Our GDP needs the HDP

Source: Indian Express

Relevance: Achieving sustainable and inclusive growth for all.

Synopsis: Despite the progress achieved in the field of technology; inequality and deprivation are still an important issue that needs to be addressed in India. Measuring Human Development Product might be a solution because GDP just indicates economic growth, while Human Development Product can help us identify and remove inequities and injustices

Inequity and deprivation in India
  • The median household income in India was Rs 15,000 per month, meaning just 500 rs per day (and 125rs per day per person for a family of four) for all the expenditure on food, clothing, housing, healthcare, festivals and more. Half of India lives with less than that.
  • The bottom 25% of households (about 300 million people in India) live on an income of less than Rs 8,500 per month or Rs 70 per day per person.
  • Inequities also exists across gender, caste, regions, and more.

These numbers do not account for the economic devastation that the pandemic has caused.

To solve such problems we need to measure them and GDP is not a holistic criterion as it limits itself to just economic growth of a country. We need to dig deeper and measure ‘Human Development Product (HDP)’. This concept includes measures that reflect progress on many other measures.

Parameters for HDP

There is necessity to add Human Development Product (HDP) as an additional parameter to measure GDP, since we can achieve only what we measure. HDP should consist of following five parameters:

  1. Female Labour Force Participation Rate(FLFPR)– It is currently at very low level (11-22). The empowerment of women through their economic independence is central to human development.
  2. Gender Income Parity- There should be equal wages for equal work between men and women. There is no point in more women participating in the labour force if they continue to get insecure and lower-paying jobs than men.
  3. Stunting- Stunting amongst children is about 35%, which indicates the dismal state of our public health, the nutritional status of our people, and environmental conditions.
  4. Water Quality and Availability- This is more difficult to measure, but we need an aggregate water health index. We can measure the quality and flow of 10 key rivers at specified geographical points and periodicity, as well as measure groundwater levels and quality in some of the most stressed areas. All this could give us an aggregate water health index.
  5. Quality of Polity- to check criminalization within politics. For this, we can measure the percentage of members of all our legislatures — state legislatures and Parliament — against whom criminal cases are pending or have convictions.
Importance of the parameters
  • Women related parameters- Two women related parameters mentioned above reflect deep structural issues, both in the economy and in society. Any progress on these two will happen only when there is broad-ranging progress across multiple factors such as education and an increase in employment opportunities
  • Stunting- it reflects the widespread conditions of public health, nutrition and public education.
  • Water- Tackling climate change and its effects on multiple fronts is a necessity. These can be measured in many ways. But nothing impacts an average person more than water.
  • Quality of polity– It reflects the condition of a country and vice versa
Way forward

The Human Development “Product”,  is product of many important factors — education, health, livelihoods, societal norms, political climate, environmental conditions, and more. Improvement in HDP will reflect and happen only with improvement on all these factors.

Conclusion

It’s time we devise a true marker of human progress. HDP might be the answer.

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