Expert Speak India Matters
Published on Nov 12, 2018
India’s poor HCI ranking: A warning, not an insult

The government seems to be in complete denial when presented with India’s ranking according to World Bank’s Human Capital Index (HCI) late last month. This is the first attempt by the World Bank at calculating the Human Capital Index. The rankings are based on health, education and sustainability of development. It assesses the future productivity and earnings potential of citizens of 157 members of the World Bank. It is rather shameful that India, the fastest growing country in the world, has 115th ranking out of 157 countries. This ranking  is lower than that of Nepal, Sri Lanka, Myanmar and Bangladesh.

Instead of feeling offended that the World Bank has not taken into account the various schemes for improvement of health and education under the Modi government, the Finance Ministry ought to worry about the outcomes of the schemes and why the results have not been reflected in the Human Capital Index.

Basically the HCI score has three components — survival, health and school. The index measures mortality rate for children under five, early childhood, stunting rates due to malnutrition, health outcomes based on the proportion of 15-year-olds who survive until age 60. In India, 83 per cent of all 15-year-olds will survive till age of 60. It measures educational achievements based on the years of schooling of a child and what she can expect to obtain by age 18 — combined with a country’s relative performance on student achievement tests.  It is also about earning potentials of individuals which in the case of Singapore was at 88 per cent while the US’s productivity and earnings of individuals were measured at 76 per cent of potential. India’s productivity and earnings of individuals is only 44 percent, way below the Asian peers.

The potential of India’s citizens is low when measured in terms of productivity and earnings because India has dismal record on hunger, nutrition and quality of education. According to the global Hunger Index, India is at 103th position out of 119   countries. In 2017, India had the highest number of malnutrition cases and India has 14 out of 15 most polluted cities in the world. In 2018, it is reported that there have been 2 million premature deaths in India due to pollution. India had the highest number of TB incidences and largest number of multidrug resistant TB in 2016.

Since HCI places so much importance on quality of education, we have a gloomy picture in India.  According to 2011 census, 14 percent of men aged 25 to 34 years hadn’t studied beyond class 10 and 11.5 per cent hadn’t gone beyond class 12. Only 14.6 per cent were graduates. For women, the data is worse, 10 percent stopped studying after class 10, 8 per cent after class 12 and 11 per cent were graduates.

According to the annual status of education report for 2017, 25 per cent of rural students between the ages of 14 to 18 years could not read basic text fluently in their own language. On an average, 50 per cent students struggled to divide 3 digits by 1 digit.   The expected years of school is only 5.8 years in India rather than 8 compulsory years of education promised by the Right to Education Act 2009. If the quality of education improves, the productivity of the citizens will naturally improve which will reduce poverty and increase GDP growth.

There has been criticism regarding the methodology followed by the World Bank in calculating the HCI. Its change of stance from the past is also noticeable. In the past, the World Bank kept emphasising on infrastructure building to reduce poverty. Now its focus has turned to prodding nations to have higher expenditure on health and education. Its emphasis on education to merely increase productivity and earning potential of individuals is not the only aim of education, according to critics. The UN’s Sustainable Development Goals for example take a better view and the emphasis is on the world committing to producing more inclusive, equitable quality of education for all. The HCI calculations are also different from Amartya Sen’s approach which aims at not so much on enhancing human capital but enhancing human capabilities which means the individuals’ autonomy to use his or her skills to achieve the lives they have reasons to value.

According to some critics, the HCI has reduced workers to commodities and education has been reduced to an input for economic prosperity. They argue that merely churning out workers for capitalist production is not the purpose of education. Collectively, education around the world can achieve a more just, peaceful, and sustainable world development. Thus quality of education should be based on research, evidence and dialogue.

Regarding the health outcome in India, Modi’s scheme of Ayushman Bharat aims high and guarantees health insurance to 500 million people. The outcome of the scheme is not known yet, but hopefully it will improve the dire straits which India’s public healthcare system currently is in. Primary healthcare requires more attention to increase the nutritional intake of children as well the preventive healthcare against common diseases of children that are responsible for their premature deaths. Unfortunately, the scheme’s emphasis is on secondary health care in hospitals.

In any case, India should recognise and admit that the expenditure on health and education is not enough and it has to be increased. India’s expenditure on health is a mere 1.4 per cent of the GDP and 3.1 per cent of the GDP on education.  The achievements on the military fronts are commendable by contrast. India counts itself as a part of a select club of countries with advanced defence technology, including nuclear weapons programme. It is the top importer of military equipment for the last five years. According to the Stockholm International Peace Research Institute, India has become the world’s largest military spender in 2016.

Is it right to have such global ambitions of being a ‘leading power’ in the world with such a poor record on both human development and human capital fronts? India should take the HCI poor ranking as a warning rather than an insult because unless all individuals have a decent education and adequate healthcare, the nation will suffer on account of low productivity and slow economic growth. Unless there is improvement in the quality of education, there is bound to be a rise in unemployment when AI and digital economy come in a big way to India.

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David Rusnok

David Rusnok

David Rusnok Researcher Strengthening National Climate Policy Implementation (SNAPFI) project DIW Germany

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