is too aggregated. If India’s human development is to improve,it has to improve in the badlands of backwardness and misgovernance,and inadequate and inefficient delivery of public goods and services characterises these. There are now state HDRs and district-level ones have started. But these are restricted to those geographical confines and do not permit inter-state comparisons. The Planning Commission’s National HDR is dated,it goes back to 2001. There is a case for updating the National HDR. Since Montek Singh Ahluwalia launched the UN report in Delhi,perhaps that may happen. On the focused item of migration,this can be both international and internal. HDR tells us India has a stock of 5.9 million international migrants,with a net migration rate that is negative. The best indication for India’s development is for the net migration rate to turn positive. Both capital and labour will then wish to move to India. International migration attracts a lot of attention because it is more visible and data are better. It figures in debates about protectionism and remittances. But there is a substantial amount of internal migration in India too. Between 1990 and 2005,HDR reports internal migration of 42.3 million for India,with a migration rate of 4.1 per cent.

Most successful countries have higher internal migration rates. There is certainly a data problem. HDR captures migration between states and the bulk of Indian internal migration occurs within the state,often within the district. Roughly 30 per cent of India’s population doesn’t live in the place of birth. Because of the hukou system,Chinese data on internal migration are better. Having said this,there are barriers to internal migration in India. For example,migration doesn’t occur without capacity to bear threshold transaction costs. Migration is one vent for lack of human development in backward states and districts.

The writer is a Delhi-based economist

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