India: the gap between rhetoric and reality…

[By Frederick Noronha] India, with its aspirations of being a global
super-power in the 21st century, has a long way to go if one takes the
rankings of the United Nations Development Programme which places this
country at 127th among countries worldwide in terms of the human
development index (HDI). India also ranks only 118th among all
countries in terms of its gross domestic product per head.

UNDP calls India (along with China) some of the most “highly
visible globalization success stories”. But it argues that
that both are “failing to convert wealth creation and rising
incomes into a more rapid decline in child mortality”. It
says that deep-rooted human development inequality is “at the
heart of the problem”.

Some more stark home-truths come out from the UNDP’s Human
Development Report 2005. For instance: India alone accounts
for one in five child deaths in the world, amounting to 2.5
child deaths annually.

India also has an income per capita similar to Honduras and
Viet Nam, but a far higher neonatal mortality rate in 2003.
Only 42% of Indian children are immunised. Someone born in
India can expect to live 14 fewer years than somebody born in
the United States!

Likewise, girls born in south Indian state of Kerala, which
is known for its better social indices, are five times more
likely to reach their fifth birthday, are twice likely to
become literate and are likely to live 20 years longer than
girls born in Uttar Pradesh.

Other shocking figures: In Tamil Nadu, for instance, HIV
prevalence rates higher than 50% have been found among female
sex workers.

South Asia, incidentally, has lower levels of poverty and
higher average incomes than Sub-Saharan Africa, but the
percentage of underweight women is four times higher in South
Asia and the child malnutrition rate is 20% higher.

Eliminating gender inequality in South Asia could reduce the
underweight rate among children less than three years old by
13 per centage points, and this translates into 13.4 million
fewer malnourished children, says the UNDP.

One survey in Rajasthan’s poorest districts found that over
half of health centres were closed during periods when they
were supposed to be open. Another survey based on unannounced
visits to health clincis found that across India, 40% of
clinics lacked a trained person on site at the time of the

Mortality rates among children aged one to five is 50% higher
for girls than boys in India. “If India closed the gender gap
in mortality between girls and boys aged 1-5, the country
would save an estimated 130,000 lives, reducing the overall
child mortality rate by five percent,” says the UNDP. As the
UNDP puts it, these young lives are lost each year “because
of the disadvantage associated with being born with two X

Here is cause for concern too: “India’s capacity to
redistribute the benefits of higher growth through the fiscal
system is constrained by a tax-to-revenue ratio of only 10%.
After two decades of growth, that ratio has not increased.”

Then, there’s the harsh truth, even if it goes against the
current neo-liberal orthodoxy: “Market protection has helped
India emerge as a global force in the automobile components
sector, with output at $4.2 billion in 2001 and exports worth
$800 million. High import barriers created an incentive for
foreign investors to locate in India and build alliances with
local firms. These barriers were reduced slowly, in start
contrast to Latin America.”

What more: India combined deep tariff cuts with an improved
growth performance in the 1990’s. But, the higher growth path
predates import liberalization by a decade, and tariffs
remain relatively high. So is an ‘open’ economy necessarily
good for growth and human development? This, says the UNDP,
remains a “deeply ingrained” idea.

Since 1990, India has reduced its average tariff from more
than 80% to 20%, enabling firms to obtain the imports needed
to sustain an “increasingly dynamic growth process”. “One of
the problems in India may be that import liberalization has
not gone far enough in some areas. Tariffs on inputs for
manufacturing are far higher than the world average,
hindering the competitiveness of products that rely on
imported inputs,” adds the UNDP HRD2005.

India’s software sector accounts for 16% of exports and
provides jobs to half a million people. Two-thirds of exports
go to the US, and another quarter to Europe. Almost half of
these exports — valued at over $3 billion in 2002 — are
delivered on site by professional staff.

BARRIERS, GLOBALLY: But globally, there is the reality of
access barriers including some immigration-related issues,
and “onerous” visa eligibility. For instance, would-be
importers of Indian professional services are required to
conduct prior searches in domestic labour markets to prove
that no alternative labour supply is available.

They also have to meet wage parity requirements. This means
that employers have to pay the wage prevailing in the host
country (thus negating cost advantages), while foreign
workers have to contribut to social security schemes (to
whose benefits they are not entitled).

Software engineers are also required to meet minimum
experience requirements — five years in the UK and three in
the US — to pass through cumbersome procedures for work
permits. In addition, there are quota restrictions on how
many workers can enter, and complex “economic needs” tests to
be passed!

India is one of the world’s fastest growing export economies.
Its exports are rising at more than 10% a year since 1990.
But it still accounts for just 0.7% of world exports.

Likewise, India’s strengthened “intelletual property” rules
will delay the entry of generic drugs, driving up prices. One
estimate for India suggests that costs to households
associated with higher prices for medicine will increase by
some $670 million, almost double the current spending on all
anti-bacterial medicines.

New threats emerging include serious epidemics breaking out
in “several Indian states”. India is rated as being “in the
front rank of high-growth globalizing countries” but only to
a more modest degree when compared with China.

“India is widely off-track for the child mortality target.
The annual rate of decline in child mortality fell from 2.9%
in the 1980s to 2.3% since 1990 — a slowdown of almost
one-fifth…. Developments in India and China have global
implications. India alone accounts for 2.5 million child
deaths annually, one in five of the world total,” says the

Bangladesh has overtaken India in terms of child-mortality
rate reduction. If India had matched Bangaldesh’s rate of
reductio in child mortality over the past decade, some
732,000 fewer children would die this year. Clearly, the UNDP
argues, there is still a “huge scope” for the rapid
reductions in child deaths in India (besides China).

There are other statistics too lending cause for concern.

Female mortality rates remain higher than male upto the age
of 30, reversing the typical demographic pattern. These
gender differences reflect a widespread preference for sons,
particularly in the north Indian states. Girls are valued
less than their brothers, and are often brought to health
facilities in more advanced stages of their illness, taken to
less qualified doctors, and have less money spent on their
healthcare, says the UNDP.

“Gender inequality is one of the most powerful brakes on
human development. Women’s education matters in its own
right, but it is also closely associated with child
mortality,” cautions the UNDP. “Apart from being less prone
to undernutrition, better educated mothers are more likely to
use basic health services, have fewer children at an older
age and are more lilely to space the births — all factors
positively associated with child survival. As well as
depriving girls of a basic right, education inequalities in
India translated into more child deaths.”

Four Indian states account for more than half of child
deaths. These are: Bihar, Madhya Pradesh, Rajasthan and Uttar
Pradesh. By contrast, states like Kerala have a wholly
differing gender record.

“Translating economic suceess into human development advances
will require public policies aimed explicitly at broadening
the distribution of benefits from growth and global
integration, increased public investment in rural areas and
services, and above all political leadership to end poor
governance and address the underlying causes of gender
equality,” adds the UNDP.

It sees encouraging signs “that this leadership may be
starting to emerge”.

It points to the 2005-launched $1.5 billion National Rural
Health Mission, targetting some 300,000 villages with a focus
on the poorest states of the north and north-east.
Commitments have come to hike public spending from 0.9% of
the national income to 2.3%.

Spending on education has also been increased. States like
Himachal Pradesh and Tamil Nadu have notched up rapid
progress in education, sometimes by increasing incentives,
such as free school meals, scholarships and free textbooks —
aimed at increasing the participation of poor households.

In Maharashtra, a three-year pilot project covering 39
villages extending basic ante-natal care programmes through
home-based care provisions and simple clinical interventions
cost just $5 per person covered. Infant mortality fell from
75 deaths per 1,000 live births from 1993-95 to 39 deaths
three years later. Morality in an adjacent district had
meanwhile declined from 77 deaths per 1,000 live births to
only 75 only over the same period.

It’s not a question of how much is spent and what services
are available. Even where public health services are
available, they are often not used by the poor. For instance,
in India, a large share of demand s direccted towards
“poorly-qualified private providers”.

One survey in Rajasthan’s poorest districts found poor
households used private health providers even when nominally
free public services were available. One reason: over half of
all health centres were closed during period when they were
supposed to be open. When facilities are open, they often
lack a trained staff member on site. For India as a whole, a
survey found that 40% of the clinics lack a trained person on
site at the time of unannounced visits.

“Political leadership of a high order will be needed to
address these challenges. Failure to provide it and to extend
health and education opportunities to all, regardless of
wealth and gender, will ultimately act as a constraint on
India’s future prospects in the global economy,” says the
UNDP bluntly.

On the positive side, South Asia has generally “much lower
levels of inequality” than Latin America and Sub-Saharan
Africa. It also notes that India continues to be a “thriving
democracy”.Integration into global markets has enhanced
wealth creation, generated economic dynamism and raised
living standards for “many millions” in India, apart from

India’s Kerala state has an urban death rate lower than that
for African Americans in Washington DC. UNDP also praises
Maharashtra’s Employment Guarantee Scheme. It says: “Since
the mid-1970’s, it has provided agricultuwral labourers and
small farmers with up to 100 days in paid employment on rural
works programs. Women account for just under half the
beneficiaries. Extending the program to the whole of India
would cost an estimated 0.5% to 1% of national income in
transfers to 40 million rural labourers and smallholders. If
effectively targetd, this would lift most of the recipients
above the poverty line.”

UNDP also notes that in West Bengal, the agricultural incomes
rose following tenancy reforms and the recongition of the
land-rights of the poor.

Is there cause for hope? At the 4% annual per capita growth
rate achieved since 1980, incomes double every 17 years. With
the 1% per capita growth rate India experienced in the two
decades before 1980, it took 66 years for incomes to double.

Says the UNDP: “Because incomes have been growting more
rapidly in China and (less spectacularly) in India than in
high-income countries over the past two-decades, the average
gap has been closing in relative terms. This reverses a trend
towards increased global inequality that started in the 1820s
and continued until 1992.” But on 2000-05 growth trends, it
will still take India until 2106 to catch up with high-income

Over the past two decades, India has moved into the “premier
league” of world economic growth. High technology exports are
booming and India’s emerging middle-class consumers have
become a magnet for foreign investors. But the pick-up growth
has not translated into a commensurate decline in poverty.
Improvements in child and infant mortality are slowing. India
is now off-track for these millenium development goals

Some of India’s southern cities may be “in the midst of a
technology boom”. But one out of every 11 Indian children
dies in the first five years of his or her life, due to a
lack of low-technology, low-cost interventions. Malnutrition
has hardly improved in the past decade. It affects half of
India’s children. About one in four girls and one in ten boys
do not attend primary school. Extreme poverty is concentrated
in rural areas of the northern poverty-belt states — Bihar,
MP, UP and West Bengal. Income growth has been most dynamic
in other states, urban areas and the service sectors. Rural
poverty has fallen in some states like Gujarat and Tamil
Nadu. But nationally, rural unemployment is rising,
agricultural input is increasing at least than two percent a
year, agricultural wages are stagnating and the growth is
virtually jobless.

But there’s also bad news globally for the fight against
poverty. UNDP admits that as government prepare for the 2005
UN summit, the overall report card on progress “makes for
depressing reading”. It adds, “The promise to the world’s
poor is being broken.” (ENDS)


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