Kerala provides an empirical example to show how it is possible to achieve both growth and improved income distribution through human development, a United Nations working paper has said.
The document also estimates substantial losses in human development due to inequality in different dimensions across Indian States.
The loss due to inequality is the highest with respect to education (43 per cent), followed by health (34 per cent), and income (16 per cent). The average loss due to inequality in India is 32 per cent at the all-India level. It is the highest for Madhya Pradesh (36 per cent) and Chhattisgarh (35 per cent) and the lowest for Kerala (17 per cent).
Kerala is the only State in the country which remains in the ‘very high human development index (HDI)’ with respect to all the three dimensions, both with and without adjustment for inequality. In addition, Nagaland, Mizoram, and Punjab fare well by most of the indicators, with and without the adjustment for inequality.
The document – Human Development in India: Costs of Inequality, a working paper brought out for the International Policy Centre for Inclusive Growth of the United Nations Development Programme (UNDP) – seeks to quantify the loss in human development due to inequalities in these three dimensions.
This is done using the methodology to estimate a new index called the Inequality-adjusted Human Development Index (IHDI), proposed by the UNDP. The document is authored by M.H. Suryanarayan of the Indira Gandhi Institute of Development Research, Mumbai, and Ankush Agrawal of the Indian Institute of Technology, Delhi.
The average loss because of inequality in income is 16 per cent at the all-India level. It is the highest for Maharashtra (19 per cent), followed by Tamil Nadu (17 per cent), and the lowest for Manipur (4 per cent). Maharashtra, which ranks eighth in the country based on the income dimension index, ranks 17th after the adjustment for income inequality.
The loss in the education component on account of inequality at the all-India level is 43 per cent. The loss is the highest in Uttar Pradesh, Rajasthan, and Jharkhand (46 per cent) and the lowest in Mizoram (17 per cent) and Kerala (23 per cent). The education index is the highest for Kerala (0.915), followed by Nagaland (0.905), and Himachal Pradesh (0.790), and the lowest for Orissa (0.281), and Madhya Pradesh (0.337).
The average loss due to inequality in health is 34 per cent. It is the highest in Chhattisgarh and Madhya Pradesh (43 per cent) and the lowest in Kerala (11 per cent). As far as ranking is concerned, Kerala (0.854) ranks first, followed by Punjab (0.782) and the seven north-eastern States (0.768 each). Nagaland (0.987) ranks first in terms of income index, followed by Kerala (0.953) and Punjab (0.915). The lowest ranked are Bihar (0.498) and Orissa (0.504).