Three Decades of Human Development across Indian States: Inclusive Growth or Perpetual Disparity?

Three econs look at the question in this NIPFP working paper.

They see a positive relationship between growth and human development policies across states. Though, one sees a higher coefficient in case of rural areas. And the low income countries remain struck in the trap of low growth and low human development:

The importance of strengthening the human development (HD) achievements in a country to augment its growth potential is well known in development literature. Several initiatives to enhance the HD level have been introduced in India in recent past. However, the HD achievements still vary significantly across Indian States. The current paper attempts to observe the HD achievements for 28 Indian States over the last three decades and analyze their influence on growth patterns. The methodology adopted in the National Human Development Report 2001 has been applied for constructing the Human Development Index (HDI) in the current analysis, and the indices for rural and urban areas within each State are calculated separately. The results indicate importance of State-specific HD path and also the presence of high rural–urban disparity.

..Although the Indian economy has witnessed a structural transformation with growing prominence of the service sector in the GDP, the same has been constrained by the fact that potentials in two major components of HD, namely – health and education sector, is still not fully harnessed. Once the HD challenges faced by the economically backward States are adequately met, the healthy and educated population will be able to contribute more significantly in the EG process in a more productive manner. Such growth will not be limited to the service sector but also spread to the agricultural and manufacturing segment as well. Therefore, the positive relationship noticed between EG and HD is heartening, but the continuation of several States at the bottom (e.g. UP, Bihar, Madhya Pradesh, Chhattisgarh etc.) as well as persisting rural-urban disparities, deserve specific policy actions so as to remove any adverse effects caused by the existing vicious cycles there. Otherwise, a classic low-level equilibrium trap would prevail across the States characterized by low and stable EG-HD combinations.

There are suggestions to improve the HD indicators as well which are standard stuff but have to be still reiterated..

Always nice to see state level studies. Just that the paper could have used its table of results a little better.

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