REPUBLIC DAY SPECIAL
Weak human capital prepares us badly for the economy of the future; and HDPlus strategy is the process of formation of human capital.
Soon after assuming office for the second term in May 2019, Prime Minister Narendra Modi aimed for a 5 trillion dollar economy by 2024. Earlier, speaking at the release of BJP election manifesto in April 2019, PM Modi said: “India should aspire to be a developed country by 2047, the 100th anniversary of its Independence”, and added that his government “will lay the foundation for this in the next five years” (2019-2024). Both goals are interrelated to make empowered India.
No doubt, a five trillion dollar economy will make India a global economic powerhouse. It will also help in alleviating poverty. “…our ambition to become economically strong has been driven more by our desire to become a less poorer nation,” finance minister Nirmala Sitharaman said while delivering a lecture on ‘Indian Economy: Challenges and Prospects’ at prestigious Columbia University’s School of International and Public Affairs on October 15, 2019.
An increasing GDP (Gross Domestic Product) is often seen as a measure of development and economic success. The economy, according to Niti Aayog CEO Amitabh Kant, needs to “grow (at) 8 per cent-plus year after year to become a $5-trillion economy,” nearly double from its current $2.9 trillion.  The pre-budget Economic Survey also said to reach the magic $5-trillion; India needs to “sustain a real GDP growth rate of 8 per cent”. But that possibility looks to have been kicked into the long grass with the Reserve Bank of India slashing its growth forecast for the financial year 2019-20 to 5 per cent or less from an earlier estimate of 6.1 per cent, citing weak domestic and internal demand.
So what India should do? There is no secret that in the era of high economic growth, India’s growth is much skewed and its benefits go disproportionately to few people as gets manifested by Oxfam’s Wealth Report (2019) which points out that during last year, “wealth of top 1 percent in India increased by 39 percent whereas wealth of bottom 50 percent increased at a dismal 3 percent”. The concern raised by many experts is that the income inequality in India is rising much faster than expected. The top one per cent richest individuals in India appropriated six per cent of total income in the early 1980s, and now, this figure has gone up to twenty two per cent. This suggests that wealth is not trickling down to the poor and India is turning into a ‘republic of inequality’.
The results of the cross country analysis indicate that the level of productivity is negatively related to income inequality and that in turn pushes level of poverty. The Multidimensional Poverty Index (MPI), developed by the Oxford Poverty & Human Development Initiative (OPHI) and UNDP, identifies how people are being left behind across three key dimensions: health, education and living standards, and 10 indicators – nutrition, child mortality, years of schooling, school attendance, sanitation, cooking fuel, drinking water, electricity, housing and assets. According to the MIP report,  India has the highest multidimensional poverty after Afghanistan in South Asia. Nearly 54 per cent of the Indian population is multidimensional poor compared to 5 per cent in China. There are more multidimensional poor people (421 million) in the eight poorest Indian states (Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal than in 26 poorest African nations combined (410 M).  It means around 700 million (70 crore) out of the total population of 1,370 in 2019 can be classified as deprived or vanchit Indians. 
And, there is no wonder that the World Bank ranked India at 115th out of 157 countries on the Human Capital Index in 2018.  HCI seeks to measure the amount of human capital that a child born today can expect to attain by the age of 18. According to its parameters a child born in India today will only be 44 per cent as productive as she could have been if she had enjoyed quality education and full health as well as better living environment including water and sanitation. In other words, there are grave deficiencies in India’s human development inputs that are preventing children from reaching their full potential. As such, the productivity, measured as per capita GDP, is very low. India became the fifth largest economy in the world in terms of GDP in 2018 but still it has a very-very low per capita GDP, as per IMF. It is placed at 119th position among 185 countries.
Delhi School of Economics professor Ram Singh says what help the economy could reach $5 trillion would be a near doubling of exports to $1 trillion annually. But that’s a big ask as India’s export performance has been normally weak. In fact, it is declining mainly due to the low level of labour productivity.
The goal of making India a USD 5 trillion economy by 2024 is difficult but not impossible. So what India should be doing? The only way one can achieve the target by improving labour productivity or human capital. Several recent studies have found that the higher is income inequality within a country the more limited is the impact of growth on reducing poverty. A study conducted by the Centre for the Study of Living Standards, Canada uses several sources of international data on labour productivity, poverty and income inequality, and finds that across the developing countries for which data are available productivity growth plays a substantial role in reducing poverty.  This conclusion suggests that developing countries like India, in attempting to reach their poverty reduction objectives, should pursue policies that foster productivity growth. However, a strong social safety net is also required to ensure that the adjustment costs that come with productivity increases do not fall disproportionately on the poor and that all members of society realize the gains from growth.
It is, therefore, an investment in people, especially who are deprived, is a need of the hour because only educated, skilled and healthy or empowered manpower can achieve the goal of 5 trillion dollar economy with inclusiveness.
How to empower people?
All people have the potential to succeed. Our job is to see the potential, find out what they lack to develop it, and equip them with what they need. Here, the capability approach, which was conceived as an alternative approach to welfare economics by Amartya Sen and others,  may be an effective strategy. It is an approach that is focused on people and their opportunities and choices.
The policy monograph – Nurturing Human Development: A Strategy for New India –  proposes a strategy to unlock the human potential based on the capability approach; and it is christened as “HDPlus” (Human Development Plus). It is a dynamic agenda based on a ‘whole child’ concept, that is school-going child and his/her family (that is HDPlus family) should be the fulcrum of human development efforts. The concept is being described by policies, practices, and relationships which ensure that each child is healthy, educated, engaged, supported and encouraged. For this, integrating the child and his or her family more deeply into the day-to-day life of school and home activities represents an untapped instrument for raising the overall achievements including learning skills and health parameters, and hence improving overall productivity. In other words, creating an enabling environment at family and school levels is a way to empower people.
To start with, the HDPlus strategy focuses on five interventions in a more closely integrated form. They are: Improving quality of elementary education, Facilitating water and sanitation, Enhancing primary health, Reducing gender gap, and Stabilizing population. Additional interventions may be added or given interventions could be dropped from the list looking at the needs of specific people/area. Hence, the strategy has been termed as “HDPlus”.
“The Nature of Mass Poverty” is a book by John Kenneth Galbraith, Harvard Professor of Economics.  In this book, Prof. Galbraith argues that “to eliminate poverty, we must invest more than proportionately in the children of the poor community (families).” Now the question arises how to identify the target population or HDPlus families?
India is committed to compulsory free education for each child till the age of 14 years and so on. Almost all children go to the school. Therefore, the real problem is perhaps not with the question of access to education but rather it is about the quality of education being provided. In India, there are two types of schools – the government owned and aided ones, and the privately owned schools. The government schools are indeed doing a commendable job of making education available to a greater number of children since they are everywhere and are normally doing it for free or for fees that are really within the reach of everyone. They are of great help for people in urban areas too for whom it is impossible to get their children to the more expensive private schools and in the rural areas; perhaps, they are the only ways in which children can get educated and dream of a better future. However, some teething problems do remain.
Most government schools today, however, lack even the most basic requirements, such as class rooms, desks, drinking water, etc. There are no separate toilets for boys and girls. Broken window panes, furniture, fans and lights, paint and plaster peeling off the walls, leaky roofs, stinking toilets and garbage piled up in corners, children being taught sitting on the corridors due to lack of classrooms, etc. are a common sight in most government schools across the country. As such, Government schools in India mainly cater to the very poor section of the society. As per the Annual Economic Survey 2018, around 80 percent of students in the government primary/elementary schools are from the weaker sections of the society.  Based on the findings of National Achievement Survey 2017 (NAS) and Annual Status of Education Report 2017 (ASER), it has been found that “government schools have become the schools of OBCs, Dalits and Muslims as every child who can afford it has moved on to private schools.”  The public elementary schools are, therefore, one of the most convenient institutions for reaching the target population – Deprived Household.
After selecting students, the strategy will focus on their families and provide all basic needs for better living including water, toilet, electricity, cooking gas, primary health etc to promote human development. Further, efforts will be made that all students complete compulsory education. In addition, it will be assured that they are well prepared to read, write and be efficient in mathematics & basic digital technology before moving to secondary education, thus will be laying down the foundation of human capital formation, as shown below:
India has to address root causes of poverty and inequality in order to empower people. Persistent poverty and inequality is not just a violation of basic human rights of the people but it also undermines economic growth of a nation by wasting talents and human resources. It leads to a skewed society where power and decision-making remains in the hands of a few, leading to greater conflicts and undermining social cohesion. And that is happening in India.
The paper argues that there are grave deficiencies in human development endeavors in India that are preventing children from reaching their full potential, as noted by the Human Capital Index of the World Bank (Box A). What should be done? Commenting on the poor quality of human development, measured in terms of HDI, Bill Gates and Ratan Tata (2016) rightly noted: “Human capital is one of India’s greatest assets. Yet, the world’s fastest growing economy hasn’t touched millions of Indian citizens at the bottom of the economic pyramid”. For this, India has to empower its people through a dedicated human development approach. For this, the paper suggests a workable framework – HDPlus – as how to invest in the people for enhancing productivity in order to achieve the goal of developed country.
In sum, the HDPlus strategy, which aimed to lay foundation for the human competency, should be immediate priority of India. It provides a workable process in achieving not only target of 5 trillion dollar economy but also making an empowered India in a generation.
 Read more at:
 Chancel, Lucas and Thomas Piketty. 2017. “Indian income inequality, 1922-2014: From British Raj to Billionaire Raj?” WID, World Working Paper Series No. 2017/11, World Inequality Lab, Paris School of Economics. Also refer at: http://wid.world/document/chancelpiketty2017widworld/
 DiPietro, William R. 2014. “Productivity Growth and Income Inequality,” Journal of Economics and Development Studies, Vol. 2 (3): 01-08.
 India is the second most populated country of the world after China. Population of India is projected close to 1.37 billion or 1,369 millions in 2019, compare to 1.354 billion in 2018. Population growth rate for 2019 is projected at 1.08%. For details, refer at: http://statisticstimes.com/demographics/population-of-india.php
 Refer 2018 Human Development Index (HDI) at: https://www.onlinegk.com/news-and-tips/2018-human-development-index-(hdi)
 Centre for the Study of Living Standards. 2003. Productivity Growth and Poverty Reduction in Developing Countries, CSLS Research Reports 2003-06, Centre for the Study of Living Standards, Ottawa, Download at : http://www.csls.ca/reports/10-03-05_poverty.pdf
For details, see: Kothari, Devendra. 2019. Nurturing Human Development: A Strategy for New India, New Delhi: Paragoan International Publishers.
 Galbraith, John Kenneth. 1979. The Nature of Mass Poverty, Cambridge: Harvard University Press.
 Kothari, Devendra. 2017. “Managing school education in India”, in Administrative Change, Vol. XLIV (2): 78-89.
 Economic Survey is an annual document of the Ministry of Finance, Government of India. It reviews the developments in the Indian economy over the previous 12 months, summarizes the performance on major development programs, and highlights the policy initiatives of the government. It also highlights the prospects of the economy in the short to medium term. Refer: Economic Survey of India, Vol. 2, at: https://insightgovtexam.com/economic-survey-2018-pdf-download/
 Refer National Achievement Survey(NAS) at: http://nas.schooleduinfo.in/
 Gates, Bill and Ratan Tata. 2016, “New nutrition report underscores the importance of leadership in addressing stunting in India”, Times of India. Refer at: https://blogs.timesofindia.indiatimes.com/toi-editorials/new-nutrition-report-underscores-the-importance-of-leadership-in-addressing-stunting-in-india