Social Sector Expenditure and Human Development Index Ranking of States in India free essay sample

This Social Sector Expenditure in India includes expenditure on education, health and family welfare, rural water supply, women and child development, welfare of schedule cast, tribal welfare of disable and so on. This Social Sector Expenditure of the States is increasing very rapidly and continuously with the increasing population. There are various indicators and parameters which are used for the measurement of socio-economic development. These indicators are suggested by World Bank and UNDP. Human Development Index (HDI) is one of them. Under this over all background the present study is attempted to analyze the impact of Social Sector Expenditure, growth rate of GSDP on Human Resource Development by taking into consideration HDI ranking of the States, States ranking in the GSDP and raking of the States in per capita Social Sector Expenditure. The main objective of the study is to find out functional relationship between Social Sector Expenditure and HDI. The present study covers 25 years from 1981-2005 and 15 major States in India. The study is based on available secondary data. But the levels of the living of the vast masses of the people remained almost unchanged. This implied that something was very wrong with the narrow definition of development in which GNP growth rate was highly emphasized. An increasing number of economists and policy makers clamored for the ‘dethronement’ of GNP and the elevation of the direct attacks on wide spread absolute poverty, increasing inequitable income distribution and rising unemployment. In short during the 1970’s, economic development came to be redefined in terms of the reduction or elimination of poverty, inequality and unemployment within the context of growing economy. Modern view of Economic Development Recently the concept of economic development has been further widened so that it now involves not only reduction in poverty, inequality and unemployment but also requires improvement in quality of life which includes cleaner environment, better education, good health and nutrition. On the basis of various ingredients of good quality of life and other criteria such as enlargement of human choices and freedom, a human development index is prepared by United Nations Development Programme (UNDP). This human development index is considered as a better indicator of economic development today. Social Sector Expenditure in India and HDI. Since independence the Central and State governments in India are spending huge amount of money on social sector development. This social sector expenditure in India includes expenditure on education, health and family welfare, rural water supply, women and child development, welfare of scheduled cast, tribal welfare, welfare of disable etc. It is necessary to study the impact of these large expenditure on human resource development by taking into consideration HDI. It is against this overall backdrop, the present research paper studies the functional relationship between social sector expenditure and human development index in the context of major states in India and their ranking. II. Objectives of the Study The major and important objectives of the present study are as below 1. To study the concept of human development index (HDI) 2. To study the ranking of states in India regarding HDI. * Associate Professor and Head, Dept. of Business Economics, D. R. Mane Mahavidyalaya, Kagal Dist Kolhapyur. MH) **Research Student Dept of Economics Shivaji University, Kolhapur. 3. To study the ranking of states in India in the context of social sector expenditure and their corresponding growth rate of NSDP. 4. To find out functional relationship between social sector expenditure and HD. 5. To draw implications for the improvement in HDI ranking III. Hypothesis of the Study The hypothesis of the present research study is as follows 1. ‘Social Sector E xpenditure and Economic Growth rate together play a vital role in Human Development in the States in India. IV. Database and Research Methodology The present research study exclusively relies on the secondary data. The necessary data has been collected from the following sources 1. Reserve Bank of India : Monthly Bulletin: Issues related to finances of state 2. RBI: Report on currency and Finance: Vol. I amp; II 3. RBI : Handbook. 4. Government of India, Ministry of Finances, Indian Economic Statistics 5. Government of India, Economic Division, Annual Economic Survey. 6. Directorates of Economics and Statistics of respective State Governments and Central Statistical Organizational (C. S. O). 7. Publications of planning commission . Similarly the relevant data and literature published in government reports, books and journals were referred and is duly acknowledged wherever the reference of the same is incorporated in the paper. Study covers 15 major states and all states total. The period covered in the present paper is from 1981 to 2005, wherever necessary statistical data after 2005 is also presented. The following statistical techniques are used for data analysis. i. Ratio Analysis ii. Growth Rate iii. Variations V. Concept of HDI Growth in National Income (GNP) or per capita income considered as indicator of economic growth does not represent a true and adequate measure of welfare and economic development of the people of a country. Therefore a need was felt to put forward index which should truly and correctly reflect the level of economic welfare and economic development of a nation. Thus Human Development Report 1997 states, ‘Income is clearly only one option that people would like to have, though an important one , but it is one the sum total of their lives. Income is also a means, with human development the end. ’ Human Development Index is a composite measure of three aspects of good life and well being. Three questions were raised regarding what people want in order to have a good and cherished life. Answers provided were; i. People want to lead a long and healthy life. ii. They want to be educated and to acquire knowledge. iii. They want to have access to resources, so that they enjoy a decent standard of living. In other words they want to have per capita income which is high enough to ensure them a decent standard of living. The concept of human development has been developed by a number of economists including Dr. Mahbul-ul-Huq and Nobel Laureate Dr. Amartya Sen. Explaining the concept of human development Prof. Amartya Sen, writes, the process of widening people’s choices and the level of wellbeing they achieve are the core of the notion of human development. But regardless the level of development the three essential choices for people are to lead a long and healthy life, to acquire knowledge and to have access in the resources needed for a decent standard of living. Human development does not end there, however other choices highly valued by many people range from ‘political, economic and social freedom to opportunities for being creative and productive and enjoying self respect and guaranteed human rights. ’1 It is clear from this that in the concept of human development Prof. Amartya Sen includes the social, economic and political freedom as well as human rights they enjoy in a country. Therefore the latest Human Development Report consider and assess the performance of the countries in respect of these questions of freedom and human rights along with the three indicators or criteria mentioned below. . Longevity, which is measured by Life expectancy at birth, means how many years a newly born infant can hope to live in this world. ii. Knowledge: which is measured by the weighted average of adult literacy and mean years of schooling. Amartya Sen, Development as Freedom, New York, Alfred Knopf, 1999 Two things must be noted in regard to Human Development Index (HDI). First, it measures relative and not absolute level of Human Development. Second the focus of Human development is on the goals or ends of development which are a. Long and healthy life b. The level of knowledge c. A decent standard of living and not real per capita income alone. In fact Human Development Index is a composite measure of well being based on life expectancy, literacy level and real per capita income. It is important to note Human Development Index is used for ranking of different countries on a scale of 0 (lowest Human Development ) to 1 ( highest Human Development) However , there are some other sub-concepts of HDI which are also developed by UNDP. These sub-concepts are named a. Human Poverty Index (HPI 1) for developing countries b. Human Poverty Index (HPI 2) for selected OECD countries. c. Gender Related Development Index (GDI) d. Gender Empowerment Measure (GEM) But the present research study is confined to HDI ranking of the states and their respective social sector expenditure for the sake of simplicity. Therefore these concepts are not elaborated here. VI. A) Social Sector Expenditure: Meaning Under the constitution of India , state governments have been entrusted with the important function of maintaining law and order and also with many Nation building activities such as education, public health and medicine, irrigation and agriculture. Like the union government, the state government too have adopted the policy of building up welfare states that is raising agricultural and industrial prosperity of the states and looking after the needs of the poor and the downtrodden. The State expenditure is classified under two heads namely, Development Expenditure and Non-development Expenditure. The Development expenditure is divided into two parts viz – Social and Community Services and Economic Services. Expenditure on Social and Community Services comprise expenditure incurred on such services as education, family planning and public health, housing, labour employment, social security and welfare and natural calamities. These form an essential part of the expenditure of the states. The expenditure of the States on these Social Services leads to social sector development. Social development is a process of transformation in values institutions and practical brought about with the deliberate use of instruments of policy of planning with the active participation of the concerned people for the purpose of raising their levels or living and quality of life. Thus social services confer a sensitive advantage on community and the more the development of these services the happier and better off would be the people in the country; therefore it is essential to analyse. Social sector expenditure of the States and achievement in human development.