Has India failed in developing human capital?

The World Bank Report shows India is still struggling to control infant mortality, with only 96 per cent of the children born likely to survive to the age of five. 

Published: 14th October 2018 05:03 AM  |   Last Updated: 14th October 2018 05:03 AM   |  A+A-

Human Capital Index

For representational purposes (Amit Bandre | Express Illustrations)

Express News Service

The World Bank’s Human Capital Index (HCI) report released on Thursday has startling findings. It says a child born in India is likely to be only 44 per cent as productive when he/she grows up to be 18, when compared to an ideal situation if the child had enjoyed optimum education and full health facilities. Poor investment in human capital has thus placed India at a lowly 115th rank on the HCI among 157 countries surveyed. This is much below its peers, including China ranked 46, Malaysia at 55 and even immediate neighbour Bangladesh at 106. 

The World Bank Report shows India is still struggling to control infant mortality, with only 96 per cent of the children born likely to survive to the age of five. 


The Government of India has been quick to challenge the report stating that it did not reflect the key initiatives taken by the government to develop human capital “like the Samagra Shiksha Abhiyan, which focuses on access and quality of education for the benefit of 197 million school children.” It has been alleged that the report has also ignored the Ayushman Bharat Programme, “the world’s largest Health Insurance initiative”.

The government criticism has pointed to the Pradhan Mantri Ujjwala Yojana that has benefited women by providing gas connections and replacing back-breaking firewood and coke fuel. Financial inclusion was also mentioned wherein the Jandhan Yojana has provided access to formal banking services to millions. 

In conclusion, the response said, “The Government of India, therefore, has decided to ignore the HCI and will continue to undertake its path-breaking programme for human capital development…”

However, the previous year’s data on human capital released by the World Economic Forum showed that there had been little change. In 2017, India ranked a low 103rd out of 130 countries surveyed. 

It is not clear whether the World Bank has considered the impact of the ‘Samagra Siksha’ education outreach programme; but to fault the World Bank for not taking into account the Ayushman Bharat health programme is not fair since the insurance cover has just been launched and its impact can only be seen after a year of operations. 

It is also quixotic to point to India’s ‘zero deposit’ bank accounts being opened as well as issuing of gas connections to millions of women folk as these do not directly impact the development of children as members of a future workforce. 


Beyond the ‘jhumla’ of data and figures, the ground reality is frightening. The death of 290 children in just one month of August last year at Gorakhpur’s BRD Medical College Hospital is a scam that still hangs over UP’s Yogi Adityanath government. Many of these children died because of the inability of the hospital to dispense oxygen in time. 

There is an ambitious National Health Policy in place, which promises doubling health spending from the existing 1.15 per cent of Gross Domestic Product (GDP) to 2.5 per cent by 2025. This means increasing spends by Central and state governments by 25 per cent each year for the next 7-8 years till the health spending touches Rs 8 lakh crore, up from the current Rs 2 lakh crore. However, in the latest budget, the allocation is just Rs 52,800 crore for health in 2018-19, merely 5 per cent higher.

The Education Story is pretty much the same. Over 100 million people will enter India’s workforce by 2022, but a lack of skills and basic education may mean their contribution could be poor towards fueling economic growth. Though absolute spending by the Centre and the states on education has been increasing, as a percentage of GDP, there has been a steady decrease – Arun Jaitley’s latest budget showed spending on education was 2.7 per cent of GDP for the financial year 2018, down from 3.1 per cent in FY2013. Compare this to spends on education by India’s peers in 2014 – Brazil 5.7 per cent of GDP on education, China 4.1 per cent and South Africa 6.9 per cent. 

Moreover, formal education and skills don’t match. The Annual Status of Education Report 2017 found in rural India a quarter of all Class 8 children were unable to read Class 2 textbooks; and over half of them were unable to solve a three-digit by one-digit division problem. Data released by an international body like the World Bank should not be rejected as if national pride is at stake. 

Instead, we should realise we have a long way to go in skilling ourselves and take the bull by the horns.

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