What has India achieved by rejecting the Human Capital Index?
Rather than acknowledge reality and raise questions that elevate the debate on how to develop and measure human capital, the government’s summary rejection has exposed its own small-mindedness and lack of political imaginationUpdated: Oct 24, 2018 14:41 IST
On October 11, the World Bank released the first ‘Human Capital Index’ (HCI). The index is designed to place the spotlight on human capital as the key driver of sustainable growth and poverty reduction. Human capital is defined as productivity measured against a benchmark of complete education and full health. Drawing on five key indicators, including under five mortality rates, quality and quantity of education, adult survival rates and quality of stunting, the index attempts to capture the amount of human capital a child born today could expect to attain by the age of 18.
The HCI awards India the dubious distinction of 115th position out of 157 countries ranked. India beats Pakistan, which ranked 134. But the rest of our neighbourhood, poorer in terms of GDP, has inched ahead. Bangladesh is at 106; Mynamar at 107; and Nepal at 102. I suppose we can take some comfort in knowing it’s a close fight. Sri Lanka tops the charts at 72.
India has summarily rejected HCI. In a statement issued by the ministry of finance, the government expressed “serious reservations about the advisability and utility of the exercise”. Arguing that there are “serious methodological weaknesses”, the government announced, therefore, that it has chosen to “ignore the HCI and will continue to undertake its path-breaking programme for human capital development”.
India is well within its rights to ask difficult questions and critique HCI. Indeed these are global debates that must be had and we should worry if other countries are not asking hard questions of the World Bank. However, in refusing to engage in a dialogue and debating the scale of India’s challenge (frankly, the ranking merely exposes a well-known reality) the government, has achieved little — except to expose its own failings. The tone and tenor of the government’s position and the failure to acknowledge the scale of the challenge India faces offers an important insight into the government’s current mindset and policy focus. This doesn’t bode well for India’s future.
The language adopted to reject the ranking reveals a lack of the political imagination needed to tackle these grand challenges. The HCI, the finance ministry’s statement argues, is flawed because it doesn’t reflect recent initiatives of this government. It goes on to list a medley of schemes that find regular mention in election rallies as key welfare achievements of the National Democratic Alliance — Ujjwala, Swachh Bharat Mission, Aadhaar, the Pradhan Mantri Jan Dhan Yojna, Ayushman Bharat and the Samagra Shiksha Abhiyan. But this medley offers little in terms of a vision or strategy for human capital development.
Early in its tenure, the Modi government made a careful attempt to craft a new narrative of welfare and human development as “empowerment” in opposition to its predecessor, the UPA’s “entitlement” approach. But it never clearly articulated a pathway to empowerment, choosing instead to focus on announcing schemes without joining the dots.
Crucially, the two key pillars of “empowerment” — quality education and health — remained mostly invisible from the NDA’s welfare politics, until the grand announcement of Ayushman Bharat.
On education, this government’s singular achievement, reflected in the finance ministry’s statement, is the launch of the Samagra Shiksha Abhiyan — an administrative coupling of two existing schemes that dealt with elementary and secondary education. There is little here that is different from the past. And certainly has nothing on the real education challenge — improving learning outcomes.
And while Ayushman Bharat is ambitious in scale, given the challenges of implementing a large health insurance scheme in a low-capacity state like India, it remains unclear what impact this might have on the quality of care a patient receives.
The root of the problem lies in the fact that like its predecessor, which rejected the global PISA rankings on learning outcomes, the NDA believes that a business as usual, scheme driven approach that measures progress against inputs and processes — access to cash, schools, hospital, toilets — rather than outcomes — learning quality, stunting rates — is the route to human capital development. This is the reason offered for conveniently accepting the World Bank’s Ease of Business (whose methodology raises as many, if not more, questions than the HCI) where India shows progress — because it measures inputs. It is also why the United Nations’ equally damning, Human Development Index is more acceptable to India.
Yet all the evidence, including the governments’ own data, highlight that business as usual will not lead to change. Rather than acknowledge reality and raise questions that elevate the debate on how to develop and measure human capital, the government’s summary rejection has exposed its own lack of political imagination. Quibbling with the World Bank is not going to ensure that India implements “path-breaking programmes for human development”. This needs a bold, new political imagination.
Yamini Aiyar is president and chief executive, Centre for Policy Research
The views expressed are personal