Saturday, February 09, 2008

Article: Social and eonomicdevelopment in India - Demographic perspective

This is a long article that I wrote for publication- read in free time.

As the world sings the saga of India rising, Indians are confounded by the contrasting realities. Everyday as millions of youths chase their dreams in the rapidly growing economy, million more continue to struggle in poverty, illiteracy and ill health. India presents a motley blend of mystery, wonder and despair, which leaves even the experts baffled. The ruling UPA boasts of a 9% growth, and promises 'inclusiveness'; the left on the other hand is vehemently critical of all its measures. The newspapers and the news channels are busy blaming the politicians, praising India Inc and swapping the page-3 news to page 1; the common man is left puzzled while trying to make sense of this chaotic mess.

The question, "How is India doing today?" can be addressed only in relative terms; with respect to its own past and its position in the current world. In a vast country like India, striking regional disparities can be seen due to differences in natural resources, growth rates, initial conditions, political structure and social traditions. Assessing development and tracking its history is imperative to understand the impact of social conditions, politics and public policies on socio-economic development. In this venture, demographic development indicators like poverty level, literacy rate, fertility rate and human development index give us a good measuring stick, through which we can rank our nation on the development ladder.

Poverty level

Poverty level indicates the number of people with low purchasing power and lack of access to basic amenities like drinking water, health care, education etc. The World Bank Development Indicator report (2004) estimates that roughly 1.1bn or 1/6th of the world population lives in extreme poverty, earning less than $1 per day. Majority of the world’s poor live in sub-Saharan Africa, South Asia and East Asia. In India, it is estimated that about 300 million people live below the extreme poverty line. The number of moderately poor is much higher. After Independence, Nehruvian socialist policies had little effect on reducing poverty. From the 1950’s to mid 70’s the poverty level hovered around 50% and showed no clear signs of decline. The 80's showed a significant decline in poverty: about 13% in a decade (see Fig.1). Land reforms, robust agricultural growth and export contributed to this decline, more than Indira's 'Garibi Hatao' rhetoric. Since the reforms in the 90's, economic development has been robust and dramatic, but the poverty levels show only a marginal decline. In fact, there is evidence that poverty actually increased during the early 90's, and it was only after 1998 that there was a clear indication of declining poverty. According to an NSS survey in 2005, about 27% of population lives below poverty line. There is widespread regional disparity in the prevalence of poverty. Punjab has less than 8.4% poor; whereas Orissa, Bihar, UP have 40% or more below the poverty line. Southern states like Karnataka (25%), Tamil Nadu (22.5%) have poverty levels close to the national average of 27%. Continued dependence on agriculture sector, which employs a staggering 60% of the total labor force and contributing only 20% to GDP has been cited as one of the prime reasons for persistent poverty. The jobs created since liberalization have been mainly in the service sector, giving little scope for the millions of illiterate or semi-literate population to reap the benefits of an open economy. Recent public initiatives like NREGS (National Rural Employment Guarantee Scheme) and Food for Work are attempts to reduce poverty by using the unemployed to build rural infrastructure. There is mixed evidence for the effectiveness of these schemes. Long-term poverty reduction strategies should focus on making growth more inclusive through massive investment in human capital and creating opportunities to tap the human resources there in.

Fig. 1: Poverty rate in India
Source: Central Statistical Organization, Ministry of Statistics and Program Implementation, Government of India.

Literacy and Education level

Literacy rate measures the human capital (i.e. productive skills and knowledge) of the population. More literate population generally shows lower birthrate per woman, lesser infant mortality and has better access to economic activities. The performance of India in educating its population has been poor compared to many countries of the world. In 2001 world literacy averaged to 80%, while India remained far below the average at 66%. The literacy growth in India has been steady but slow. Back in the 50's, the literacy rate was just above 18%, and since then we have seen roughly an increase of 10% per decade, with the highest 13% increase in the 90's (see Fig. 2). Constitutionally the states bear the major responsibility of elementary education. Large regional disparities in literacy and learning levels reflect the poor efficacy of many state educational policies. Kerala stands apart with more than 90% literate population, which is largely a result of mass campaigns by people and political action termed as the ‘Kerala model’. States like Bihar, Rajasthan and UP hover around 55%. Surprisingly, the economically better performing states like Karnataka and Andhra Pradesh have a literacy rate just above the national average. One of the prime drivers of human development is Female literacy. A literate female invariably takes care of her child’s health, nutritional and educational needs. Higher female literacy has been linked to decreased infant and maternal mortality rates, as well as a decrease in the spread of sexually transmitted diseases, including AIDS.

Female literacy was dismally low till the 80's. It increased rapidly from 18% in 1981 to 38% in 1995. Hindi speaking states have shown greater gender disparity and correspondingly lower human development. Failure of states in addressing the educational access problem necessitated central intervention, and in 1976 a constitutional amendment was brought to make education a concurrent subject - i.e. a joint responsibility of state and central government. Some of the major central initiatives like partial implementation of Kothari commission report (1964), National Policy on Education (1986) etc have met with limited success. In 2000, Sarva Shiksha Abhyan (SSA) was launched by the NDA government with the objective of achieving Universal Elementary Education by 2010. Along with SSA, the Mid-day meal scheme was introduced nationwide in 2001. All these helped to substantially increase the enrollment in primary schools to 94% (Pratham ASER survey, 2005). The current trend shows that ensuring access to school for all is within reach and India is poised to achieve complete literacy by 2030. But the story is not complete; the Nationwide ASER survey also showed that the learning level of children is dismally poor in many states. About two-thirds of the students aged between 7-14 couldn’t read a story at grade 2 level, and about 40% of them couldn’t do basic subtraction and division. Drop out rates at primary schools still remain high. Another surprising finding is that children in some states with high enrollment like Tamil Nadu and Karnataka had very poor learning levels. The situation calls for shifting policy focus from access and enrollment to attainment and retention, to ensure that all the children enrolled learn well and complete their primary education.

Fig 2: Growth of literacy rates in India from 1950 to 2001.

Fertility rate and population growth:

Ever since Independence, population growth has been recognized as one of the major obstacles in the path of India’s development. Our population has increased three-folds from 360 million in 1951 to 1 billion plus in 2001. The population density of India is one of the highest in the world. One of the prime factors determining the population growth is the average number of children a woman bears in her lifetime - termed as the Total Fertility Rate (TFR). The population will begin to stabilize if the TFR reaches below the replacement level of 2.1. However for the population to decline in numbers, it generally takes 25-30 years after reaching replacement level. Most of the developed countries have a fertility rate at or below the replacement; some countries, especially the European ones are experiencing negative population growth. According to UN estimates (2007), the world TFR is about 2.62, while India with a TFR of 2.82 is slightly above the world average.

India has had the one of the oldest family planning programs among developing countries. After Independence, India has made significant progress in reducing the fertility rate. In 1950, on an average 6 children were born per woman, as compared to 2.8 in 2007. If the current decline continues, India will most probably reach replacement level by 2020. In spite of this decline, India performs relatively poor with respect to countries with a similar history of population growth, like China, South Korea, Sri Lanka, Brazil etc. In these countries, population policies, coercive or otherwise succeeded in bringing down birth rates dramatically over the past 50 years. The task is certainly harder in India, especially with social taboos on sexuality and a lack of openness about sexual and reproductive health. Widespread resistance to sex education at school level has an adverse impact on the reproductive choices exercised by women.

There is astounding regional diversity within India with regard to birth rate. Many southern states, especially Kerala (1.7) and Tamil Nadu (1.8) have performed well in controlling their fertility rate. Some states like Karnataka, Maharashtra, Punjab, and AP are on the verge of reaching replacement level. The BIMARU (Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh) states strikingly show very high birth rates, with all of them above 4 (see Fig. 3). These states also lag behind in female literacy, which is the key driver in reducing the fertility rate. The situation calls for greater focus in the Hindi-speaking belt by spreading awareness about family planning and reproductive health, sex education etc. In this venture there is more to learn from within the country than outside.

Fig 3: Total Fertility Rate distribution in India in 2001, darker Areas represent greater TFR. Source:

Life Expectancy and Health

The healthier a person is, the longer he or she lives. The average Life expectancy of population of indicates the physical health conditions of the people. Wealthier population can afford private medical care and generally live longer, while the longevity of poor crucially depends on conditions of public health, nutrition and sanitation services. Developed countries in Europe, North America and Australia have a Life Expectancy at Birth (LEB) of over 75 years, whereas the poorest countries in Sub Saharan Africa have a life expectancy of less than 45 years. India, China and most Asian countries have seen a dramatic increase in LEB after the 1950’s. In the late 1940's, on an average Indians used to live for 33 years. We then had a steady increase in life expectancy to 65 years in 2001 (see Fig 4). Elimination of small pox, and a sharp reduction in deaths due to Cholera and Malaria contributed to this increase in LEB. States now show relatively less variation in life expectancy; Bihar (61yrs) slightly lags behind Maharashtra (66 yrs), even Madhya Pradesh (57 yrs) with the lowest LEB among Indian states is not too far behind. Swaminathan Iyer argues, “increased longevity has been the greatest single benefit to Indian citizens since independence, a benefit spread across all states and income levels”. A word of caution has to be exercised before generalizing an increase in longevity to excellent public health. There are many other indicators of public health like Infant mortality, maternal mortality and malnutrition, in which India lags behind even some developing countries. In the name of structural adjustments, the government spending on public health has in fact decreased after the Economic liberalization. With a mere 1% of GDP allocation, India’s public health spending is among the lowest in the world. There are only 40 doctors per 10,000 people in India, where as in United States, it is as high as 2300. The scarcity of doctors can be addressed if we allow greater private participation in setting up medical colleges and hospitals. Only when we address these issues can we hope that our people will be healthier while the country is getting wealthier.

Fig 4. Life Expectancy of Indian’s from 1941-2001
Source: Registrar General of India (2003) SRS Based Abridged Life Tables.

Human Development Index

The inaugural UN-Human Development Report (1990) notes, "Physical expansion of economy, as measured by per capita GDP, does not necessarily mean that people are better off in the larger sense of the term, especially with regard to health, freedom, education and leisure time. People are the real wealth of a nation." Many countries in the world have shown good social development in spite of relatively poor economic conditions; for India the opposite appears to be true. To measure the quality of life, Amartya Sen and Mahbub-ul-Haq in the early 90's came up with a composite index called the Human Development Index (HDI). HDI (a number between 0 and 1) is based on a combination of factors like literacy, education level, life expectancy and per capita income. Countries with HDI greater than 0.8 are typically considered developed countries, 0.5 or below indicate an underdeveloped country. India has an average HDI of 0.63 (medium) and ranks 127 in the world according to the UNDP report-2005. India's high GDP growth contrasts with the poor human development indicating a failure at the social front. Achievements in literacy, access to public health and gender equality are far from impressive. The UNDP report adds, “Pervasive gender inequalities, interacting with rural poverty and inequalities among states are undermining the growth into human development." Regional disparities are clearly reflected in the varying degree of Human development. With an HDI of 0.85, Kerala is comparable to some European countries in quality of life, and presents a paradox of high social growth and poor economic growth. Contrastingly, some economically progressive states like Karnataka and AP have fared only moderately in this measure. BIMARU states rank at the bottom in state rankings of HDI. India’s failure in raising human development reflects the myopic vision of political leaders and policy makers; to them per capita growth has overshadowed the need for equity and inclusiveness. The ICDS (Integrated Child Development Scheme), considered the largest nutritional program in the world, has failed to deliver due to poor governance and rampant corruption. Public schools in many states are unsuccessful in checking high drop out rates and the ever-prevalent teacher absenteeism. Hardly 40% of the grains under the PDS (Public Distribution System) ever reach the people below poverty line (BPL). The ‘exclusion error’ and ‘distribution error’ in PDS are so high that it is considered one of most inefficient ways of income transfer to the poor. All these inefficiencies and inadequacies are reflected in the HDI.

Comparative study- India, China and South Korea

Before the 1950's more than two thirds of the humanity was poor. The problem area of the world was Asia, which had most of the world’s poor. The second half of the twentieth century saw dramatic changes in the demographic profile of the world. Many eastern countries emerged as economic giants, marked by the rise of Asian tigers in the 1960's and China’s reforms in 1978; where as India's liberalization in the early 90's is relatively recently. On the social front most of the East Asian countries have shown tremendous progress, reducing poverty increasing health and wealth of people. It is insightful to compare the India's journey through development with other Asian countries such as China and South Korea.

At the end of the world war-II (1945), the education and health status of people in these countries (India, China, South Korea) were similar. The literacy rates at 18%, 20% and 22% respectively, were comparable. During the fifties and sixties, South Korea massively invested in education; literacy grew at an unprecedented rate to 87% by 1970. This phenomenal rise in human capital coincided with the onset of economic boom pioneered by Gen. Park Chung-hee in early 1961-62. Consequently Korea saw a dramatic reduction in poverty over the next two decades. By the late 80's Koreans were no longer considered third world citizens.

China comes closest to India in terms of history and population. In the 1950's, beginning of the Mao era, China was socially and economically very backward. Although Mao has been criticized for his whimsical socio-political policies, his leadership saw high growth in the health and education sectors. Life expectancy and literacy rates rapidly improved during his regime. The controversial coercive 'one child policy' helped reduce the fertility rate significantly. In the late 70's, when Deng Xio Ping opened up markets, China was sufficiently advanced in its social indicators. People from all sections of society could reap the benefits of the opening of the economy. Manufacturing-led growth generated enormous wealth and employment; consequently over the next twenty years, China saw one of the most dramatic declines of poverty in history, lifting about 300 million people above the poverty level. The current HDI of China stands at 0.75 - very close to that of the developed nations. Experiences in these countries shows that participatory growth was largely led by the presence of good social infrastructure and human capital before the opening of markets.

In contrast, India showed a relatively slow and sluggish growth in the social sector before opening of the markets in 90's. With a literacy rate of just 55% and an HDI of 0.51, India was just above the margin of an underdeveloped country. The liberalization and globalization of the economy created enormous opportunities for the educated masses hailing mainly from middle class families; most of the people at the bottom layer were left completely untouched by the wave of liberalization. This growth didn't create the manufacturing or service jobs accessible to an illiterate/semi-literate rural population. Over the years that followed, poverty levels didn't show any drastic reduction. India’s HDI has increased slowly, but not at a rate commensurate with the per capita income growth.


The failure at the social front in the era of liberalization has been reflected with increased inequality and social unrest. While the GDP growth is absolutely essential, it should be seen more in terms of hitherto unseen social opportunities. To achieve inclusive and participatory growth, public policies should focus on substantial investment in human capital, ensure their efficient delivery through good governance and create opportunities for economic participation by all sections. The lessons learnt from the journey through our own past, and that of the world, tell us much about the road ahead in realizing the VISION 2020 of a developed India.

About the writer:
The author is a doctoral student in Physics at the Pennsylvania State University, PA, USA. He is also pursuing 'Minor' in Public Policy and Demography, with works focused on Education Policy. Jolad's details may be seen at:


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