Dr Crawfords bemused reaction must be viewed against the fact that no industrial nation in the world, whether developed or developing, has less than 80 per cent literacy. None. Another senior RAND executive had just asked his Indian interlocutors how India was preparing to catch up with China, which has an adult literacy rate of 83 per cent, and explanations were being offered about what India was doing to get growth going.
Literacy is not a mere statistic that tells you how many can read and write. It is an indicator of human capabilities. It is a measure of a societys ability to convert people from a liability into an asset. Higher the rate of literacy, greater the chances of sustained economic growth and development. Its a correlation that comes through clearly from the National Human Development Report, 2001, published this week by the Planning Commission.
The publication of the NHDR is a vindication of sorts for those economists who have campaigned hard to get policy makers to look at the social dimension of economic development. Economic growth is a necessary but not a sufficient basis for development. Growth combined with human capability building, in terms of educational attainment and well being, is what translates into sustainable development.
This was the pithy if powerful message of the Human Development Reports published since 1989 by the United Nations Development Programme. The South Asian triumvirate of Pakistani economist Mahbub ul Haq and Indian economists Amartya Sen and Sudhir Anand, produced the first and the subsequently refined measures of human development translating qualitative changes in the economy into a composite index called the Human Development Index.
Dr Haqs parentage of this report and the as yet limited popularity in policy making circles of the pre-Nobel Sen ensured that the HDR did not secure official endorsement in India. The UNDP managed to persuade the development-oriented chief minister of Madhya Pradesh, Digvijay Singh, to start the ball rolling with a state-level HDR for MP five years ago. Subsequently several state governments have produced their own HDRs. However, a full twelve years after the UNDP launched its first HDR, the Planning Commission has now come out with a national HDR for India.
The more striking aspect of the report which has received wide media attention is the inter-state disparity. The fact that Bihars HDI of 0.367 in 2001 is way below Keralas 0.638 and Tamilnadus 0.531. This inter-regional variation is not new. For a hundred years the Indian sub-continent has been marked by this regional differentiation with southern and western India ahead of eastern and northern India in terms of a range of economic and social indicators. In fact, this century old regional pattern of development has hardly changed, and if there is some change it is at the margins, like in Madhya Pradesh and Rajasthan.
What is missing in the NHDR is an analysis of why some states have lagged behind and why some have forged ahead. The catch-all phrase of governance tries to say it all but says nothing. Next year the report should delve deeper into emerging inter-regional imbalances for this may well be the biggest challenge for development policy and national politics in years to come.
The good news from NHDR is that the movement of human development indicators across time is a positive one. Literacy has improved, so has longevity and, over the past decade, even per capita income. Improvements in each of the three elements of the HDI has pushed the index up. The geometric patterns mapped out on the development radars, indicating inter-temporal movement in key development indicators, show that between 1981 and 2001 large parts of India have experienced an improvement in economic indicators of development. The progress is more visible in rural areas where the initial base was lower.
Every single state has experienced an improvement in HDI values, there is no regression anywhere. This has meant that at the international level, India is no longer categorised as a low human development country, as most of South Asia is, but as a medium human development country. More to the point, parts of central and northern India are catching up with, even surpassing, the southern states. If Bihar and Uttar Pradesh can learn from West Bengal and Rajasthan, not to mention Tamilnadu and Karnataka, they will start moving ahead, pulling up the national average further.
What stands in the way The NHDR does identify governance, a word with a newly acquired sex appeal in the development discourse, as a key factor. The devolution of power, decentralisation of decision making, civil service reforms, incentives/disincentives that reflect social values and norms, procedural reforms, empowerment of women and the marginalised sections of society are all identified as contingent instruments that have to be deployed in the cause of good governance.
Beyond these bland prescriptions, and the reiteration of the importance of education and the public provision of basic needs to all, the NHDR 2001 does not strike out into any controversial policy territory like land reform and increased public investment in social and economic infrastructure. The report does emphasise the critical importance of increasing the tax/GDP ratio and criticises recourse to competitive populism, warning against unsustainable deficits.
The report could have been made more readable and relevant to the policy maker if it had included more boxes pertaining to some actual case studies of human development across the country to show the laggards how their peers have forged ahead. This would have required a greater academic input than may have been available at Yojana Bhavan. Without this critical element, the report reads too much like a government document, which it of course is, and less like a professional report.