Overview of the Development

Context of India

Naresh C. Saxena
Former Secretary, Planning Commission
naresh.saxena@gmail.com

1
1
 Subjects covered in this presentation
• Growth & inequality
• India’s progress on poverty, hunger, and MDGs
• The job crisis
• Gender empowerment
• Why this disconnect between growth and social
indicators?
• Governance issues
New goals for UN

2
 India
• 16.7% of the world’s population; 2.4% of its surface area
• A diverse country of 1.3 billion people, speaking 122 languages!
• 79.8% Hindus, 14.2% Muslims, 2.3% Christians, 2.00% Sikhs, 0.7%
Buddhists & Others
• 16% Scheduled Castes (ex-untouchables), 8% Scheduled Tribes
(indigenous), and 41% Other Backward Castes (OBCs) which
includes Muslims too
• Unequal social structure due to caste system, but equality and
affirmative action guaranteed by Constitution
• A vibrant multi-party political democracy / civil society / Free Press /
Strong Judiciary
India is a multi-ethnic society with strong colour prejudice
3
3
Legitimacy of ethnic group solidarity and
politics

• Regional and linguistic Highest

• Women
• Scheduled Tribes
• Scheduled Castes
• Backward Castes
• Muslims Lowest

4
 Legitimacy of Indian ethnic groups
Whether political Whether social
consensus consensus
Regional Yes Yes
pluralism
Caste Yes No
reservation
More women No Yes
in parliament
Quota for No No
Muslims
5
 Share of rural & urban population
Total in Rural Urban
billion
1901 0.24 89% 11%

1951 0.36 83% 17%

2011 1.21 69% 31%

2021 1.38 55% 45%

6
7
8
8
 ANNUAL GDP GROWTH %
8
7
6
5
4
3
2
1
0
1920-47 1950-60 1960-70 1970-80 1980-90 1990-00 2000-11 2011-18
9
 0
1
2
3
4
5
6
1920-47

1950-60

1960-70

1970-80

1980-90

1990-00

2000-11

2011-19
Population

10
Per Capita Income
 Per Capita Income growth 1980-2014
Full population 187%

Bottom 50% 89%

Top 10% 394%

Top 1% 750%

Top 0.1% 1138%

11
13
14
 During 2004 to 2014
• Government of India passed a series of legislations to
promote rights-based development, such as Right to
Employment, Right to Information, Right to Education,
Forest Rights Act, Right to Food, Right to Property for
Women, Health Mission, etc.
• Considerably increased funds during 2004-14 for social
sector, as well as for safety-net programmes (food and
kerosene subsidy, pensions, wage employment)

Present government has not diluted these programmes

15
 During 2014-19
• Strong push for rural sanitation, roads, electrification, and
LPG cylinders for rural homes
• Promote ‘cooperative federalism’ by increasing states’
share in central taxes from 32% to 42%
• India’s rank in ‘ease of doing business’ improved from 134
in 2014 to 77 in 2018
• Politics of right wing Hindu nationalism leading to feeling of
insecurity among religious minorities
• Intolerance towards civil society, foreign funding of NGOs
• Increasing agrarian distress & unemployment

Planning Commission replaced by NITI (National Institution

for Transforming India) Aayog

16
Poverty headcount ratio at $1.90 a day
90
80
70
60
50 China
40
India
30
20
10
0
1981 1984 1987 1990 1993 1996 1999 2002 2005 2012 2017

17
 Incidence of Poverty and Its Rate of
Decline during 1993–94 to 2011–12
Social group 1993–94 2011–12 Rate of
annual
decline
ST 62.6 43 2.1

SC 60.1 29.4 3.9

OBC 39 20.7 3.5

Others 39 12.5 6.1

All 45.1 21.9 3.9

18
 Poverty by Religious Groups

60
50
Christians
40
Hindus
30
20 Muslims

10 Sikhs
0
1993-94 2004-05 2009-10 2011-12

19
 -10
0
10
20
30
40
50
60
Kerala 70
Himachal Pradesh
Punjab
Andhra Pradesh
J&K
Haryana
Tamil Nadu
Rajastan
Gujarat
Maharastra
West Bengal
Karnataka
Uttar Pradesh
Madhya Pradesh
Assam
Orissa
Bihar
India
2012
decline 1993-
% of poor in 2011-12, and decline since 1973

20
poverty in 2012
decline 1973-93
Poverty in 2011-12

21
Year-on-year Growth in Agricultural and
Non-agricultural Rural Wages

22
 Global Hunger Index
Rank Country 1990 1995 2000 2005 2018

29 China 25.1 23.2 15.9 13.2 7.6

37 Thailand 28.4 22.3 17.6 13.6 10.4

49 Vietnam 44.6 38.8 30.3 24.6 16.0

72 Nepal 44.5 40.3 36.9 31.6 21.2

84 Sri Lanka 31.3 29.7 27.0 25.9 17.9

88 Bangladesh 52.2 50.3 38.5 31.0 26.1

103 India 48.1 42.3 38.2 38.5 31.1

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 Progress of MDGs in India
Indicator Value MDG
target
% population below poverty line 22 18 On track

% under-nourished children (< 3 years) 30 26 Off track

Literacy rate of 15-24 years 82 100 Off track
Ratio of girls to boys in primary education 1 1 On track
Ratio of girls to boys in secondary education 0.86 1 Off track
IMR (per 1000 live births) 42 27 Off track
MMR (per 100,000 live births) 178 108 Off track
Households using toilet facilities (%) rural 38 55 Off track
(Census 2011)
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 Some MDG indicators for India and other poor countries

India Bangla Viet

desh nam
Infant Mortality Rate 1990 88 103 39
2016 35 28 17
Underweight children under 5 36 33 12
Immunized against measles 74 96 96

Rural population with adequate

40 92 79
sanitation (2016)
Attendance ratio of girls to boys in
83 116 93
secondary school (net) (%)
Total Fertility Rate (TFR)
2.3 2.1 2.0
25
 Employment
• Unemployment rate increased from 2.6% in 1977-78 to
6.1% in 2017-18
• Among urban males aged between 15 and 29,
unemployment stood at 18.7%, as opposed to 8.1 in
2011-12. Among urban females, it was 27.2% in 2017-18
as against 13.1 percent in 2011-12
• Fall in the number of labour force (LFPR) showing
massive growth in the number of those who are neither
employed nor looking for work
• LFPR stood at 49.8 per cent in 2017-18, falling sharply
from 55.9 per cent in 2011-12
• The average year-on-year wage growth during 2014 to
2018 was a mere 0.5 per cent in real terms
26
 Changes in employment
1983 1999-00 2017-18

Total population in million 723.3 996.1 1347.0

Share of 15-59 years’ 58.2% 58.8% 60.3%

population in total

Total employed in million 303.8 399.5 474.3

Employed as % of total 42.0 40.1 35.6

population
Employed as % of 15-59 72.1 68.2 58.8
years
27
 Relationship between Sector and Type
of Employment 2011-12
Total Employment (million)

Informal Formal Total

Unorganised Sector 370.8 1.9 372.7

Organised Sector 68.1 33.5 101.6

Total 438.9 35.4 474.3

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 Child Sex Ratio in Age Group 0-6
Census 2001 and 2011 (p)

2001 2011

India: 927 India: 914

30
Our Census, Our Future
% of 15-59 age women in work force
35
30
25
rural
20 urban

15
10

2016-17
1977-78

1987-88

1999-00

2007-08

31
 Labour force participation rate in 2010 Age 25–54

Malaysia

Mexico

Indonesia

United States
Female
Brazil
Male
Thailand

China

India

0 20 40 60 80 100

32
 India is one of the worst places in the world to be a woman

Birth Childhood Adolescence Youth Middle Age Old Age

Sex  Education: 20-  Sexual  Honour Killings:  Sexual  Widow-
Selec- 40% of girls do Violence: Half Harassment: hood:
of children  Dowry:
tion: not attend
experience  Divorce:  Lack of
50 primary school sexual abuse;  Domestic Abuse: Old-Age
million in poor states 35% of Indian • Political Dis- homes:
girls  Sanitation: women suffer empower
are  Child Marriage: 90% of women physical violence ment:
missing use ashes and at the hands of Representati
 Girl Labour: husks while their partners on of women
19,20,000 girls menstruating; in Parliament
is 11%, lower
are working
 High drop out than sub-
rate for girls Saharan
 Child Africa
Trafficking:
Why this disconnect between growth and social indicators?
• Inadequate revenues & hence low social sector expenditure
• Lack of supervisory staff
• Inflated reporting & absence of performance appraisal –
field reports are not verified, quality is not measured
• Lack of political /administrative/ panchayat accountability
• High absenteeism of staff
• Outcomes are not measured regularly
• Inadequate M&E
• Archaic procedures
• Short tenure of bureaucracy
Poor information management
34
 Net ODA per capita $

Afghanistan 172
Vietnam 46
Nepal 31
Sri Lanka 21
Bangladesh 17
Pakistan 12
India 1

0 50 100 150 200

35
Annual Expenditure in India in trillion Rs
Union Government 2015-16 17.8
State Governments 2014-15 21.5
------
Total 39.3
Out of which
Net ODA 2013-14 .07

Gross ODA was .38 trillion Rs, but GOI returned 0.28 as loan
repayment, and .03 as interest payment
GOI likes to project itself as a donor, and not as a recipient of
aid
Donors’ role in policy making is NIL
36
 Tax-GDP for Selected Countries
Developed Countries Middle income Countries

Sweden- 50.1 Brazil- 34.4

Denmark- 50.8 Turkey- 24.5
France- 44.7 Russia- 32.3
Finland- 54.2 South Africa- 26.9
UK- 34.4 Nepal- 23.1
USA- 27.1 India- 16.8

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 Expenditure on education as % of GDP

India
Bhutan
Mongolia
Vietnam
South Africa
Kenya
Thailand
Ghana
Denmark
0 2 4 6 8 10

38
Public Expenditure on Health
as % of GDP in 2011
India
Bangladesh
China
Bhutan
South Africa
Brazil
UK
Cuba
0 2 4 6 8 10

39
39
 % Children in schools in Std V who
80
can read Std II level text
75
70
65 Government
schools
60
55 Private schools

50
45
40
2008 2010 2012 2014 2016 2018
Staff present at Community Health Centres

Andhra Pradesh

Uttar Pradesh
Paramedical+Technicians

Bihar Medical Officers +Specialists

Rajasthan

0 20 40 60 80

41
 NREGA exp in 2017-18 per rural poor
India
KERALA
J&K
HP
TAMIL NADU
AP+Telan
UTTARAKHAND
RAJASTHAN
WB
PUNJAB
CHHATTISGARH
KARNATAKA
MP
ODISHA
HARYANA
ASSAM
MAHARASHTRA
JHARKHAND
GUJARAT
UP
BIHAR
0 2000 4000 6000 8000 10000 12000 14000
42
Employment created in 2018-19 per rural poor
India
KERALA
AP+TELAN
TAMIL NADU
J&K
RAJASTHAN
UTTARAKHAND
WB
CHHATTISGARH
PUNJAB
KARNATAKA
MP
ODISHA
ASSAM
MAHARASHTRA
GUJARAT
JHARKHAND
UP
HARYANA
BIHAR
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0
43
 Archaic land laws?

• Land cannot be leased out in many states

• Landuse cannot be changed unless permitted by DM
• Agriculturists cannot sell to non-agriculturist in some
states
• Marginal farmers cannot sell their land in UP, Delhi, etc
 Level wise % of functionaries
receiving salary on time (Jharkhand)

87
62

18

District Block GP

45
 The urban poor in Delhi
• Delhi has about 0.6 million rickshaw pullers and more
than 0.3 million vendors, mostly run by first-generation
rural migrants.
• But the city government has put a limit of 99,000 on
licences to pull rickshaws. Thus, about 80% rickshaws
operate illegally in Delhi. No limit on the number of cars.
• A vast majority of street vendors have no license either.
They all operate outside the legal economy, harassed by
the police and municipal authorities.
Government passed a new law in 2013 to facilitate
their livelihoods. 10 million vendors would benefit

46
 % of severely malnourished children in
2013-14 according to
State Government UNICEF
Maharashtra 2.3 6.0
Gujarat 0.8 10.1
Jharkhand 0.5 16.0
Orissa 1.4 11.0
Uttar Pradesh 0.8 12.9
West Bengal 0.7 8.9
India 2.1 9.4
47
 Maharashtra Moderately and severely
underweight Under-5 children (%)
District Evaluated reported
2015-16 June 2015
Buldhana 41.30 9.16
Dhule 47.50 11.47
Gondia 40.10 7.49
Jalna 43.60 7.41
Nashik 42.90 10.25
Osmanabad 44.50 8.54
Parbhani 42.30 6.94
Washim 42.90 6.28
Yavatmal 49.10 9.09
 A study by NORWICH (UK), 2017

• 'ICDS in Uttar Pradesh reveals overwhelming

implementation failures as corruption and high staff
absence from duty render the ICDS near dysfunctional.
• Anganwadis are usually closed, and the Take Home
Rations (THR) are avenues for large-scale financial
misappropriation. The majority is sold as cattle feed.'
• People have started calling it “Pashu Aahaar” rather
than “Paushtik Aahaar”.

49
 ICDS in Gorakhpur (UP)
• 86% of budget spent on buying RTE (Ready to eat food),
with only 100 calories, as against a norm of 500 calories
• 63% of food and funds are misappropriated
• RTE is stored in unhygienic conditions, and lacks taste
• Half of RTE ends up as cattle feed
• Only 5 out of 35 Centres visited were running on a
regular basis
• Each Centre pays Rs 2000 per month as bribe to the
Supervisor
-National Human Rights Commission, March 2011

50
 Governance &
the Civil Service
 Administrative units
Centre

• States 29
• Districts 670
• Blocks 8500
• 137 City Corporations, 3491 city Municipalities
• Panchayats 225,000 village councils
• Villages 620,000
• Habitations 1,400,000 (roughly 120
households)
With 28 major languages, and ethnic diversity (caste, tribe,
and religion), India is a difficult country to govern
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52
 The Central Government
• At the Centre, there are about 50 Ministries
• Cabinet Minister heads a Ministry
• Secretary heads a Department – Additional Secretary
(AS)/ Joint Secretary (JS)/ Director/ Deputy Secretary/
Under Secretary/Desk Officer/Section Officer.
• Parliamentary Standing Committees
• Financial Adviser in each Ministry
• Senior officers rotate between Centre and States

53
53
 The State Government

• Chief Secretary has Departmental Secretaries at the

State level – equal to JS/AS at Centre. They have
Special/Additional/Deputy/Under Secretaries to support
them.

• District is headed by District Magistrate, who is very

powerful. He controls line department officials at the
district level, and is accountable to State Governments
• In addition, there are elected members to local bodies
and state Assemblies

54
54
 Why is GoI important ?

• Invests large amounts of Plan funds in poverty

reduction sector ( livelihood, education, social security,
health).
• Single window for External Development Partners –
funds cannot go directly to States.
• Unlike states, greater security of tenure for key officers
• Better interaction with civil society/ professionals

Greater professionalism
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55
 Minimum Government?
• India’s civil service is not large by international standards
• But there is a skills imbalance, and costs are rising sharply
• Too many support staff, too few line staff
• Support staff is permanent, line staff is contractual
• Supervisory regular staff is awfully short
• High salaries have not improved service delivery
Burden of weak supervision falls heavily on the poor
56
56
57
57
 Average Government Wage as
Multiple of per capita GDP

Overall
India
Africa
MENA
Asia
LAC
OECD
ECA
0 2 4 6 8
58
Civil Service Strength by Divisional Status
1970-2008 (as % of the total)
Singapore India
Division 1970 2008 (central
govt)
I 5.3 52.1 3
II 27.3 28.2 8
III 29.7 14.1 63
IV 37.7 5.6 26
Total 54,195 67,814 35 lakhs

59
ESTIMATED GOVT EMPLOYMENT ('000)

Local Grand
Year Central State Quasi Govt. Bodies total
Govt. Govt. Central State

2000-01 3261 7425 3291 2901 2261 19138

2011-12 2520 7184 3449 2349 2107 17609

 Total number No of govt
of Govt. servants per
Population servants 1000
2011 (crores) (lakhs) population

Maharashtra 11.2 26.3 23.5

Tamil Nadu 7.2 15.8 22.9

Bihar 10.3 2.6 2.5

UP 20.0 11.39 5.7

61
 Despite high salaries India’s
administration is characterized by high
corruption and poor program delivery

‘Indian government looks after service

providers, but not service provision’
- World Bank

62
62
 New goals for UN
• Shift balance from delivery to knowledge based advocacy
• Focus administration’s interest on outcomes by improving
budget utilisation and outcome monitoring
• Concentrate on marginalised peoples, such as tribal women
• Build the M & E capacity of state governments
• Help in procurement & recruitment
• Nurture Intermediate Organisations for Advocacy
• Capacity building in design, monitoring, and assessment of
programmes
• Create forums where systemic issues can be debated
Inform India about best global practices
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64
 Questions on which UNDP should be
providing answers to Government
• Why are Bangladesh, Bhutan, and Vietnam doing better
than India?
• Why are poorer states not able to spend GOI money?
• What explains differences in achievement of states with
similar per capita income, such as Jharkhand and
Chhattisgarh?
• What changes are needed in the way govt monitors
schemes and outcomes?
• In what manner states can improve personnel
management, such as recruitment, postings, and
promotion?

65
65
66
 20
40
60
80

0
100
120
JHARKHAND
MADHYA PRADESH
ORISSA
CHHATTISGARH
BIHAR
RAJASTHAN
UTTAR PRADESH
TAMIL NADU
KARNATAKA
ANDHRAPRADESH
GUJARAT
MAHARASHTRA
J&K
WEST BENGAL
MEGHALAYA
UTTARAKHAND
HARYANA
ASSAM
HIMACHAL PRADESH
NAGALAND
PUNJAB
KERALA
by state governments

TOTAL
census
Coverage of toilets by Census 2011 and

67
Fudging by States
68
 Performance of Assemblies & Parliament
State Assembly Average number of days
of sittings per year
Uttar Pradesh 22

Punjab 19

Manipur 24

Uttarakhand 19

Haryana 11

15th Lok Sabha 77

69
 Citizen-politician linkages
• Patronage: jobs, contracts, transfers, school placements
to benefit individuals
• Clientelistic: policies to deliver benefits to specific
groups on the basis of caste, religion or economic
interest (reservations, sugar farmers, labour unions)
• Programmatic: universal primary education, health
delivery, public order & security, effective judicial system

70
Tax receipts and interest payment – GOI (in billion Rs)

Year Tax receipts interest payment

1990-91 430 215 (50%)
2001-02 1,337 1,075 (80%)
2007-08 4,318 1,710 (40%)
2012-13 7,711 3,198 (42%)
2015-16 9,198 4,561 (50%)
2017-18 12,424 5,289 (43%)

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71
 Central Plan Outlay in billion Rs

1999-00 2014-15 2015-16

Rural Development 85.52 725.09 641.00

Elementary Education 28.52 485.85 357.82
Health & Family Welfare 41.82 242.03 180.00
Women & Child
12.50 198.18 90.00
Development
Water & Sanitation 13.10 150.25 60.00
Agriculture 18.65 164.63 108.00
Transfer of funds from Centre to States in
2014-15 (in trillion = lakh crore Rs)
Finance Commission 4.25
Planning Commission (NCA) .29
Centrally Sponsored Schemes 3.01
__________
Total 7.55

(excludes subsidies on food, kerosene, and fertilisers,

and loans through postal savings)

Should transfers to states be tied or untied? Based on

a formula, or adhoc? 73
 Index of Population, GDP and Foodgrain Production (Year
1951=100)

2000
1800 Population
1600
1400
1200
GDP
1000
800
600
400 Foodgrain
200 Production
0
1951

1961

1971

1981

1991

2001

2012
 Income Shares in India (in %)

1992 2000 2005 2010

Bottom 20% 8.90 8.70 8.35 8.46

Top 1% 15.79 15.77 17.60 17.38

75
 Action Points for UNDP -II
• Greater attention to Jharkhand, Chhattisgarh, MP
• Help states in improving flow of funds & fully utilise
central assistance
• Encourage inter-district competition by measuring
performance & ranking of panchayats
• Inter-state studies to put states in a competitive frame of
mind
• Concentrate on measuring outcomes, absenteeism
• Build capacity of ATIs & research organisations
• Strengthen Public Service laws

76
77
Strengthening Panchayats &
Achieving Community
Empowerment

78
 An ideal panchayat should be
• Effective
• Provide sustained benefits
• People should identify themselves with it
• Poor, esp. women, should feel included
• Transparent decision making
• Minimum corruption
• Look after common property

79
 73rd Amendment - Inadequacies
 Power & functions of Gram Sabha not defined.
 Actual devolution of powers to panchayats left to
the discretion of the State Governments.
 The expression ‘institution of self government’
not elaborated
 Re-election is not dependent on the good work
done by the office bearer
 Intermediate/district panchayat Presidents are
indectly elected

Political reluctance to give up control over

implementation and funds
80
State Villages per Panchayat
Haryana 1.2
Tripura 1.2
Kerala 1.2
Punjab 1.2
Delhi 1.3
Gujarat 1.4
Andhra Pradesh 1.5
Uttar Pradesh 1.5
Maharashtra 1.6
Sikkim 2.9

81
State Villages per Panchayat
Arunachal 4.0
Madhya Pradesh 4.1
Jammu & Kashmir 4.7
Rajasthan 5.1
Bihar 6.6
Himachal Pradesh 7.3
West Bengal 11.7
Orissa 11.8
Assam 29.1

All-India 2.8
82
 Aggregate Vertical Imbalances (2007-08)

Country Revenues % Expenditures %

National/Federal 66.19% 47.70%

State/Provincial 31.31% 45.19%

Local 2.5% 7.11%

Total public R&E 100% 100% 83

 Panchayats in UP
• Regular Gram Sabha meetings not held
• In almost all cases, Pradhans (elected chiefs), Village
Development Officers and middlemen decided the list of
beneficiaries
• Thumb impression of females taken after the meetings
• Out of 4 women led panchayats, only in one case the
lady Pradhan was active, elsewhere the husbands
performed all functions
• SC Pradhans acted as rubber stamps for upper caste
people
• Weaker pradhans were less autocratic and relied more
on community support

84
 Implication of construction fixation
• MGNREGA and other similar construction oriented
schemes require a contractor and wage labour
• These do not require participation at equal terms
• Panchayat activities get reduced to collusion between
Sarpanch and block staff
• Flow of funds from district/ GOI not dependent on good
work or mobilisation
Panchayats are not active in education, health, SHGs,
watershed, pastures and forestry programmes, which
require people to come together as equals

85
 Village Panchayats to raise revenues

• PRIs hesitate to levy and collect taxes.

• 14th FC mandates it.
• Panchayats to be trained in financial & social audit
• UNDP to help the states in best national & international
practices

SIRDs need capacity building too

86
 Capacity building of panchayats
• Transfer taxation powers, 3 Fs
• Link devolution with their performance & with transfer of
powers
• Encourage peer review & stakeholder audit
• Grade panchayats & give untied funds to the best
• Increase their powers and responsibilities in education,
health, watershed, and pastures
• Make village panchayats appointing authorities for education
& health staff
• Strengthen gram sabhas
What role for MLAs?
Do we really require three tiers?
87
 India: Urban Housing Shortage

• EWS (Poorest) 21.78 Million

• LIG (Poor) 2.89 Million
• MIG/HI (Middle & Upper class) 0.04 Million
Total 24.70 Million
98 per cent of shortage in Urban Housing under
EWS & LIG Categories. However most new houses
are being constructed for the middle & upper class.
Iniquitous distribution of urban space
88
 Housing
• Promote rental schemes
• Revive the scheme of night shelters
• Reserve at least 30% of all new housing space for the poor, and
make it part of mandatory reforms
• All new housing schemes to construct 30% of affordable houses
of 25-30 sq m for the poor
• Pass a law for the contractors to pay for space for the labourers
in the night shelter before their tenders are considered
Tax vacant property heavily

89
Relationship between governance &
civil service
A good civil service is necessary but not
sufficient for good governance; a bad
civil service is sufficient but not
necessary for bad governance

90
 Who are the deprived in rural India (in
millions)?
Only zero room or one room with no bricks (D1) 23.7

No adult member between age 16 to 59 (D2) 6.5

Female headed households with no adult male member (D3) 6.9

Disabled member and no able bodied adult member (D4) 0.7

SC/ST households (D5) 38.5

No literate adult above 25 years (D6) 42.1

Landless households as manual casual labour (D7) 53.7

91
Tax collection as % of GDP

92
Share of Global GDP (in current US$)

93