Economic Growth and Human Development: India After Liberalisation

Abstract

India dismantled the License-Permit Quota (LPQ) Raj, ushering significant spurt in Gross Domestic Product (GDP) growth rates, exports, Foreign Exchange (FE) reserves. However, our record in human development index, in terms of Infant Mortality Rate (IMR), Maternal Mortality Rate (MMR), malnutrition of children, mean year of schooling have been quite dismal. The picture on containing income inequality is also quite disappointing in the urban segment. The paper brings out contours of rural distress and our achievement so far in terms of meeting the UN Millennium Development Goals (MDG). The paper brings out role of our Supreme Court in terms of its direction to the state to implement socio-economic justice and the impact of RTE Act 2009 on quality of education and policy interventions that are needed for improvement of educational outcomes. It makes a strong case for opting for balanced growth where right priority is accorded to merit goods like quality primary education and health as public remit. A balanced growth strategy between economic infrastructure and social overheads would be the right cocktail for India’s policy makers. The recommendations include introducing General Anti-Avoidance Rule (GAAR) at the earliest to pre-empt illegal parking of funds in tax havens, privatisation of Public Sector Banks (PSB) to promote better financial intermediation. It also supports strongly the case for introducing a Universal Basic Income (UBI) scheme, in lieu of plethora of subsidies presently in place, so that it guarantees a minimum standard of living for every Indian citizen. It emphasises the role of the state “as the guiding hand” for promoting socio economic justice for all and quality education at the grass root level!

Keywords: LPQ, GDP, IMR, MMR, MDG, GAAR, PSB, UBI