Indicators Showing Indias Development - Essay Example

Executive Summary

India is a nation whose economy has consistently grown over the years, as illustrated by its Human Development Index and other economic indicators. Education indicators are important for the evaluation of a nation’s economic development. A skilled population enhances sustainable development in a country. Regarding the education indicators, the factors evaluated include the enrollment ratio between males and females at various levels of education and the adult literacy index. Various health indicators have been assessed as they provide a picture of the well-being of a nation’s citizens. These aspects include the infant mortality rate and the life expectancy at birth. Other economic indicators that have been assessed include the PPP adjusted GNI, Human Development Index, as well as poverty and inequality indices. The primary enrollment in India has significantly improved over the years, and in 2006, 93.4% of the children who had attained the age of attending elementary school were enrolled. India’s GDP at market prices grew to 7.4% in 2014-2015, and this was a rise from 7% from the previous financial year. The growth rate of the nation’s GNI per capita has grown since the 2000s, coming from 19040 Rupees in the 2002-03 fiscal year to 53331 in the 2010-11 fiscal year. Equally significant, India’s health indicators improved consistently over the years. The obstacles to India’s economic development include the government’s control of many firms, the lack of good trade relations with world markets, and corruption. For the nation’s economy to grow at a faster rate, a structural pattern of development should be adopted. This development approach would balance the growth in all sectors of the Indian economy.

Introduction

A country’s level of development can be estimated by evaluating its different economic indicators. There should not be a limitation to the number of indicators used since such an approach cannot give a clear picture of a nation’s level of development. This report would look at the education indicators including the enrollment ratio, the adult literacy index, as well as the education attainment. In the evaluation of the economic development in India, this report would look at the PPP adjusted GNI and the Human Development Index, as well as the poverty and inequality indicators. The report would further consider the obstacles to India’s development and the remedies for faster development would be explained.

Indicators Showing India’s Development

Education is an aspect that fosters sustainable improvement in the productivity, living standards, and health of populations in a nation. The enrollment ratios in the different levels of education in a country are a proxy for human capital, and this is a factor that facilitates sustainable growth. The education index in India evaluates the nation’s achievement in its enrollment in the various levels of education, as well as its literacy levels. The weighted average of the enrollment indices and literacy are the components that make up the education index (Siddiqui 2015, p. 179). The enrollment ratio is an indicator of the people’s access to education in a country.

In India, a third of the children between the ages of 6-14 years do not go to school. The Human Development Report of 2004 suggests that only 59% of the Indian children reach the fifth grade (Siddiqui 2015, p. 182). In the period between 1990 and 1991, the net primary enrollment ratio was 83%. From 1994 to 1997, the enrollment in tertiary institutions in India was 25% (Siddiqui 2015, p. 182). The primary enrollment ratio in India has, however, significantly increased, indicating the substantial achievement in the nation’s economic development. In 2006, 93.4% of the children who attained the age of attending elementary school were enrolled in learning institutions (Kingdon 2007, p. 6).

Although the primary and secondary enrollment in India has improved over the years, the enrollment of children aged 11-14 years is relatively small. For instance, 7.7% of males and 10.3% of females in this age group did not attend school because they dropped out while others did not enrol at all (Kingdon 2007, p. 6). The children's population who does not have access to education increased with age since the percentage of children who did not attend school was 20.2% and 22.7% for boys and girls respectively (Kingdon 2007, p. 6).

A high number of males are enrolled in the Indian tertiary institutions as compared to females, indicating the skewness in the gender parity (Siddiqui 2015, p. 183). At this level of education, there is relatively low enrollment in math, science, and engineering courses, which are significant to a nation’s economic development. According to the Human Development Report, the percentage of students enrolled in these courses in India is 25% (Kingdon 2007, p. 7). Equally significant, India’s public expenditure on education is 12.7%, but since the nation has a low GDP per capita, the spending may not effectively improve enrollment ratios (Siddiqui 2015, p. 184).

Between 1991 and 2001, the literacy rates in the Indian population above the age of 7 years significantly improved. Literacy rates went from 52% in the 1990’s to 65% in 2001, marking the nation’s highest improvement in educating the public within a decade since 1881 (Kingdon 2007, p. 10). India’s adult literacy rate for individuals above the age of 15 years has improved consistently, going from 49.3 in 1990 to 61.3 in 2002 (Siddiqui 2015, p. 181). India’s education, however, still manifested by gender inequalities, and this has been affected by religion and societal establishments. For instance, the Rajasthan state has one of the highest male-female literacy gaps in the world, and only 5% of women are literate (Siddiqui 2015, p. 180).

Although India’s economic transformation has been gradual, policy-makers have made efforts to shield the nation from the global economy instabilities. India has displayed a substantial economic development since it gained independence. The nation had a modest economic growth, as illustrated by the GDP growth, which averaged 3.7% between 1950 and 1964 (Adeney& Wyatt 2010, p. 191). The country had an impressive GDP growth rate in the period between 1980 and 2004, and the economy grew by 5.7% (Adeney & Wyatt 2010, p. 191). These figures indicate the reason why this Asian nation has become an emerging economy, illustrating its significant potential regarding the domestic production and its place in the regional market.

Even though the Indian economy has progressed well in some aspects such as the GDP growth, the nation still lags behind in per capita terms. In 2007, the country’s Gross National Income was US$950 according to figures from the World Bank (Adeney & Wyatt 2010, p. 192). The indicated GNI measure comprises of the domestic production of wealth as well as the income earned by the country’s citizens overseas. India’s GDP at market prices grew to 7.4% in 2014-2015, indicating a rise from 7% from the previous financial year (World Bank 2015, p. 1).

Various sectors have contributed to India’s GDP growth, with the services sector being the largest contributor. The growth in the services sector increased by 10.1% and 13.5% in the second and third quarters of the 2014-2015 financial year respectively, attributed to the booming real estate and financial services (World Bank 2015, p. 1). From the moment reforms were initiated in India, its economy has progressively globalized.

GNI cannot reveal a nation’s actual purchasing power in itself since its expression is in dollars (Myers & Kent 2013, p. 7). The purchasing power parity provides a realistic value of the purchasing power in a nation. In 2002, the Indian GNI was US$480. The PPP adjusted Gross National Income, however, was US$ 2570 at that time (Myers & Kent 2013, p. 8). It illustrates that the price of goods and services was significantly lower in India compared to the United States whereby goods worth $480 in India would cost approximately $2600 in the U.S. India’s PPP adjusted GNI has been increasing in the recent years, moving from $1600 in 1996 to $1980 in 2000. In 2014, India’s GNI was $5630 (The World Bank 2016).

By 2014, India’s economic potential had grown to the third position in the world up from the tenth position worldwide in 2005 in purchasing power parity (PPP) terms (The Economic Times 2014). Although India has a high inflation rate, the prices of goods and services are far much lower than other advanced economies, and this is the reason why the nation ranks high in the PPP measure. The growth rate of the GNI per capita in India has consistently grown since the 2000s, coming from 19040 Rupees in the 2002-03 financial year to 53331 in the 2010-11 fiscal year (Ponram 2014, p. 237).

Although India has made significant gains in its medical sector, its health indicators are not uniform across the region. The Indian life expectancy is lower than many other nations in the world. There is a positive correlation between the infant mortality, child malnutrition rates, and child mortality (Mahal et al. 2010, p. 10). India fairs relatively weak compared to other nations in its expenditures on health. For instance, the health expenditure per capita was $45 in 2008, which is quite small compared to a country such as Japan, which spent $3190 in the same year (Mahal et al. 2010, p. 9).

In 1960, India’s life expectancy at birth (LEB) was 42.3 years, and it has consistently improved over the years. India’s LEB got to 49.3 in 1970, 55.7 in 1980, and 59.7 in 1990 (Mahal et al. 2010, p. 9). Good health is indicative of the well-being of a nation’s citizens, and looking at the Indian case, it is evident that this economic aspect has been improving for the entire period. In 2007, the Indian LEB got to an average of 64.7 years (Mahal et al. 2010, p. 9). A person’s life expectancy is dependent on the probability of a child to survive the early stages of development, and the mortality rates once the child reaches adulthood.

Compared to other nations, India has a relatively high infant mortality rate (IMR). Evaluating India’s IMR over the past four decades, the country has made significant steps in improving this economic indicator. In 1960, India’s IMR was 156.6 per 1000 live births, and this improved to 128.7 in 1970 (Mahal et al. 2010, p. 10). Over the next ten years, the infant mortality rate further improved to 113, and it got to 80 in 1990. The Indian IMR is still high compared to other nations such as Bangladesh and Brazil, and its value, which was 54.3 in 2007 illustrates the government’s determination to prevent the deaths of children.

India has progressed in its human development over the years. According to the Human Development Report tabled by the UNDP for 2007-08, India was ranked at the 128th position among 177 nations (Kapila 2009, p. 84). The country’s poverty index significantly reduced as a result of the high economic growth. Another aspect that facilitated the growth of the human development in India was the decline in illiteracy rates across the nation (Kapila 2009, p. 84). Although some human development aspects in India have recorded a noteworthy improvement, their overall performance has not been consistent.

In 2000, the Indian Human Development Index was 0.577, and it improved to 0.619 in 2005 (Kapila 2009, p. 84). At the same time, the nation’s HDI rank improved from 124 to 128 during the same period, and this suggests that despite the improvement in other economic aspects, the human development has grown slowly. An assessment of the HDI from 1980 to 2001 illustrates that the nation had improved on its human development from 0.439 to 0.515 between 1980 and 1990 (Kapila 2009, p. 85). Equally significant, the HDI further progressed from 0.577 to 0.611 between 2000 and 2004.

Poverty is an issue in India, and there is a high level of economic disparities in the different states across the nation. The 2010 World Bank reports that approximately 400 million Indians live below the stipulated $1.25 per day, adjusted the purchasing power parity (Ponram 2014, p. 237). Considering India’s population, which constitutes 17.5% of the global population, 20.6% of the individuals who live below the poverty line come from India. The significantly high number of Indians who live below the poverty level illustrate the nation’s economic disparity.

India’s economic development is adversely affected by the inequality across the population. In the nation’s poorest states, the rate of poverty is up to four times higher than that in the states that are more economically advanced (Ponram 2014, p. 240). In 2011, the annual per capita income in the nation was $1410. Even though this figure places the country among some of the poorest middle-income countries, the Uttar Pradesh state had a per capita income of only $436 (Ponram 2014, p. 240). Equally significant, the less economically developed Indian states have a low HDI (Kapila 2009, p. 85).

Obstacles to the Development of India

India’s economy has consistently grown, even though it could have been increasing at a faster rate. One of the barriers to India’s economic growth is that the government owns most of the businesses in the nation (Screenivas 2006, p. 51). Considering that the Indian government controls a significant percentage of the country’s capital stock, there is no room for investment from the private entities. The government’s interference to the private investments is illustrated by the nation’s fiscal deficit. In the period between 1990-91 and 2002-03, India’s budget deficit was 5.3% (Screenivas 2006, p. 51). Over the years, the combined revenue deficit in India has grown from 2.9% in the 1990-91 financial year and by 1999-2000, it had shot to 6.3%.

The policies and rules that govern various aspects of India’s economy inhibit the nation’s economic growth (Screenivas 2006, p. 49). In the past, India had failed to protect the domestic industries to facilitate their growth. Some of the policies that the government has implemented are ill-conceived, and others inequitable (Farrell 2006, p. 148). As a result, domestic companies cannot effectively compete with foreign firms. Some of the sub-scale companies provide misleading reports concerning their profits as a consequence of avoiding taxation. Consequently, such companies would have a competitive advantage over the larger firms whose activities are closely monitored.

Before 1991, India’s economy was not liberated, and the nation did not have good trade relations with the world markets (Ponram 2014, p. 235). As a result, foreign trade was hindered by unreasonable import tariffs, quantitative restrictions, and export taxes. This indication illustrates that Indians companies could not conduct business efficiently with firms from other nations. India’s lack of consideration for its trade policy resulted in a stagnation of the country’s exports many years following its independence. Regarding the social inhibitors, India’s inability to alleviate poverty has hindered its development. A large number of Indians have failed to secure employment, resulting in more social issues such as corruption, where India is ranked 95th out of 183 nations in the vice (Ponram 2014, p. 239).

Remedies for Economic Development in India

For India’s economy to develop at a rate which is faster, there should be a structural pattern of development. The services sector has dominated India’s trade, as seen by its contribution to the production side of the nation’s GDP (World Bank 2015, p. 1). The growth of the services exports from India over the past 30 years is twice that of the goods exports (OECD 2012, p. 12). Considering that the Indian goods exports contribute less to the economy compared to the services exports, it is apparent that there is a shortage of labor in the Industrial sector. Developing economies need to diversify away from traditional products and agriculture and move toward current economic activities (McMillan &Rodrik 2011, p. 4).

Although India produces a significantly high number of engineers, scientists, and technicians, the skill base does not bring in the full economic advantage to the nation. The country’s insufficient workforce has led to reduced productivity in the economy (Khuong 2013, p. 238). For an emerging economy, the different sectors of the economy have labor productivity gaps. By adopting a structural pattern of development, there would be a balanced growth in all areas of the Indian economy, including the goods sector, as well as facilitating new investments. Even though new investments would help in the growth of the Indian economy, the service industry should not be disregarded since it is the most crucial for economic development.

Conclusion

In 2006, 93.4% of the Indian children who attained the age of attending elementary school were enrolled in learning institutions. The primary enrollment ratio in India has, however, significantly increased, indicating an achievement in the nation’s economic development. By 2014, the economic potential in India had grown to the third position in the world up from the tenth position worldwide in 2005 in purchasing power parity (PPP) terms. On the other hand, India’s life expectancy at birth went from 42.3 in 1960 to 64.7 in 2007. In 2000, the Indian Human Development Index was 0.577, and this improved to 0.619 in 2005. The country should, however, develop a structural pattern of development for the economy to grow faster.