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Rediff.com  » Business » India, the 1% society

India, the 1% society

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September 11, 2004 13:51 IST

Consider the rate at which things improve in Indian society. The Planning Commission's numbers on the percentage of people below the poverty line showed a drop from 35.4 per cent in 1993 to 26.4 per cent in 2000 -- a 9-percentage-point drop in seven years, or roughly 1.3 percentage points annually.

Or take the literacy rate, which improved from 52 per cent in 1991 to 65 per cent in 2001 -- once again, at the rate of 1.3 per cent of the population every year.

Move to life expectancy, and we see that it improved by 0.7 years annually, moving from 58 in 1991 to 65 a decade later -- which actually works out to about 1.2 per cent on the base.

In short, the average rate at which the key social indicators improve in the country works out to be slightly more than 1 percentage point each year.

This congruence just above the 1 per cent number extends further.

For India's human development index (put together by the UN Development Programme) has gone up by 0.323 points, from 0.254 to 0.577, in the 30 years to 2000, which makes it an annual improvement of almost 1.1 per cent of the potential maximum on the index.

Turn to the UNDP's Gender Development Index, and we see India's rating move up from 0.250 to 0.563 between 1970 and 2000, which too makes it an annual improvement of fractionally more than 1 per cent of the potential maximum.

What is interesting is that this 1 per cent figure seems to hold fairly steady, irrespective of whether the economy is growing rapidly or slowly, whether it was the stagnant decade of the 1970s, or the more rapid period of the 1980s and 1990s.

In that sense, the rate of progress in Indian society seems to be independent of the rate of progress in the economy -- which then begs some obvious questions.

Indeed, there has been some controversy about whether the rate of decline in poverty numbers slowed down or accelerated during the reform years.

If one steers the middle ground in the argument, the conclusion is that the reforms made no difference at all. So while we may no longer have the Hindu rate of economic growth, perhaps we still have a Hindu rate of social change.

What if we were to take this conclusion as a given fact of Indian life, and look ahead? How long will it be before our social indicators yield numbers that we can be proud of as a country?

If the whole of India is to attain Kerala's or Tamil Nadu's current levels of literacy, at the current rate of change it will take us another quarter century.

If we are to attain the best possible life expectancy levels, that too will take a quarter century more. And if we are to attain China's current level of human or gender development, it will take us at least 15 more years.

As for the goal of getting everyone to move over the official poverty line, well, it will take us another quarter century.

What this suggests is that India's (or a slightly different proposition, the majority of Indians') place in the sun will not be attained in the next five or even 10 years, as many economists might suggest.

Because while economic growth might well break out of the 5.7 per cent level that has prevailed now for nearly a quarter-century, the 'tiger economies' usually had better social indices when they took off with a 7-8 per cent economic growth.

In other words, India needs to focus on its social indices if the economic momentum is to be ratcheted up. Among many other things, you need healthy, literate workers if productivity is to improve. For as the population growth rate levels off, it is only productivity gains that will sustain GDP momentum.

The other point to note is that future improvements in the key social indices will depend fundamentally on improving the state of affairs in India's most backward states of Bihar, Orissa, Jharkhand and the like.

This is not impossible: Madhya Pradesh (including what is now Chhattisgarh) showed fairly dramatic improvements in the last census. It boils down then to improving the quality of governance, and the UPA government is therefore talking of all the right issues. The question is, can it deliver?

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