STWR - Share The World's Resources

Search Newsletters Webfeeds
  • Decrease font size
  • Default font size
  • Increase font size
STWR has launched a new website:

This older website is no longer being updated and is due to be closed down within the next few weeks.

All of STWR’s own content has been transferred to the new website, but most of the third-party content currently on the old site will soon be unavailable.

If you have any questions, contact

India, China & Asia

Latest             News Alerts
25 Years of Development in India: Who Has Benefited?
Print E-mail

India’s economic growth over the past 25 years has come at a cost. Cuts in expenditure on public services and unsustainable use of natural resources has left the majority of the population poor and surrounded by environmental degradation, says Frontline magazine.

Economy: Fragile Growth - C. P. Chandrasekhar, Frontline (Volume 27, Issue 1)

Environment: Sustainable Future? - Ashish Kothari, Frontline (Volume 27, Issue 1)

Public Health: Far From Healthy - Venkatesh Athreya, Frontline (Volume 27, Issue 1)

4th January 2010

Economy: Fragile Growth

January 2010 - C. P. Chandrasekhar, Frontline (Volume 27, Issue 1)

India's economic development over the past 25 years has been a long journey down the road to a more market-driven and globally integrated “neoliberal” regime. By dismantling controls on investment (domestic and foreign), production, prices and trade; by deregulating financial sector operations; and by privileging private sector activity; the nature of the development trajectory India pursues has been fundamentally altered when compared with the first three decades after Independence. Advocates of this transition say the journey is still incomplete though none can deny that a regime change has already occurred.

The beginnings of the transition can be traced to the Indian government’s decision in 1981 to approach the International Monetary Fund (IMF) for an SDR 5 billion (roughly $5.8 billion) Extended Financing Facility loan, quoting among other reasons the need to restructure the economy in response to the oil shocks and earn the foreign exchange needed to pay for the country’s oil imports. In practice, it turned out that India did not really need that foreign exchange, with the government even choosing to forgo the last instalment of the line of credit equal to about $1.1 billion. The Bombay High oil and gas bonanza, which the government exploited in full, and remittances from and exports to West Asia steadied the balance of payments (BoP). What the loan did achieve, intentionally or otherwise, was that it whetted the appetite of the government and the elite of the country for borrowed foreign exchange to import the intermediates and capital goods required to produce commodities hitherto considered non-essential and, therefore, not easily available under the protectionist regime with state intervention instituted after Independence.

It was this appetite that was unleashed through the liberalisation of trade in the 1985 Budget under Prime Minister Rajiv Gandhi. Combined with deficit-financed spending, this release of the pent-up demand for import-intensive manufactures not only raised the rate of growth of the system but widened the current account deficit. This deficit, which earlier was financed with borrowing from the IMF, was now financed with external commercial borrowing that India, like many other “emerging markets”, had gained access to. Among the consequences was not only the burgeoning of India’s stock of external debt and a rise in its debt service ratio but a rise in the share of short-term debt in the total. Unfortunately, by this time international banks overexposed to emerging markets had burned their fingers many times since the Mexican debt crisis of 1982. Not surprisingly, even when India’s debt-to-gross domestic product ratio was much lower than in many other developing countries, the fact that debt service costs were a rising proportion of current receipts of foreign exchange provided the basis for a growing reluctance on the part of lenders to extend new debt and rollover past short-term debt. The result, in an increasingly open economy, was a sharp decline in reserves, leading to a BoP crisis when those reserves fell to levels equal to a few weeks’ imports.

It was at this point in time that the Indian government chose to take another IMF loan of around $2.5 billion (besides borrowing against its gold reserves) and accepted conditionalities that served as the spur for an engineered shift in the direction and content of India’s development strategy. That shift is still under way despite having traversed much distance. Advocates of this shift, within and outside the government, point to the remarkable improvement in India’s GDP growth performance since the 1980s (when creeping liberalisation began), from a 3 per cent-plus rate of growth to 5 per cent-plus initially and, subsequently, to close to 9 per cent over a five-year period preceding the recent slowdown. That growth has occurred in what is seen as a virtuous context in which there are some limited signs of “fiscal correction” in the form of a reduction in deficit-financed government spending and no signs of a return to the BoP difficulties of the 1980s and earlier. Combined with the obvious opulence visible in metropolitan and urban India, evidence of a more generalised revolution in access to communications as epitomised by the ubiquitous cellphone, and a services boom that has absorbed a significant number of educated middle- class Indians, this growth is presented as proof of the success of neoliberal “reform”.

There are, however, four features of this growth performance that are disturbing. The first is its rather uneven and imbalanced sectoral distribution. Growth has only marginally touched agriculture, with evidence that over a prolonged period starting in the early 1990s, the per capita output of foodgrains was on the decline for the first time in the country’s post-Independence history. Around 55 per cent of the increment in GDP over the last decade has come from the services sector, with less than half of that contribution being due to an expansion of organised services, public administration and defence. Since unorganised services consist largely of low-paid work accepted for lack of alternative employment opportunities, the burgeoning of this sector as evidenced by the statistics should be an indicator of growing distress rather than progress and development. And organised manufacturing growth has been volatile, with an increasingly small number of sectors accounting for a very high share of the growth occurring in this sector. In the case of 52 three-digit industries, the top three in terms of rates of growth during the period 1993-94 to 2003-04 accounted for 38 per cent of the growth in all industries, with the figure for the top five rising close to 55 per cent and for the top 10 to almost 75 per cent.

The second feature is that unlike the case of China, India’s large foreign exchange reserves, which are seen as a sign of economic strength, are not owing to current account surpluses earned through exports or garnered from remittances but because of large inflows of capital in the form of portfolio investments and external commercial borrowing by the private corporate sector. This kind of accumulation of reserves is not only expensive (as measured by the difference between the rate of return paid by residents to foreign investors in the Indian economy and the interest earned from the investment of reserves by the Reserve Bank of India) but is also unstable and prone to rapid depletion through capital outflows.

A third feature of this growth is that it rests on tenuous stimuli. Fiscal reform has meant that the role of public expenditures as a stimulus for growth is on the wane, excepting for the most recent period when the implementation of the Sixth Pay Commission’s recommendations combined with post-crisis initiatives to generate a spike in expenditures. Further, though there has been some improvement in India’s export performance, exports are not large enough to constitute the basis for manufacturing growth. If there is a new stimulus to growth it appears to come from credit-financed investments in housing, credit-financed purchases of automobiles and credit-financed consumption.

One consequence of financial liberalisation and the excess liquidity in the system created by the inflow of foreign capital has been the growing importance of credit provided to individuals for specific purposes such as purchases of property, automobiles and consumer durables of various kinds. Not only has credit expanded at a scorching pace, resulting in a sharp increase in the bank credit-to-GDP ratio (it increased from 27 per cent at the end of March 1997 to about 60 per cent by the end of March 2008), but the share of personal loans in total non-food credit has risen from a small magnitude in the early 1980s to around a quarter in 2008.

This implies a degree of dissaving on the part of individuals and households. It also implies that financial institutions, which are willing to provide such credit without any collateral, are betting on the inter-temporal income profile of these individuals, since they are seen as being in a position to meet their interest payment and amortisation commitments on the basis of speculative projections of their earnings profile. These projections are speculative because with banks and other financial institutions competing with each other in the housing and consumer finance markets, individuals can easily take on excess debt from multiple sources without revealing to any individual creditor their possible overexposure to debt.

Since there is a strong speculative element involved in lenders providing credit and borrowers increasing their indebtedness, the state of confidence of both parties matters. When such confidence is “good”, we can experience growth or even a mini-boom. When such confidence is low, we can experience recessionary conditions. The evidence increasingly is that such confidence is on the decline. Not only has the RBI cautioned banks against increasing their retail loan exposure, but according to Financial Times (November 23, 2009), Moody’s rating agency has issued a report flagging deteriorating credit conditions and rising problem loans in India’s banking sector. During the fiscal year ending March 2009, the level of gross non-performing loans for commercial banks rose by 22.5 per cent, almost double the 11.9 per cent recorded during the previous year. This could lead to an end of the credit-financed boom.

Finally, a fourth feature of the process of growth is that it has bypassed large sections of the population. Even the official estimates of the government of the proportion of the population below the poverty line, which currently stands at around 28 per cent, is to be revised upwards to 37 per cent on the basis of a more appropriate measure of the poverty line. And the National Commission on Enterprises in the Unorganised Sector has estimated that those earning less than Rs.20 a day per capita amount to 77 per cent of the total. This is, of course, the range in which income poverty lies. Combine it with deprivation in the form of hunger and inadequate access to drinking water, sanitation, health facilities and education and the picture is indeed appalling.

The persistence of deprivation of this magnitude in a country that has seen a creditable rate of growth over three decades has two implications. One is that significant increases in inequality must have accompanied this growth to ensure such marginalisation. The other is that the cumulative increment of GDP delivered through this growth over a quarter of a century has been inadequate to help overcome underdevelopment, let alone move closer to developed country status. These outcomes are disturbing given the evidence that this growth is fragile. We should not forget that even among those that were accorded “miracle economy” status for a time, there have been very few developing countries (such as South Korea) that have indeed graduated to becoming a developed country. Most of them have lost their miracle status. India’s “moderate-miracle” phase, too, may come to an end before the vast majority of its population tastes the benefits of growth.

In the midst of this otherwise disappointing scenario, there have, however, been some grounds for optimism. Most importantly, the fact that parliamentary democracy has survived in India with all its warts has kept in place some checks and balances that have prevented a small elite from stealing the country from it own people. One indication of that is the dissatisfaction visible among the advocates of reform at the failure to push it to “completion” even after 25 years. The other is that though they militate against the fiscal conservatism of the neoliberal elite, programmes such as the National Rural Employment Guarantee Scheme have had to be put in place in an attempt, however feeble, to appease the politically enfranchised poor. But when measured against the losses suffered by the majority over these two and a half decades, the gains are near negligible.

Link to original source

Environment: Sustainable Future?

January 2010 - Ashish Kothari, Frontline (Volume 27, Issue 1)

In the last quarter of a century, has India been able to balance its attempts to achieve human welfare and prosperity with safeguarding its natural environment? Has it moved towards the goals of sustainable development that it is committed to along with other countries?

The 1970s and 1980s were heady years for all those interested in the environment. There was increasing concern over rising pollution of water and air and the decimation of forests and wildlife, which were witnessed in the period before and after Independence. A number of people’s movements brought this to our attention: notable among theme were the Chipko activists struggling to save Himalayan forests, several anti-big dam protests in central and southern India and traditional fisher communities agitating against the commercialisation of fisheries. The government, too, responded positively with the creation of a dedicated Ministry of Environment and Forests (MoEF) and the promulgation of path-breaking laws on wildlife, pollution and forests. A new forest policy (1988) shifted focus away from commercial use to ecological and social values. Considerable space was opened up for citizens in the environmental decision-making process; civil society groups were included in expert committees advising the Environment Ministry. The judiciary, too, pitched in with a number of progressive judgments on issues such as pollution, mining and forests.

Perils of Globalisation

But the environmental gains of the 1970s and 1980s were temporary. From the early 1990s, the fragile nature of these gains became painfully obvious. New economic policies that ushered India into economic globalisation were initiated in 1991, led by Manmohan Singh as Finance Minister. These included opening up India’s economy to global investments, moving towards growth led by exports and middle-class consumption, privatisation of a number of sectors and liberalisation of the regulatory environment to make things easier for industry and commerce. Whether such policies were necessary to stabilise India’s economy is itself a big question, but whatever the answer to this, one outcome is undeniable: the country moved further away from sustainability than it had ever been. Here are some indicators. Production and export of minerals and marine fisheries has jumped manifold, with severe consequences for forests, land, water and the coastal/marine environment. Marine product exports (of about 475 items) have gone up from 139,419 tonnes in 1990-91 to 612,641 tonnes in 2006-07. There are visible signs of overfishing in Indian coastal waters, and intensive aquaculture has caused widespread pollution, destruction of local biodiversity and displacement of traditional livelihoods. In 1996, the Supreme Court, acting on citizens’ complaints and reports by the National Environmental Engineering Research Institute (NEERI), prohibited non-traditional aquaculture across India. Unfortunately, this is widely violated.

Minerals production has nearly doubled since 1991. Exports constitute a significant portion of the new mining. In the case of lead ores and concentrates, they went up from a mere 543 tonnes in 2003-04 to an astounding 11,02,514 tonnes by 2007-08. Limestone exports shot up from about 200,000 tonnes in 1995-96 to 879,000 tonnes in 2007-08. The environmental and social impacts are horrendous, as witnessed at the blasted limestone and marble hills of the Aravallis and the Shivaliks, the cratered iron ore or bauxite plateaux of Goa, Madhya Pradesh and Orissa, the charred coal landscapes of eastern India and the radioactive uranium belt of Jharkhand, to name just a few.

Of all the forest land diverted for non-forest purposes since 1980, over 50 per cent has occurred since 2001, mostly on account of increasing demand for such land by industry and infrastructure. Of the nearly 100,000 hectares of forest land given to mining since 1980, over 70 per cent has been given since 1997. All these areas were also home to traditional communities, which are subject to a new wave of internal colonialism. Already, about 60 million people have been displaced by “development”. The means used by the government and the corporations are diverse: cajoling and bribing village headmen to accept relocation, using outright force as currently being attempted in Orissa’s Adivasi belt, and even cooking up a civil-war-like situation by arming Adivasis to fight Adivasis (in the pretext of controlling naxalism) in Chhattisgarh’s notorious Salwa Judum campaign. If humans are so badly affected, can wildlife be far behind? While the disappearing tiger is repeatedly (and justifiably) in the news, imagine the plight of hundreds of other species that do not get media coverage. Nearly 10 per cent of India’s recorded diversity of 130,000 wild plant and animal species may be heading towards extinction. Mining alone threatens over 90 national parks and sanctuaries, which are supposed to be sacrosanct for wildlife.

MoEF’s Unconcern

As this damage intensified over the years, the MoEF should have strengthened the system of environmentally sensitive planning, regulations and safeguards with full involvement of citizens. Unfortunately, it has done precisely the opposite. The 1996 notification on Environmental Impact Assessment (EIA), designed to make development projects ecologically sensitive, was “re-engineered” in 2006 to weaken it. The Coastal Regulation Zone (CRZ) notification of 1991 is being changed to provide easier access to natural resources for commercial activities.

A National Environment Policy (NEP) was pronounced in 2006, providing justification for putting economic considerations above environmental ones, despite two years of strenuous opposition by civil society. A Biological Diversity Act (BDA) promulgated in 2003 has remained toothless on matters of conservation and people’s livelihoods. The policy on special economic zones (SEZs) has sidelined the environment. The MoEF itself has been marginalised by a government intent on catching up with a double-digit growth rate at any cost. The overall result of this process is a marked move towards unsustainability.

According to the Global Footprint Network and the Confederation of Indian Industry (CII), India now has the world’s third largest ecological footprint (after the United States and China), and its citizens are using almost twice what the natural resources within the country can sustain. The capacity of nature to sustain Indians has declined sharply by almost half in the past four decades or so. This, despite an explicit commitment made in India’s 1992 National Conservation Strategy and the Policy Statement on Environment and Development, to “ensure sustainable and equitable use of resources for meeting the basic needs of the present and future generations without causing damage to the environment”.

Six decades after Independence, we do not have a national land-use plan that could safeguard areas crucial for ecological, livelihood and water security. Two decades after professing commitment to sustainable development, we do not have targets and indicators on this in our Five-Year plans. The above-mentioned policy on environment and development committed the government to an annual natural resources budget that would ensure sustainability in planning; no such budgets are available, even 17 years later. Meanwhile, globalisation has only increased the disparities between the rich and the poor, caused declines or stagnation in the real wages of a huge section of the population and created conditions for mass unrest and conflict. The year 2009 has seen some welcome steps by a new Environment Minister seeking to make a difference. But there is hardly any sign of fundamental changes in environment and development governance. The proposed National Environment Protection Authority, for instance, remains very much embedded within the regulatory framework that has so far failed India’s environment and citizens.

Towards Sustainability

In the midst of this gloomy picture, there have emerged many signs of hope. One is a massive increase in environmental awareness generated by governmental and civil society programmes and the media. Awareness of the harmful effects of pesticides, accidents such as the Bhopal gas leak and the impact of climate change has raised more concern in the public than ever before.

There is increasing resistance of people affected by destructive development: Sikkimese monks and Arunachalese youth groups against mega-dams threatening sacred landscapes, villages forcing water-guzzling Coca-Cola plants to shut down, farmers refusing to let their land be taken up for SEZs, and Adivasis in Orissa keeping at bay powerful industrial companies such as Vedanta and POSCO. It is in these that there is hope for the convergence of environmental, human rights, Adivasi, Dalit, women’s and other world views, all of which aim to challenge the status quo but have so far not managed to work together on any sustained basis.

Complementing the movements of resistance is some remarkable work on alternative pathways to human welfare and development. This includes the spread of organic farming networks in States such as Maharashtra (and some States, such as Uttarakhand, actively supporting such farming); women’s self-help groups (SHGs) making natural resource-based products in many States; decentralised water harvesting providing succour in drought-prone areas such as Alwar in Rajasthan and Palamau in Jharkhand; holistic village development reversing the rural-urban migration in some villages of Maharashtra; self-initiated forest and wildlife conservation by thousands of villages in Orissa, Uttarakhand, Maharashtra, Nagaland and other States.

Such efforts are finding strength in laws such as the Right to Information (RTI) Act, the National Rural Employment Guarantee Act (NREGA), and the Forest Rights Act (FRA), that came in against the tide, thanks to strong civil society mobilisation working with sensitive officials and politicians and political pressure from the Left. The rude shock that climate change is giving people may turn into a major opportunity as the government shows signs of putting significant investments into renewable energy and public transport, and a welcome commitment to reduce the country’s carbon intensity. Some corporate bodies are considering different ways of conducting business, though the much-touted corporate social responsibility (CSR) remains mostly a sham. Consumers are getting more aware though fashion-led initiatives such as “green” Bollywood stars, who claim they are doing recycling, are superficial and potentially dangerous if they distract people from the deeper changes needed in their lifestyles.

Will these alternatives show the path to a more sustainable and equitable future? They will, if they are bound together in a more holistic framework and vision where all citizens have full opportunity to participate in decision-making and where ecological sensitivity permeates such decisions. India still has many communities with age-old traditions of wise-living with the earth. It has some of the most innovative thinkers and doers of the modern era, creating truly revolutionary technologies and institutions. India has the ability to organise peaceful mass movements that can shake the strongest of oppressive forces. Its experiments with decentralised governance are beginning to work, and the stability of its democracy (howsoever incomplete) in a dangerously unstable region is remarkable. So such a radical ecological democracy is entirely within the realms of possibility. In any case, it is certainly less utopian than the empty promises of those who tell India that the current neoclassical model of development will make all Indians prosperous and that such prosperity will be sustained through the generations.

Link to original source

Public Health: Far From Healthy

January 2010 - Venkatesh Athreya, Frontline (Volume 27, Issue 1)

The 25 years since the launch of Frontline have been an eventful period in the life of the Indian republic. As the 60th year of the republic approaches, it is only appropriate that we reflect collectively on where we are along many of the key dimensions of development and how far we have progressed in the journey of independent India that began more than 60 years ago. To its credit, Frontline has pursued consistently this theme of the well-being of the nation and its people in all aspects throughout the period since it began its journey. Over a period when Indian print journalism in the English language did not generally distinguish itself by concerning itself seriously with the lives of the people and the state of the republic, Frontline has been a significant exception. On the issue of the health of alone, I found on a search of the back issues of Frontline a surprisingly large number of articles of import.

Since about 1980, the Indian economy has grown, in terms of its gross domestic product (GDP), at over 6 per cent per annum compound, as against an average for the period 1950 to 1980 of around 3 to 3.5 per cent. More recently, between 2003-04 and 2007-08, the rate of growth of India’s GDP even breached the 8 per cent barrier, giving rise to breathless celebrations in sections of the media about India being rapidly on its way to being a “superpower” or at the very least an economic powerhouse.

While the current global economic crisis has led to some muting of the rhetoric, it is important not to lose sight of some basic and disturbing features of our track record of development even through these years of rapid GDP growth.

The scale of mass deprivation remains immense despite years of high growth and has even worsened in some respects. Perhaps the most disturbing aspect of the nature of India’s development over the past two decades, especially since the start of neoliberal economic reforms in 1991, has been a rise in inequality in all indicators of development and well-being. We shall focus here on one key feature of this record, namely the dismal state of health and nutrition of the mass of the Indian population.

Since Independence, India has made significant progress in many fields, and these include some of the key indicators of health. Thus, the infant mortality rate (IMR), defined as the number of infants dying before reaching the age of one year per 1,000 live births, a key and sensitive indicator of the state of health in any society, declined from around 150 at the end of colonial rule (a grim reminder of how terrible the colonial dispensation was) to 53 for the year 2008. Similarly, the expectation of life at birth was 32 years at the time of India attaining Independence, but was close to a little over 63 years for the period 2002-06.

India has built up, over the decades, a large infrastructure in terms of health facilities in the public sector. Thus, as of March 2008, there were 1,46,036 health subcentres (HSCs) and 23,458 primary health centres (PHCs) as against 84,376 and 9,115 respectively at the end of the sixth Five-Year Plan in March 1985. Similarly, the number of community health centres (CHCs) rose over the same period from 761 to 4,276. There were 1,813 first referral units (FRUs) – district and sub-district hospitals – as of March 2008.

There has also been progress in immunisation of children and pregnant mothers and in provision of ante-natal care as compared with the situation at the time of Independence though in recent years, under the neoliberal regime, there have been some setbacks. India’s record in areas such as control of malaria has been rather mixed, though, and the recent resurgence of infectious diseases across the developing world has found the country relatively unprepared.

It would be fair to say, however, that the progress in the public provision of health as well as the health status of the citizens has been extremely modest. On the eve of Independence, the Bhore Committee made a comprehensive set of recommendations for a health policy with a clear focus on public health and rooted in the emphasis on preventive care. Over the years, India has consistently failed to implement those recommendations though official rhetoric continued to pay lip service to the crucial importance of public health and preventive medicine.

Even as late as 1983, the National Health Policy document echoed many of the Bhore Committee recommendations and its rhetoric was consistent with the famous Alma Ata declaration of 1978 of ‘Health for All by 2000’. A few years earlier, the Jaisukhlal Hathi Committee had called for a rational drug policy and price control on a large number of drugs and pharmaceuticals to prevent profiteering by multinational drug companies and ensure affordable prices of essential drugs for common people. The Indian Patents Act, which was passed in 1970, provided space for the growth of the Indian pharmaceutical industry by ensuring that patenting did not lead to the monopoly of transnational pharmaceutical giants in the market for drugs and chemicals.

But by the mid-1980s, with the promulgation of the New Economic Policy and the New Drug Policy by the Rajiv Gandhi government (along with several other “New” policies announced for education, textiles, and so on), the course of even the rhetoric of policy changed. By 1991, when the economic reform policies of liberalisation, privatisation and globalisation (LPG policies, as they are popularly known) were accelerated under the tutelage of the World Bank and the International Monetary Fund (IMF), the nation was set on a course entirely different from what had originally been envisaged. It would no longer be the case that the government was obliged to ensure the health of the citizens. Instead, health was to become a commodity like any other, and its provision was to be determined increasingly by market forces.

Over the period of reforms, public provision of health care and health services has been undermined both at the level of practice and at the level of ideology and policy. Provision of health through public sector institutions has been impacted negatively by budgetary cuts driven by the presumed need to rein in the fiscal deficit. The State governments, which bear the main burden of public provision, have been hamstrung by a fiscal regime that increasingly deprives them of access to adequate resources. Besides, most of them have also happily gone along with the neoliberal policy regime. The corporate private sector in health care has boomed, even as India is being sold as a favourite destination for “medical tourism”. With increasing commercialisation of health care, the access of ordinary people to health care has become more difficult. The weakening of the public health system has left the country very poorly equipped to handle public health emergencies.

Low Public Spending

It is a well-known scandal that India is practically at the bottom of a list of more than 170 countries in terms of the proportion of total health expenditure that is financed by government. Public spending on health in India was around 1.05 per cent of the GDP during the mid-1980s and is currently at 1.35 to 1.4 per cent of the GDP. The commitment given in the Common Minimum Programme (CMP) of the United Progressive Alliance (UPA) government in 2004 that the total expenditure on health by the Centre and State governments combined would be raised to between 2 and 3 per cent has remained unfulfilled. While there is a substantial rise in the outlay on health and family welfare in the 11th Plan to Rs.1,40,135 crore from Rs.58,920 crore in the 10th Plan, it still remains way below the levels required to meet the CMP commitment. Now that the second UPA dispensation is not dependent on the support of the Left parties for its survival, the prospect of a rise in government expenditure to the levels promised in the CMP in 2004 seems bleak.

While government spending on health remained at about 1 per cent of the GDP in 2001-02, the total of health and health-related expenditures amounted to 5.2 per cent of the GDP at factor cost. The share of the government in total health expenditure has been less than one-fifth. What is worse is that the reform policies have led to greater commercialisation of health, and health costs have risen rapidly. Since the mid-1990s, household health expenditure has risen at 14 per cent per annum. A conservative estimate of the rise in the poverty ratio on account of rising health expenditures of households, even when calculated using the disputed official methodology, is around 3.6 percentage points for rural areas and 2.9 percentage points in urban areas.{+1} It is also known that rising health and education costs have forced poor households to cut back expenditure on food to meet these costs, something that could worsen an already scandalous nutrition situation.

There are, of course, large inter-State variations in the public and private provision of health care services and in health outcomes. For instance, at one end we have a State like Kerala with an IMR of 12 (urban 10, rural 12) and at the other Madhya Pradesh with an IMR of 70 (urban 48, rural 75). Policy needs to address these disparities, with a far greater focus on the poorly performing States. However, it needs to be emphasised that health and nutrition outcomes across the country have worsened during the reform period. This is shown dramatically by the data on nutritional outcomes from the National Family Health Surveys (NFHS). The third of these surveys, relating to 2005-06, after more than a decade of neoliberal reforms, tells us that in urban India between 1998-99 and 2005-06

• the percentage of women with anaemia rose from 45.7 per cent to 50.9 per cent;

• the percentage of women with chronic energy deficiency (CED) rose from 22.1 per cent to 25 per cent; and

• the percentage of children in the age group of 6 to 36 months who are stunted rose from 35.6 per cent to 39.6 per cent.

The situation in rural areas is equally alarming, though it shows some improvement between 1998-99 and 2005-06 in respect of both child stunting and women with CED. The percentage of women with CED declined marginally from 40.6 per cent to 38.8 per cent for India as a whole, while that of children stunted declined substantially from 48.5 per cent to 40.7 per cent, but still an unconscionably high level. However, the percentage of women with anaemia in rural India actually increased between 1998-99 and 2005-06 from 53.9 per cent to 58.2 per cent.

Little Sense of Urgency

The dismal health and nutrition situation, implying a poor state of food and nutrition security in both rural and urban India, needs to be addressed on a war footing. But one finds little sense of urgency on the part of a government firmly anchored in a neoliberal mindset to address India’s permanent state of nutritional emergency even after more than two decades of a compound annual growth rate of GDP exceeding 6 per cent. Instead, a completely unregulated, commercial private sector in health is allowed to run riot, even hijacking medical education in the process and playing with the lives of millions of poor people.

The slogan of “public-private partnership”, in most instances a euphemism for “partnership for private profit”, has become the mantra of the government to implement all programmes. The enormous mess in urban health, on top of a dismal rural health care situation, cries for urgent attention, but unless health is seen and provided as a basic human right little will change. That does not seem to be on the agenda of the government, now or in the foreseeable future.

While it is true that the issue is not merely one of enhancing outlays but also one of improving health delivery systems to obtain desired health outcomes, outlays constitute the basic prerequisite. A government that is able to provide a largesse of nearly Rs.5 lakh crore per annum over the past two years to the corporate sector in the name of fiscal stimulus has no excuse for not raising health funding to the levels required to address the country’s health crisis. Where there is a will, there is a way. But there is no will.

Link to original source