HDI Oscars: Slumdogs versus millionaires
What does it mean to rank much better on GDP per capita than in the HDI, as we do? It means we have been less successful in converting income into human development, writes P Sainath.
It has been the night of the long knives for our burgeoning billionaire population. Its band has just been devastated, falling by more than half from 53 to 24. The latest Croesus Count, also known as the Forbes Billionaires list, makes that much clear. We also fell by two notches to the sixth rank in the list of nations with the most billionaires. Our earlier No. 4 slot being slyly usurped by the Chinese who clock in with 29. More mortifying, we are a rung below the Brits who’ve grabbed Perch number 5, with 25.
The net asset worth of India’s brightest and best has also shrunk by over a third from the time of the last Forbes scroll. By 2007, that worth had reached $335 billion. That is, 53 individuals in a population of one billion held wealth equal to almost a third of their nation’s GDP at the time. This year, that worth plunged to $107 billion. (A moment’s respectful silence in memory of the dear, departed billions seems in order.) But there is some comfort in that our team is still worth more than twice what its Chinese rivals are. And we even now have eight billionaires more than all the Nordic nations put together - though they boast the highest living standards in the world.
“Four Indians were among the world’s top ten richest in 2008, worth a combined $160 billion,” points out Forbes. Today, alas, “that same foursome is worth just $54 billion.” But the 29 Indian tycoons reduced to the penury of mere millionairehood should not lose heart. Forbes offers us these words of reassurance. “The winds of wealth can change quickly ? They may yet again blow favourably in the direction of these tycoons.” So what if the big balances fly at half mast briefly? There could be gales ahead.
Alongside this grim tragedy runs a slightly longer-term saga. India has fallen to 132 in the new rankings of the United Nations Human Development Index (HDI) for 179 nations. Each year since 1990, the U.N. Development Programme has brought us this index, as a part of its Human Development Report. The HDI “looks beyond GDP to a broader definition of well-being.” It seeks to capture “three dimensions of human development: a long and healthy life (measured by life expectancy at birth). Being educated (measured by adult literacy and enrolment in primary, secondary and tertiary education). And third: GDP per capita measured in U.S. dollars at Purchasing Power Parity (PPP).”
Worst in a decade
In the Index of 2007-08, India ranked a dismal 128. Now we’re at 132. That is our worst ever grade on the Index this decade. It means, among other things, that little Bhutan, never once in the Forbes hall of fame, has trumped us in the new HDI rankings. The tiny Himalayan nation clocks in at 131. That is, a notch above its “second-fastest-growing-economy-in the-world” neighbour. Bhutan once languished amongst the bottom 15 nations in the U.N.’s HDI. It has never been among the world’s fastest growing economies.
At rank 132, India also lags behind war-ravaged Congo, Botswana, and Bolivia. (The last is often called Latin America’s poorest nation). The Occupied Territories of Palestine (torn by conflict for 60 years) are also ahead of us. Another neighbour - Sri Lanka - has been devastated by war for over two decades and has slipped a few notches. It still logs in at 104 - 28 rungs above India. Vietnam suffered casualties in millions in the war waged against it by the United States. Decades after, its agriculture is yet to recover from the planned destruction, lethal bombing, and the conscious use of deadly poisons. But Vietnam clocks in at 114. And China at 94 despite falling several places.
The bad news about the bad news is that these figures reflect the good news days. They relate to the year 2006. (The Sensex was booming. It breached the 10,000 and even 14,000-mark for the first time ever. The Indian economy also grew at 9.6 per cent in 2006-07 and 9.4 per cent in 2005-06.) Those were the glory days our 132nd rank is rooted in. The same period when we churned out 53 dollar billionaires. So the updated HDI numbers do not begin to capture the economic downturn. The picture will be even less pretty when those factors kick in.
They do capture, though, the revised purchasing power parity (PPP) estimates that clocked in by late 2007. These columns foretold this problem at the time. It was clear that if the Index was using the older PPP data, then “even our awful HDI performance could get worse” once those were revised. (India’s GDP per capita (PPP) fell from $3452 to $2489 with the new data.)
And yet, we’d be even lower down than rank 132 but for our showing on the GDP-per capita front. Even now, our rank on that front is six notches higher than our HDI rank. It makes us look better than we are. For instance, in making out the current rankings, U.N. researchers point out that the GDP per capita data for 2006 “caused India to rise one place.” But “new data (for 2006) on life expectancy caused India to fall one place.” India then also fell two more places as two more nations - Montenegro and Serbia - joined the list. Both fared better than we did. We fell a further two places “as a result of revised PPP estimates.” That’s how we ended up four slots below our last rank.
What does it mean to rank much better on GDP per capita than in the HDI, as we do? It means you have been less successful in converting income into human development. Our GDP per capita rank is six rungs above our HDI rank. Vietnam’s HDI rank of 114 is 15 rungs above its GDP per capita rank. Unlike us, Vietnam has - despite awful historic handicaps - converted its wealth into human development far better.
Cuba logs in at 48, thus breaking into the top 50 nations in the HDI. (While India firms up its place in the bottom 50.) That’s seven places above wealthy Saudi Arabia, whose per capita GDP is three times higher than Cuba’s. In that ranking, Saudi Arabia is No. 35, towering above Cuba’s 88. But when it comes to human development, Saudi Arabia lags seven rungs below Cuba. Apart from suffering lower income, Cuba has lived under crippling sanctions for decades. Sanctions that have imposed huge constraints and high prices on all essentials. Yet, life expectancy at birth in Cuba is now 77.9 years. That’s almost the same as the U.S. (78). And about 14 years better than India’s 64.1.
Meanwhile, the U.S. has logged its worst rank ever, falling to 15 from 12. Between 1995 and 2000, the U.S. was always in the top 5, even staying at rank 2 for a couple of years. Like with India, its decline in HDI has come in the very years seen as its best, the Golden Age of the Free Market. The Nirvana point of neo-liberalism. A year into the economic reforms, India in 1992 ranked 121 among 160 nations then covered by the Index. Today, India is at 132 among 179 nations. Straight comparisons across that time are hard as the Index has changed in numbers and methodology. But the trend is clearly not joyous.
Steady decline
The HDI figures since 2002 signal a steady decline in the nation’s conversion of wealth into human development - even as the numbers of its billionaires and millionaires doubled and trebled. Now the billionaires have shrunk in number, but not the slumdogs. There are at least 836 million Indians living on less than Rs.20 a day, as the government’s own report told us in 2007. Over 200 million of those get by on less than Rs.12 daily. And those are pre-downturn numbers, too. Maybe, we need a new Forbes 500 list - naming the world’s 500 poorest citizens. Who could beat us on that one?
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Cite this article
P Sainath (2009) ‘HDI Oscars: Slumdogs versus millionaires’, India Together, 19 March 2009. https://indiatogether.org/forbes-op-ed/
11 reader responses
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Shivakumar Jolad · 25 March 2009
I agree with you that India has been poorly performing in HDI. But you always mention the relative ranking and fail to tell the absolute index. India HDI (2006) is 0.609 a 0.009 increase compared to 2005. (Note HDI ranking for 2009 is calculated based on 2006 data). So India has not scored badly than before, the growth rate is of course slow. You compare India with countries like Bostawana, Bolivia and Sri Lanka. Bostwana is one of the richest countries in Africa with GDP per capita more than double that of India. Latin America has consistently fared higher in HDI. So Bolivia is no exception. Sri Lankan's health and education achievements have been lauded for decades. So there is no surprise in this. Also, please don't make comparision of a huge country like India (1/6th of world population) with small countries like Bostwana, Bhutan or Sri Lanka. The demographic, economic geographic and political diversity makes the challenge really hard for India. I wish instead of complaining on number of billionairs or sensex, please suggest readers with solutions to achieving millennium development goals like Wadanatodo Abhiyan or the Lead India campaign.
Sridhar · 27 March 2009
Dear Sainath, I agree with you mostly and the last bit about the 500 poorest citizens packs a brutal punch. However, comparisons of a billion plus population with Bhutan or Cuba is hardly appropriate. It might be more worthwhile to compare a state (say, Andhra Pradesh) with smaller countries like Italy (for instance, as it comparable in population size and is also the poorest among the G-8) and map the disparities in HDI. India is too vast and too diverse to be treated as one entity on the HDI.
Vispi Jokhi · 4 April 2009
At the end of the day whatever the figures say the policies of our government be they whichever dispensation are always favoring the forbes billionaires and not the slumdogs.
Abhishek Jain · 6 April 2009
I do agree that there is some merit in the argument that it is unfair to compare smaller countries with India. However, at the end of the day, HDI scale is indeed a relative measure of human development in nations. So, I agree with Mr. Sainath in comparing India with other nations. With regards to proposing solutions, why do we need to wait for somebody else to suggest solutions ?
Nand Kishore Singh · 8 April 2009
It is very strange that educated people in India are also mesmerized with thought of "POPULATION IS A PROBLEM NOT AN ASSET". Similarly most of us think bigness our country is problem. If it is so, then breaking India in small country may be a good way for development. Bigness of our country and large population are assets for us if we can feel that a man is born not only with a stomach but with two hands and a mind also. Problem is coordination and management. Author has raised a correct issue by questioning GDP syndrome. We should think of alternatives - better management and coordination.
Babu Bhatt · 16 April 2009
Nice article. You should also look at the huge divergence between productivity and real wages that has been a steady feature in India since the so-called liberalisation. Even in the US, since the free market reforms and the financialization since the 70's have led to huge divergence between productivity levels and real wages. while productivity and working hours have shot up, real wages have declined or stagnated for over 30 years now, leading into the current financial crisis. It is evident that id drastic measures are not taken, India too will go into the same trap of an extremely wealthy and powerful capitalist class and a largely oppressed working class. In short, the trickle down theory of capitalism is not going to work. It is time the Indian working class started organizing and started thinking of alternatives to capitalism. Democratization of the workplace and equal distribution of wealth among regions should be implemented immediately along with direct democracy replacing representative democracy.
Nedunchezhian D · 3 May 2009
The current corruption in education and health(where majority of our rural population experiences), will definitely help this country to produce more unethical youngsters with no-value for the Country or for humanity. Definitely India's HDI will hit further low value unless corrective measures are not taken by Government.
Gaurav Singhal · 19 June 2009
Its a serious question that the author has raised. There are countries which have a more backward image but have faired well in Human Development rankings. And there is almost no country which has an image of being a fast growing economy but has faired worse than India on HDI rankings. At least on the education front, there are a number of countries such as Vietnam, Uzbekistan, Kyrgyzstan and Moldova which have, even after having a lower GDP per capita (PPP) than that of India, have faired very well. Literacy rate in these countries is between 90-100%, compared to 65% of India. And this data for India is an averaged data of all the states. If seen state-wise, some of our states like Uttar Pradesh and Bihar, kind of nations in themselves, would bring the HDI rankings for them lower to perhaps the worst world standards. But, theres other side of the analysis also. India was the second fastest growing major economy of the world for the time the HDI report mentions. And yet, Indias rank of 132 is dismal compared to the oft-repeated media euphoria about the growth of Indian economy and the Sensex. India has failed. Growth of economy doesnt imply a decent HDI ranking. Further, both cannot be compared. A country like Sierra Leone, which fares very badly at HDI, can still clock a good economic growth and still for many years can remain at the bottom of the HDI rankings. All that can be compared is the growth in economy and growth in human development. So the things to compare are how much Human Development Index has increased vis-à-vis the increase in GDP. Apples should be compared with apples only, a very basic law of nature. Lets compare the growth in HDI. UNDP report measures the absolute progress in HDI made by all the countries under three time-periods. The most recent comparison, for the short-term of 2000-2006, places India at rank 10th among those 131 countries which are ahead of it in HDI. All in all, it places India 15th among all the nations of the world for that period. So though India had a low HDI, it improved its HDI quite fast compared to others. And remember, 2000-2006 wasnt a rosy 8% growth period throughout, the first three years saw an average growth less than 5%. And now lets come to the most cursed years of Indian economic growth by the analysts. Lets see how India progressed in human development when it was marching ahead in economy. Data for 2003-2006 from the very same UNDP report shows that the second-fastest-growing-economy-in-the-world was eighth fastest in the world on progress in Human Development. Yes, ranked 8 among over 175 nations. Shocking? But journalists wont tell you that, you would have to actually download hundreds of pages about that report, take a break from office for two and a half days, and know it yourself. That is the curse you would have to bear. But even after such progress, India slipped from rank 128 to rank 132. How come that is possible? Well the author himself provides the answer; it is not a real shift (See 9th paragraph). 2 places since 2 better ranked countries were added, and 2 places because estimates of a data were revised. Nothing changed in the real world, these were only technical adjustments. Infact, the period 2003-2006 saw Indias one of the best ever improvement in HDI. The index improved from 0.576 to 0.609. This improvement is one of the best in the decade, isnt it? This much for the people who say that India is growing at 8%+ and despite that it is at the rank 132, so the growth is useless. Now the question comes that despite Indias good growth on HDI, how come the rank has not actually improved? Well theres a cluster of nations around it, all of which are moving pretty fast, and hence the relative speed is low. It is like having a few fast runners and all of almost equal speeds, so they are covering ground pretty fast but their relative position is changing slowly. But what importance does the rank has when the absolute progress rate is pretty fast? We are concerned here with real human development, and not the game of national ranks. Now coming to some other countries, lets take Bhutan first. It has never been among the world's fastest growing economies is a completely false statement. World Bank and other data sources show that Bhutan has registered 8%+ growth during 1997-2007. GDP per capita (PPP) of Bhutan is 60% higher than that of India. And to ones surprise, Bhutan was the real second-fastest-grown-economy-in-the-world in 2007! India, by the way, has actually been the second fastest major economy of the world these years. So Bhutan has progressed in economy also while progressing in HDI. It is not to say that HDI improvement is not possible without economic progress, but just to show that there are examples where economic growth has meant human development also. Economic theory suggests so, and many countries have demonstrated it. This is not to say that everything is well in India, we still lag behind many a countries which are even poorer than us. Our literacy rates are painfully low. Farmer suicides in some pockets of the country have not reduced, and perhaps even increased. But media has also to show, and that too without grave errors, that India is also making meaningful progress on the human development front. Squarely cursing with out a sound logic will only harm the national growth efforts. This in turn will completely ruin the poverty alleviation and human development momentum that we have gained in these years. The souls of the poor will never forgive the responsible for that.
prabhakar · 11 October 2009
i do agree with your all the comparison you have made with countries like srilanka and bhutan, size and demographic is not always a matter of obstacle of growth. we need to just to be determined to our duty and plan.we should take all stong measure and steps which can alleviate such a pathetic condition of hdi value. the greatest problem is there we fail to circulate the advantage of progress to all sorts of society. there is need to connect india and bharat.
Nitin · 2 May 2011
Thanks Indiatogether for presenting both the views, for exposing India's present state and for presenting the growth and improvements in recent years also. I recently read in Times of India that poverty reduction between 1993-94 and 2004-05 was 1.65% per year, and improved to 2.8% per year in the next five years to 2009-10. This is a big gain and a welcome news, although we have seen so many farmer suicides and related agrarian crisis issues in the last decade.
Gaurav Singhal · 13 April 2013
From 2013 UNDP Human Development Report: Between 1990 and 2012, almost all countries improved their human development status....... Progress was particularly rapid in more than 40 countries of the South, whose increases in HDI value were significantly larger than predicted for countries that were at a similar level of HDI value in 1990. This includes countries as diverse as Ghana, Rwanda and Uganda in Sub-Saharan Africa; Bangladesh and India in South Asia;.....