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The HCI mirror

India’s scored a poorly 115th on the Human Capital Index substantially below its four neighbours Myanmar, Bangladesh, Nepal and Sri Lanka

Story: Manasvi | M. | 08th November 2018, 03:17 Hrs

Manasvi M. Kamat

The World Bank has recently ranked India on 115th position out of 157 countries on the Human Capital Index (HCI). These index values are used to measure education health system and youth mortality in a country while the human capital is defined as productivity measured against a benchmark of education and health. 

The HCI value ranges between 0 and 1 and shows how far below its potential a country performs. The global HCI average for all countries in the echelons for the year 2018 is 0.56.  

India has scored 0.44 and the other nations which have the same score are Ghana, Zimbabwe and Solomon Islands. 

India’s rank is substantially below with respect to its four neighbours like Myanmar (Rank of 107) Bangladesh (106) Nepal (102) and Sri Lanka (74) based on the said index. It is Singapore that topped the list followed by South Korea, Japan, Hong Kong and Finland which scored 0.88, 0.84, 0.84 0.82 and 0.81 respectively. 

The World Bank points that it is the focus on education as the main driver of their rapid development, that helped the above 5 countries to top the charts.  

The HCI conveys the productivity of the next generation of workers compared to a benchmark of complete standard education and full health. 

Launched at the World Bank-International Monetary Fund annual meeting in Bali, HCI has been constructed for 157 countries and this index is the bank’s latest push to ramp up that commitment as part of the Human Capital Project that it launched last year. 

For nearly half a century the World Bank and other Western foreign development institutions have been shifting their focus from building infrastructure to building human capital and prioritised on health and education because studies show that they are closely linked with a population’s productivity.   

India scores 0.44 which means the earning potential of our youngest generation over their lifetime is only 44 percent of what it could be, if they have access to complete education and good health. 

In other words India is losing 66 percent of its productivity by not fully investing in human capital. 

It simply means that a child born in India today will be only 44 percent as productive when she grows up as she could be if she enjoyed complete education and enjoys full health.  

The current results for India are pathetic. India can take consolation from three other facts that its human capital performance places it in the second-to-lowest quartile of the HCI and not the lowest. 

Second, those other large developing economies such as Brazil and Indonesia occupy the same station and third that our nearest much talked-about neighbour Pakistan, has a score of 0.39.  

In India girls have fared slightly better at 0.45 than boys, who scored 0.43. India got 0.96 score on the first parameter which means that the probability of survival up to the age of 5, is 96 out of 100 children. 

On the second parameter it says a child who starts school at age 4 can expect to complete 10.2 years of school by their 18th birthday. However factoring in what children actually learn, the expected years of school are only 5.8 in India. 

On other parameters the index reveals that 83 percent of 15-year-olds in India will survive until 60.  

The Government of India has questioned the index’s methodology by questioning the advisability and utility of this exercise of constructing HCI. 

Our contention is that HCI has failed to take into account other measures that India has undertaken to improve school enrolment, health and financial inclusion. 

According to the government there are major methodological weaknesses as well besides substantial data gaps. 

For instance, for the schooling parameter though quantity is assessed using enrolment rates reported by UNESCO, quality is gauged using harmonised test scores from major international student achievement testing programmes.  

Politicisation of HCI results in India apart, it must be agreed that HCI composition signals a renewed emphasis on investing in human capital. 

It also goes without saying that all the successive governments in India did not spend enough on education and health sectors both as a percentage of Gross Domestic Product and annual budgets. 

The expenditure on health and education has always been very modest and we need to massively invest in public education and community healthcare sector. 

The World Bank’s 2018 report on education emphasizes that there is little or no association across countries between levels of spending and levels of learning outcomes. 

Thus the main challenge for us is to reorient education systems from just more years of schooling to a coherent focus on learning, as investment in ‘human capital’ does not only mean ‘spending more’ as per the HCI construction methodology. 

It is also a fact that in countries such as India we have increased spending on education but never bothered to measure learning outcomes.   

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