Banks, especially the Public Sector Banks have to play an important role in the pandemic afflicted economy. With that aim, the government has been envisaging the Bank Investment Company (BIC) for the improvement of PSB governance. The article discusses the issues with the BIC.
Background of the BIC
Recent reports suggest that the upcoming budget may include proposals for a Bank Investment Company (BIC), anchoring the government’s shareholding in its banks.
The BIC was proposed by the P J Nayak Committee constituted by the RBI in 2014 to examine governance at public and private sector banks.
The committee had offered two options — privatisation or a complete overhaul of bank governance.
The overhaul of bank governance is envisaged in the form of a gradual disassociation of the government from the operations, management and governance of PSBs.
The BIC is a welcome step in as much as it signals the government’s intent to pursue reforms to improve the governance and performance of PSBs.
Concerns with the BIC
The ownership and governance of the BIC itself will be crucial.
BIC will need to be allowed to garner the requisite talent and expertise and operate with freedom.
In the absence of this, it would merely add another layer while preserving the status quo.
The less than encouraging experience of the Banks Board Bureau (BBB) that was to precede the BIC is instructive.
Why BBB failed to achieve its objectives
The BBB was set up in 2016 to advise on the selection and appointment of senior board members and management.
However, in practice, the BBB’s advice has not always been heeded to, and appointments have not always been made on time.
The BBB, as originally conceived, was to consist of three senior bankers.
However, it was expanded to include representatives from the RBI and the government.
The BBB was also originally envisaged by the committee as a temporary arrangement.
However, no further steps have been forthcoming after its establishment.
Way forward for BIC
The government would need to ensure the necessary freedom for the BIC to operate while circumscribing its own role.
The ultimate success of these reforms will depend on how the government disassociates itself and empowers the BIC.
The objectives of the BIC would have to be clearly defined too.
If capital raising is one of the goals, the structure of a holding company — with a portfolio of comparatively better performing and non-performing banks — to attract investments must be assessed.
In this regard, the RBI has reportedly, in the past, expressed reservations on the BIC structure being a potential challenge for investors to assess the relative risks, returns and performance of the banks.
This raises the question of whether privatisation would not be a better alternative, particularly as the transition of the government from an owner to a pure financial investor in its banks is likely to take time.
Conclusion
Given these concerns, privatisation may be a better alternative. The budget could signal this intent by announcing the first step — the repeal of the Bank Nationalisation Acts and the State Bank of India Act.
The first Decimate Prelims Open(free) Test 2021 will be live tomorrow. – 17th Jan. Three free Tests, have been scheduled on 17th Jan, 24th Jan, and 31st Jan 2021, before the start of our DECIMATE PRELIMS 2021 program.
The first test will go live at 10 am on 17th Jan 2021 (on the same link as given in point 1).
Other details:
These are full-length tests- 100 questions, 2hrs
Mode- Online, in English
What to do after the test?
Take some rest. Test solutions and explanations will be emailed to you as soon as you submit the test. All India Ranking will be released on 18th Jan.
Quickly go through the solutions. Join us on this (click) Habitat group for the discussions and for doubts. We’ll discuss on how to proceed from there.
It is a holistically designed crash course for the UPSC IAS prelims exam. To make it more efficient and outcome-oriented we’ve integrated it with Habitat.
Decimate Prelims 2021 @ Habitat is a three-phased program that ensures full coverage of current affairs syllabus, related static parts, tests, intensive discussions, and revision.
We’re going more intensive and comprehensive to make sure that you comfortably go beyond 130+ marks and literally decimate prelims.
UPSC is evolving, are you? Bury the old ways of IAS Prelims preparation.
How daily Habitat classes will be held?
Since we’re going to be comprehensive and effective, we’ve planned Habitat classes twice a day (2+2 hrs/day) as per a schedule.
Forenoon session: 10am – 12:30pm
You’ll be provided with the base notes and reading material beforehand. In the Habitat class the focus will be on:
Explanation and conceptual clarity.
Making linkages with static part.
Relevance of the topic or its components for the prelims exam.
The kind of questions that could be asked from a particular topic.
Things you need to focus on and the things you can avoid.
You’ll get a video summary lecture of this discussion covering the most important and relevant aspects of the topic.
A discussion session on Habitat
Evening session: 7pm – 9pm
In the second session, we’ll be focussing on the application and utilization of the information part:
Doubts resolution
Daily mini-tests (MCQs) based on day’s discussions
Explanation, discussion, and Tikdams
Revision of the day’s topics
After this session, you’ll be provided with the PDFs of mini-tests, notes for the next session, and reference material (if required).
Habitat sessions will continue till Prelims 2021 in the next two phases as well.
MCQ discussion on Habitat
Decimate Prelims 2021 progression
Phase 1: Course coverage- 7 weeks
In the first 50 days, we are going to cover 2+ yrs current affairs, associated static topics, and prelims worthy issues. These will be covered in 4+ hours daily classes on Habitat.
1. Notes and Habitat video lectures
Crisp but comprehensive notes are going to cover these current affairs on a preliminary level. These will be followed by discussion sessions on Habitat.
2. Daily Habitat classes
Habitat classes will be conducted by the subject-specific mentors twice a day. Here in the first session, you’ll be having an in-depth discussion and analysis of the scheduled topics. Why a particular topic is important and how it could be asked in prelims will be discussed. In the second session of Habitat class, you’ll be attempting MCQs, resolving doubts, and revising.
By the end of the discussion, you will be provided with video summary lectures, MCQs, mindmaps, and reference material, etc.
Phase 2: Tests and Assessment, Discussion, Tikdams- Till May
In the second phase of Decimate Prelims 2021, we’re going to focus on the application of information; testing and evaluation; doubts resolution and course correction; and learning smart ways of attempting the paper through Tikdams sessions.
1. Test series and discussions
Since learning must be accompanied by regular assessment, Decimate Prelims includes 8 Full-Length tests, 10 Current affairs tests, and 4 CSAT tests. These are high-quality tests covering the most relevant issues for IAS prelims 2021.
Tests will be followed by discussion and analysis on Habitat will help in finding out the mistakes you are committing to and how to address them in a most effective manner.
2. Tikdams and Score boosting sessions
We’ve perfected Tikdams or the art of intelligent elimination. It has the potential of raising your score by 30 marks or more. Score boosting sessions, in this phase, will prepare you and enhance your ability to perform under pressure (& lack of information).
3. Revision and discussion
We’re going to have scheduled revision and doubt resolution sessions on Habitat. These 4+hrs sessions will ensure thorough coverage of the IAS Prelims syllabus.
Phase 3: Probable questions discussion, intensive revision – till prelims
We’ll be providing 300+ most probable topics to you and will be having a discussion session on Habitat around these topics.
Moreover, intensive revision based on listicles, reports, and important topics will continue till your prelims.
Mentorship
Mentorship is an important component of Decimate Prelims 2021. It is essential for guiding your preparation towards the most effective path so that you can make the most out of this program.
On Habitat, you will get mentorship by subject-specific mentors and teachers. You can reach out to them whenever you want and get your doubts resolved as soon as you get them.
Notes and study material
As mentioned above high-quality PDF notes of current affairs, daily MCQs, discussion summaries, etc. are going to be provided. You’ll also be getting an annual subscription to Civils Digest, our monthly magazine.
Other reference material, listicles, etc. will be provided as and when required.
It is a holistically designed crash course for the UPSC IAS prelims exam. To make it more efficient and outcome-oriented we’ve integrated it with Habitat.
Decimate Prelims 2021 @ Habitat is a three-phased program that ensures full coverage of current affairs syllabus, related static parts, tests, intensive discussions, and revision.
We’re going more intensive and comprehensive to make sure that you comfortably go beyond 130+ marks and literally decimate prelims.
UPSC is evolving, are you? Bury the old ways of IAS Prelims preparation.
How daily Habitat classes will be held?
Since we’re going to be comprehensive and effective, we’ve planned Habitat classes twice a day (2+2 hrs/day) as per a schedule.
Forenoon session: 10am – 12:30pm
You’ll be provided with the base notes and reading material beforehand. In the Habitat class the focus will be on:
Explanation and conceptual clarity.
Making linkages with static part.
Relevance of the topic or its components for the prelims exam.
The kind of questions that could be asked from a particular topic.
Things you need to focus on and the things you can avoid.
You’ll get a video summary lecture of this discussion covering the most important and relevant aspects of the topic.
A discussion session on Habitat
Evening session: 7pm – 9pm
In the second session, we’ll be focussing on the application and utilization of the information part:
Doubts resolution
Daily mini-tests (MCQs) based on day’s discussions
Explanation, discussion, and Tikdams
Revision of the day’s topics
After this session, you’ll be provided with the PDFs of mini-tests, notes for the next session, and reference material (if required).
Habitat sessions will continue till Prelims 2021 in the next two phases as well.
MCQ discussion on Habitat
Decimate Prelims 2021 progression
Phase 1: Course coverage- 7 weeks
In the first 50 days, we are going to cover 2+ yrs current affairs, associated static topics, and prelims worthy issues. These will be covered in 4+ hours daily classes on Habitat.
1. Notes and Habitat video lectures
Crisp but comprehensive notes are going to cover these current affairs on a preliminary level. These will be followed by discussion sessions on Habitat.
2. Daily Habitat classes
Habitat classes will be conducted by the subject-specific mentors twice a day. Here in the first session, you’ll be having an in-depth discussion and analysis of the scheduled topics. Why a particular topic is important and how it could be asked in prelims will be discussed. In the second session of Habitat class, you’ll be attempting MCQs, resolving doubts, and revising.
By the end of the discussion, you will be provided with video summary lectures, MCQs, mindmaps, and reference material, etc.
Phase 2: Tests and Assessment, Discussion, Tikdams- Till May
In the second phase of Decimate Prelims 2021, we’re going to focus on the application of information; testing and evaluation; doubts resolution and course correction; and learning smart ways of attempting the paper through Tikdams sessions.
1. Test series and discussions
Since learning must be accompanied by regular assessment, Decimate Prelims includes 8 Full-Length tests, 10 Current affairs tests, and 4 CSAT tests. These are high-quality tests covering the most relevant issues for IAS prelims 2021.
Tests will be followed by discussion and analysis on Habitat will help in finding out the mistakes you are committing to and how to address them in a most effective manner.
2. Tikdams and Score boosting sessions
We’ve perfected Tikdams or the art of intelligent elimination. It has the potential of raising your score by 30 marks or more. Score boosting sessions, in this phase, will prepare you and enhance your ability to perform under pressure (& lack of information).
3. Revision and discussion
We’re going to have scheduled revision and doubt resolution sessions on Habitat. These 4+hrs sessions will ensure thorough coverage of the IAS Prelims syllabus.
Phase 3: Probable questions discussion, intensive revision – till prelims
We’ll be providing 300+ most probable topics to you and will be having a discussion session on Habitat around these topics.
Moreover, intensive revision based on listicles, reports, and important topics will continue till your prelims.
Mentorship
Mentorship is an important component of Decimate Prelims 2021. It is essential for guiding your preparation towards the most effective path so that you can make the most out of this program.
On Habitat, you will get mentorship by subject-specific mentors and teachers. You can reach out to them whenever you want and get your doubts resolved as soon as you get them.
Notes and study material
As mentioned above high-quality PDF notes of current affairs, daily MCQs, discussion summaries, etc. are going to be provided. You’ll also be getting an annual subscription to Civils Digest, our monthly magazine.
Other reference material, listicles, etc. will be provided as and when required.
The article highlights the issues with the criteria applied by the UGC to evaluate the faculty research.
Impact of UGC standardisation on social sciences and humanities research
UGC has been the regulatory body responsible for maintaining standards in higher education, while addressing challenges of globalisation.
Processes of UGC mandated standardisation have in particular impacted social sciences and humanities research in Indian universities.
Over the years, UGC has linked institutional funding to ranking and accreditation systems like NAAC and NIRF.
In order to evaluate institutions, these bodies have evolved criteria, which rank universities based on faculty research measured by citations in global journal databases like SCOPUS.
In comparison, importance granted to research outputs like books or other forms is declining.
Issues with the criteria
The insistence of publication in journals fails to distinguish between the varied trajectory of disciplines.
While in STEM (Science, Technology, Engineering, Management) disciplines, research is often highly objective and quantified.
In social sciences and humanities research is subjective, analytical and argumentative.
In disciplines like history, sociology, politics, philosophy, psychology and literature, researchers spend years writing books that engage with ideas in complex ways.
In devaluing books as authentic forms of research, UGC does major disservice to scholars of social sciences and humanities.
Due to emphasis on publication, teachers spend most of their productive time writing articles and getting them published, thereby missing out on quality engagement with pedagogy and research.
Issues with the process of peer review
The process of peer review itself is subjective, and depends upon the knowledge, inclination and availability of time of the particular reviewer.
It is often quite challenging for scholars to meet peer-review standards of A-listed journals.
This has actually required the UGC to expand its own list, ending up including and subsequently deleting a large number of locally published journals.
Issue of inaccessibility
Publication of research in paywalled journal databases makes research inaccessible for students as universities continue to cut down library budgets.
Students and teachers, access articles through pirated sites like Libgen and Scihub, prone to be shut down at any point of time as evident from the litigations.
Clearly, access to knowledge is structurally made inequitable in favour of the elite and/or moneyed institutions and their constituents.
Way forward
The above arguments maintain for the possible multiplicity that can emerge as the end-result of research.
Interdisciplinary and practice-based research can throw up social and ecological experiments, artworks and performances, and numerous new outcomes yet to be conceived as research outputs.
While the UGC hopes to raise the standards to global levels, precarity of employment, longer teaching hours, a dismal student-teacher ratio, lack of sabbaticals, research and travel grants, access to research facilities and office space, adversely impact the research potential of teachers.
Regulating research needs to be replaced with facilitating research, allowing minds to think and gestate.
Regulations without facilitation will merely bureaucratise the governance of knowledge without generating any pathbreaking insights.
Conclusion
The UGC needs to widen its criteria which values publication of a book as much as a research paper in the mandated journal to widen the research in social sciences and humanities.
Russia has announced that it was pulling out of the Open Skies Treaty, saying that the pact had been seriously compromised by the withdrawal of the United States.
The New START, INF and now the OST …. Be clear about the differences of these treaties. For example- to check if their inception was during cold war era etc.
Open Skies Treaty (OST)
OST is an agreement that allows countries to monitor signatories’ arms development by conducting surveillance flights over each other’s territories.
The idea behind the OST was first proposed in the early years of the Cold War by former U.S. President Dwight Eisenhower.
It came to existence decades later and was signed in 1992, during the George H.W. Bush presidency and after the Soviet Union had collapsed.
The OST came into effect in 2002 under the George W. Bush administration and it allows its 34 signatories to conduct unarmed reconnaissance flights over the territory of treaty countries.
Issues with the OST
The U.S. has used the treaty more intensively than Russia.
Between 2002 and 2016, the U.S. flew 196 flights over Russia (in addition to having imagery from other countries) compared to the 71 flights flown by Russia.
Nepal has raised the Kalapani boundary dispute with India during the Joint Commission meeting of the Foreign Ministers.
Q.The India-Nepal bilateral relations these days are increasingly seen through the lens of China factor. Examine.
Kalapani Boundary Issue
Mapped within Uttarakhand is a 372-sq km area called Kalapani, bordering far-west Nepal and Tibet.
A treaty signed between Nepal and British India in 1816 determined the Makhali river, that runs through Kalapani, as the boundary between the two neighbours.
The Treaty of Sugauli concluded between British India and the Kingdom of Nepal in the year 1816, maps the Makhali River as the western boundary with India.
But different British maps showed the source of the tributary at different places which were mainly due to underdeveloped and less-defined surveying techniques used at that time.
However, the river has many tributaries that meet at Kalapani. For this reason, India claims that the river begins at Kalapani but Nepal says that it begins from Lipu Lekh pass, which is the source of most of its tributaries.
While the Nepal government and political parties have protested, India has said the new map does not revise the existing boundary with Nepal.
India claims that the river begins at Kalapani but Nepal says that it begins from Lipu Lekh pass, which is the source of most of its tributaries.
Legal Dimension of Issue
According to International Laws, the principles of avulsion and accretion are applicable in determining the borders when a boundary river changes course.
Avulsion: It is the pushing back of the shoreline by sudden, violent action of the elements, perceptible while in progress. Also, it can be defined as the sudden and perceptible change in the land brought about by water, which may result in the addition or removal of land from a bank or shoreline.
Accretion: It is the process of growth or enlargement by a gradual buildup. It is the natural, slow and gradual deposit of soil by the water.
If the change of the river course is rapid – by avulsion – the boundary does not change. But if the river changes course gradually – that is, by accretion – the boundary changes accordingly.
Since, the Gandak change, of course, has been gradual, India claimed Susta as part of their territory as per international laws.
On several occasions, India has tried to resolve the issue through friendly and peaceful negotiations, but the Nepali leadership has always shown hesitation in resolving the issue.
In Nepal, the issue has become a tool for arousing strong public sentiment against India. Therefore, resolving the issue may not be in the best interest of Nepal’s domestic politics.
Significance for India
The Lipu Lekh pass serves strategic importance for India as a key point to monitor Chinese troop movement.
The link road via Lipulekh Himalayan Pass is also considered one of the shortest and most feasible trade routes between India and China.
The Nepalese reaction would probably have triggered in response to Chinese assertion.
An undefined boundary claimed by Nepal
Nepal’s western boundary with India was marked out in the Treaty of Sugauli between the East India Company and Nepal in 1816.
Nepali authorities claim that people living in the low-density area were included in the Census of Nepal until 58 years ago.
Five years ago, Nepali Foreign Minister had claimed that the late King Mahendra “handed over the territory to India”.
By some accounts in Nepal, this allegedly took place in the wake of India-China War of 1962.
India’s trade with China last year fell to the lowest since 2017, with the trade imbalance declining to a five-year low on the back of a slump in India’s imports from China.
Try this PYQ:
Q.Among the following, which one is the largest exporter of rice in the world in the last five years? (CSP 2019)
(a) China
(b) India
(c) Myanmar
(d) Vietnam
India-China Trade
Two-way trade in 2020 reached $87.6 billion, down by 5.6%, according to new figures from China’s General Administration of Customs (GAC).
India’s imports from China accounted for $66.7 billion, declining by 10.8% year-on-year and the lowest figure since 2016.
It, however, rose to the highest figure on record, for the first time crossing the $20 billion-mark and growing 16% last year to $20.86 billion.
What constitutes India’s import from China?
While there was no immediate break-up of the data in 2020, India’s biggest import in 2019 was electrical machinery and equipment, worth $20.17 billion.
Other major imports in 2019 were organic chemicals ($8.39 billion) and fertilizers ($1.67 billion), while India’s top exports were iron ore, organic chemicals, cotton and unfinished diamonds.
India’s exports to China
The past 12 months saw a surge in demand for iron ore in China with a slew of new infrastructure projects aimed at reviving growth after the COVID-19 slump.
China’s total iron ore imports were up 9.5 per cent in 2020.
A friction-induced low
The trade deficit, a source of friction between India and China, declined to a five year-low of $45.8 billion, the lowest since 2015.
Whether 2020 is an exception or marks a turn away from the recent pattern of India’s trade with China remains to be seen.
While India’s imports from China declined, so did India’s imports overall with a slump in domestic demand last year.
There is, as yet, no evidence to suggest India has replaced its import dependence on China by either sourcing those goods elsewhere or manufacturing them at home.
The Prime Minister has extended his venerations to Thiruvalluvar on the Thiruvalluvar Day.
Read everything about Sangam Literature from your basic sources.
Who was Thiruvalluvar?
Thiruvalluvar is fondly referred to as Valluvar by Tamils was born during 4th -5th century CE.
His ‘Thirukkural’, a collection of 1,330 couplets (‘kurals’ in Tamil), are an essential part of every Tamil household.
It holds importance in the same way the Bhagavad Gita or the Ramayana are in traditional North Indian Hindu households.
Thiruvalluvar is revered as an ancient saint, poet, and a philosopher by Tamils, irrespective of their religion.
He is an essential anchor for Tamils in tracing their cultural roots; Tamils are taught to learn his couplets word-for-word and to follow his teachings in their day-to-day living.
The Ministry of Skill Development and Entrepreneurship (MSDE) has launched Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 3.0.
Note the differences between all three versions of PMKVY.
PMKVY 3.0
PMKVY 3.0 envisages training of eight lakh candidates over the scheme period of 2020-2021.
This phase three will focus on new-age and COVID-related skills.
The 729 PM Kaushal Kendras (PMKKs), empanelled non-PMKK training centres and more than 200 industrial training institutes under Skill India will be rolling out under it.
On the basis of the learning gained from PMKVY 1.0 and PMKVY 2.0, the MSDE has improved the newer version of the scheme to match the current policy doctrine and energize the skilling ecosystem.
Implementation
PMKVY 3.0 will be implemented in a more decentralized structure with greater responsibilities and support from States/UTs and Districts.
District Skill Committees (DSCs), under the guidance of State Skill Development Missions (SSDM), shall play a key role in addressing the skill gap and assessing demand at the district level.
The new scheme will be more trainee- and learner-centric addressing the ambitions of aspirational Bharat.
PMKVY 2.0 broadened the skill development with the inclusion of Recognition of Prior Learning (RPL) and focus on training.
With the advent of PMKVY 3.0, the focus is on bridging the demand-supply gap by promoting skill development in areas of new-age and Industry 4.0 job roles.
Back2Basics: PMKVY 1.0
PMKVY is a skill development initiative scheme of the Government of India for recognition and standardization of skills launched on16 July 2015;.
The aim of the scheme is to encourage aptitude towards employable skills and to increase the working efficiency of probable and existing daily wage earners, by giving monetary awards and rewards and by providing quality training to them.
For this qualification plans and quality, plans have been developed by various Sector Skill Councils (SSC) created with the participation of Industries.
National Skill Development Council (NSDC) has been made coordinating and driving agency for the same.
This December, we commemorated the 30th anniversary of the HDI.
Out of 189 countries, India has ranked 131 on the Human Development Index 2020 prepared by the United Nations Development Programme (UNDP). With an HDI value of 0.645, the country fell in the medium human development category.
People are the real wealth of a nation. The basic objective of development should be to create an enabling environment for people to live long, healthy and creative lives. This may appear to be a simple truth.
Background
The human quest for knowledge has been sustained by an unspoken assumption: that the answers to life’s questions can be found if we try hard enough.
And when we do, we will be able to reorganize society in rational ways, free from superstition, dogma, and oppression.
Yet, the ideas that liberate one generation become the shackles of the next. It is the relentless march of ideas that add to the beauty, sense and the meaning of life.
One such simple, but the transformational idea was the Human Development Index (HDI) as a measure of progress.
The Human Development Index
The HDI combines indicators of life expectancy, education or access to knowledge and income or standard of living, and captures the level and changes to the quality of life.
The index initially launched as an alternative measure to the gross domestic product, is the making of two acclaimed economists from Pakistan and India, namely Mahbub ul Haq and Amartya Sen.
It stresses the centrality of human development in the growth process and was first rolled out by the United Nations Development Programme in 1990.
Dimensions of the Human Development Index
The idea that progress should be conceived as a process of enlarging people’s choices and enhancing their capabilities is the central premise of the HDI.
Since its launch, the HDI has been an important marker of attempts to broaden measures of progress. The HDI considers three main dimensions to evaluate the development of a country:
1. Long and healthy life
The long and healthy life dimension is measured by life expectancy at birth. The life expectancy at birth is a statistical measure that an average individual is expected to live based on certain demographic factors such as the year of birth and current age.
2. Education
This is a second dimension in the HDI. The indicators of education are the expected years of schooling and the mean years of schooling. According to the UN, the average maximum years of schooling is 18 years, while the mean maximum years of schooling is 15 years.
3. Standard of living
The standard of living is usually measured by the gross national income (GNI) per capita. The GNI indicates the total domestic and foreign output created by the residents of a certain country.
Major highlights of the 2020 Report
Out of 189 countries, Norway, Ireland and Switzerland are in the top three rungs.
The size of economic resources, as usual, has been a key factor affecting human development; the distribution and allocation of these resources also play a major role in determining the level of human development.
The 2019 HDI ranks India with a per capita income of $6,681 in the 131st position, a notch lower than its 130th rank in 2018, which puts it in the medium human development category.
What India has achieved over the years?
The report stated that since 1990, the HDI value of India has increased to 0.645 from 0.429, registering an increase of over 50%.
During the same period, the life expectancy at birth in India rose by nearly 12 years, while mean years of schooling witnessed an increase of 3.5 years.
During this while, the expected years of schooling also rose by 4.5 years.
Moreover, during this period, GNI per capita of India also increased, registering a rise of nearly 274%.
India has gained but still lags far behind
However, trends for the last three decades indicate that India has raised its HDI score at an annual average rate of 1.42%, almost a third higher than the 1% growth clocked by developing countries as a whole.
But India’s gains still lag behind many other Asian nations like China (1.47%), Bangladesh (1.64%), Cambodia (1.66%) and Myanmar (1.86%).
And a closer look at the other composite indices from the family of development indices shows that India falters badly in many areas, especially on the gender and income distribution fronts.
All of which isn’t surprising given that it was in 1991 that India initiated economic liberalisation. The HDI improvement over this period essentially captures the benefits that accrued to Indian society from that historic decision.
Decline in Infant Mortality Rate & Maternal Mortality Rate.
Increased Immunization.
Better housing, sanitation and education.
Smaller families, growing income.
Improved public healthcare infrastructure, particularly, preventive healthcare.
Very often has been insisted on the inadequacy of income as the sole indicator of welfare and augmented, that measuring income is losing its utility, becoming more puzzling and contributes only insignificantly to human development.
Limitations of HDI
HDR has been always disputable and has caught the public-eye, whenever it was published. It has many reasons.
One of them is that the concept of human development is much deeper and richer than what can be caught in any index or set of indicators. Another argument is that its concept has not changed since 1990 when it was also defined in the first.
(1) An incomplete indicator
Human development is incomplete without human freedom and that while the need for qualities judgement is clear; there is no simple quantitative measure available yet to capture the many aspects of human freedom.
HDI also does not specifically reflect quality of life factors, such as empowerment movements or overall feelings of security or happiness.
(2) Limited idea of development
The HDI is not reflecting the human development idea accurately.
It is an index restricted to the socio-economic sphere of life; the political and civil spheres are in the most part kept separate.
Hence there is a sub-estimation of inequality among countries, which means that this dimension is not being taken into consideration appropriately.
(3) A vague concept
Concerning data quality and the exact construction of the index HDI is conceptually weak and empirically unsound.
This strong critic comes from the idea that both components of HDI are problematic. The GNP in developing countries suffers from incomplete coverage, measurement errors and biases.
The definition and measurement of literacy are different among countries and also, this data has not been available since 1970 in a significant number of countries.
(4) Data quality issues
The HDI, as a combination of only four relatively simple indicators, doesn’t only raise a questions what other indicators should be included, but also how to ensure quality and comparable input data.
It is logical that the UNDP try to collect their data from international organizations concentrating in collecting data in specific fields.
Quality and trustworthiness of those data is disputable, especially when we get the information from UN non-democratic members, as for example Cuba or China.
(5) A tool for mere comparison
The concept of HDI was set up mainly for relative comparison of countries in one particular time.
HDI is much better when distinguishing between countries with low and middle human development, instead of countries at the top of the ranking.
Therefore, the original notion was not to set up an absolute ranking, but let’s quite free hands in comparison of the results.
(6) Development has to be greener
The human development approach has not adequately incorporated environmental conditions which may threaten long-term achievements on human development. The most pervasive failure was on environmental sustainability.
However, for the first time in 2020, the UNDP introduced a new metric to reflect the impact caused by each country’s per-capita carbon emissions and its material footprint.
This is Planetary Pressures-adjusted HDI or PHDI. It measured the amount of fossil fuels, metals and other resources used to make the goods and services it consumes.
(7) Wealth can never equate welfare
Higher national wealth does not indicate welfare. GNI may not necessarily increase economic welfare; it depends on how it is spent.
For example, if a country spends more on military spending – this is reflected in higher GNI, but welfare could actually be lower.
Significance of HDI
Social measures of development ought to be factored in to calculate a country’s overall level of development. Some believe that additional factors such as human rights and happiness are very important. But still, HDI is a relevant factor.
It is one of the few multidimensional indices as it includes indicators such as literacy rate, enrollment ratio, life expectancy rate, infant mortality rate, etc.
It acts as a true yardstick to measure development in real sense.
Unlike per capital income, which only indicates that a rise in the per capital income implies economic development; HDI considers many other vital social indicators and helps in measuring a nation’s well-being.
It helps as a differentiating factor to distinguish and classify different nations on the basis of their HDI ranks.
Lessons for India
Global experiences offer India a way out of this predicament.
Studies show that high growth accompanied by more effective income distribution and female empowerment strategies can help enhance human development, even with moderate social expenditures.
Clearly, India’s HDI scores can also be substantially enhanced if a politically committed government rolls out inclusive policies that strengthen public health, education and nutrition, and end gender discrimination to usher in a more egalitarian order.
Way forward: It lies in Sustainable Development
Both sustainable development and poverty eradication are both long-term and urgent endeavours, requiring not only the gradual and substantial redirection of country policies but a rapid response to pressing problems.
Ideally, sustainable development could provide an overarching framework within which all sub-goals (eg poverty eradication, social equality, ecosystem maintenance, climate compatibility) are framed.
It is not a subset of development; it is development (in a modern world of resource limits).
Environmental issues are not one factor among many but the meta-context within which poverty and other goals are sought.
Investing more in public research could lead to technological solutions to poverty and sustainability problems becoming more rapidly and openly available.
Developed nations owe it to all
To engage the broad coalition of support required to maintain high levels of development co-operation, rich countries will have to appeal to mutual benefit, not just charity.
There is a serious danger that poor countries may come under pressure to compromise on poverty reduction objectives for the sake of the planet – “green aid conditionalities” could emerge.
It should be made explicit that the poorest countries should follow whatever path best brings them out of poverty, including engaging in dirty growth if that means eradicating poverty faster.
Not to forget
From its beginnings, the HDR has argued for taking seriously the role of local specificity in thinking about economic and social development.
This recognition underlines the inherent limitations of global indicators and rankings. Such indicators can only help prompt focus and consideration relative backwardness.
Conclusion
To sum up, the introduction of the HDI three decades ago was an early attempt to address the shortcomings in conventional measures of wellbeing.
The HDI has continued to attract widespread attention and motivates the work of activists, scholars and political leaders around the world.
The HDI compels us to ask what matters more, the quantitative expansion of an economy, or the qualitative improvement in the capabilities of society.
Indeed the revival of interest in this subject at the highest levels of government is the need of the hour.
If a metaphor is used, human development accounting represents a house and the HDI is the door to the house. One should not mistake the door to be the house and one should not stop at the door, rather one should enter the house.
