There are two important global reports that have been published this month—by the International Food Policy Research Institute (IFPRI) and the World Bank—which present two different economic frames. The World Bank’s ‘Doing Business Report’, which focuses on the ease of doing business, is essentially a reflection of what governments do to lessen red tape and make it more convenient for one to do business. This holds not just in terms of starting a business, but also links the chain with credit, markets, trade, insolvency, etc. The Global Hunger Index of IFPRI, which is more a concern of just societies that have a proclivity towards socialism, looks at the level of relative deprivation and highlights the responsibility of the government in alleviating the same. The government needs to be applauded for doing everything that is required to make doing business easy and the improvement by 30 ranks vindicates this effort. A low rank on the doing business scale has been a concern for the multilateral agencies as well as rating companies, where the low rank is often used as a reason to be critical of the policy framework. By relentlessly focusing on the lacunae with the Insolvency and Bankruptcy Code (IBC) being the big bang reform that has come in, investors should be more confident about investing in India.
The World Bank has admitted that GST has not been included in this exercise, which really means that, going forward, the rank has to improve sharply, as this was always one major concern on the taxation front where the structure was complex with a plethora of taxes and rates that led to severe governance issues. Given that, in a year’s time, the hurdles would have been crossed, it should result in brownie points for India. The same holds for insolvency, where the implementation of the IBC would have also played out. In fact, there would also be more clarity on the recapitalisation exercise that should begin any time in the next quarter or so. Therefore, the dream of coming in the top 50 countries looks realistic today and this is something we can be happy with.
It would also be realistic to expect the global rating companies to review the rating for the country and seriously consider an upgrade by at least 2 notches, if not more, considering that they have been critical of the tax system, NPA resolution, starting business, etc. In fact, strong economic numbers, which include government finances, exchange rate, forex reserves, foreign investment, etc, should add to the strong case for an upgrade. Some of the major gains in terms of ranking have been accomplished in the areas of protecting minority interests in markets (rank 4) and getting credit (rank 29)—where the regulators Sebi and RBI have always been proactive and ahead of the curve most of the time. The reforms on the tax front also have been progressive, with the rank improving from 172 to 119. GST should definitely take us further up the scale.
The areas in which there have been slippages or where limited progress has been made are starting a business, construction permits, registering property and trade across borders. For the first three, the ball is really in the court of states and local authorities, where the Centre has limited say. Therefore, states will have to work on these aspects to ensure that they also move up the pecking order in the state rankings for the same (a separate report brought out by the ministry of commerce). The question to be asked is as to how does this get linked with investment? Here, the answer is that the rank per se will not be important for taking decisions as much as the processes that have been opened up which led to this improvement. As policy formulation and reforms are a continuous process, the changes made will be influencing decision-making. Domestic investors would be looking positively at tax reforms or any measure invoked for setting up a business, especially where land, construction, etc, is concerned. Foreign investors do regularly look at the score on this scale when determining where to invest, as the World Bank ranking is held sacrosanct universally. Therefore, with the determination shown to hasten the pace of reforms, it may be expected that there will be an increase in flow of investment, especially in areas where red tape and bureaucratic procedures came in the way.
The IFPRI Hunger Index narrative is, however, dismal and is a reflection of the fact that there is reason to believe that growth achieved in the last decade has an elitist tilt and that the narrow overwhelming focus on productive sectors has achieved the goal without the trickle-down effects working their way. In fact, the constant focus on making the government a productive spender rather than an efficient redistributor has come in the way of creating cogent delivery mechanisms for the poor, which is there to be seen. The score had moved faster downwards between 1992 and 2000, from 46.2 to 38.2, but then moved to 35.6, i.e. down by 2.6 in the next eight years, followed by 3.2 to 31.4 in the subsequent eight years. It does appear that the strategy in the last decade was more on accelerating growth than direct attention on the welfare of the poor. With 14.5% of the population being classified as being undernourished, 21% of children being wasted (low weight compared with height) and 38.4% children being stunted (height relative to age), state failure stands out. From the point of view of growing an egalitarian society, such numbers are reflective of neglect, while from the economic standpoint, such figures do not speak well of the so-called demographic dividend that we profess.
Quite clearly, decades of neglect of the poor get reflected in these numbers, and while it has become fashionable to be critical of the Centre’s and states’ expenditure on social welfare, there is need to not just revisit strategies, but also increase the allocations in a meaningful way. Otherwise, such lopsided development is not sustainable. The irony is that India is ranked 100 on both the indices, where the Doing Business stands out as it is an improvement of 30 ranks in a set of 190 countries. The Hunger Index is for 119 countries and hence the range of emotions is different for each of these numbers. In fact, the Hunger Index places India lower down the order compared with Bangladesh and Sri Lanka. When juxtaposed with the fact that India has for long been the fastest growing major economy in the world, both these indices show contrary pictures. The questions that we can ask are: How can a country which has witnessed such reforms grow by only 7%? In the same breadth, it can be posed as to how can a country which is growing at 7% have such a high level of deprivation?
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While political bickering is on and there are claims and cross claims regarding good governance and development, India is grappling with multitude of persistent problems such as poverty, unemployment and destitution resulting into various kinds of deprivations, and undoubtedly if any segment of population in the country is half fed and half clad all claims fall flat. India has figured at appallingly low level in the International Food Policy Research Institute (IFPRI) Hunger Index report released recently. According to the IFPRI report 2017 India ranks 100th out of 119 countries on the global hunger index — behind North Korea, Bangladesh and Iraq but ahead of Pakistan. The country’s serious hunger level is driven by high child malnutrition and underlines need for stronger commitment to the social sector. India stood at 97th position in last year’s rankings. India is ranked 100th out of 119 countries, and has the third highest score in all of Asia — only Afghanistan and Pakistan are ranked worse. The IFRI report asserts, “At 31.4, India’s 2017 GHI (Global Hunger Index) score is at the high end of the ‘serious’ category, and is one of the main factors pushing South Asia to the category of worst performing region on the GHI this year, followed closely by Africa South of the Sahara.” As per the report, India ranks below many of its neighbouring countries such as China (29th rank), Nepal (72), Myanmar (77), Sri Lank (84) and Bangladesh (88). It is ahead of Pakistan (106) and Afghanistan (107). North Korea ranks 93rd while Iraq ranked at 78th position.
The Gravity of the Problem
According to 2017 GHI scores, the level of hunger in the world has decreased by 27 per cent from the 2000 level. While this needs appreciation, we should remind ourselves that the job is not close to the finish line. There is massive injustice to millions who are experiencing chronic hunger from food crises and famines.
India’s high ranking on the Global Hunger Index again this year brings to the fore the disturbing reality of the country’s stubbornly high proportions of malnourished children. IFPRI pointed out that more than one-fifth of Indian children under five weigh too little for their height and over a third are too short for their age. As of 2015-16, more than a fifth [21%] of children in India suffer from wasting [low weight for height] — up from 20% in 2005-2006. Only three other countries in this year’s GHI — Djibouti, Sri Lanka and South Sudan — show child wasting above 20%. India’s child wasting rate has not shown any substantial improvement over the past 25 years. However, India has made considerable improvement in reducing its child stunting rate, down 29% since 2000, but even that progress leaves India with a relatively high stunting rate of 38.4.
The Way out
According to P.K. Joshi, IFPRI Director for South Asia, “Even with the massive scale up of national nutrition-focused programmes in India, drought and structural deficiencies have left large number of poor in India at risk of malnourishment in 2017.” However, he said that the on-going efforts are expected to make significant changes in improving the existing situation. Mr. Joshi appreciated that India has developed and launched an action plan on ‘undernourishment free India’ by 2022. The plan shows stronger commitment and greater investments in tackling malnutrition in the coming years.
Since India adopted the New Economic policy growth has improved and per capita income and consumption has also increased in last two decades, but at the same time inequality, poverty, unemployment, destitution have also been aggravated in rural areas, among peasants, working class and marginalized sections. It is important to minimize destitution and immiserisation of the excluded sections resulting from the process of economic reforms. The development decisions and processes should be based on participatory democracy and inclusive growth models. Small farmers, farm labour and urban poor should also form part of the policies affecting food security. Secondly government should give up rejection mode in its thinking and accept where the shoe is pinching. The Government must be bold enough to admit failure and should have courage to restart: Often, problems remain due to denial. Thirdly government should fix its priorities in a democratic faction- if India progreses towards new millennia Bharat should also not lag behind. India needs proper thrust on food security, health, education and skill formation. Capabilities need to be created among the marginalized sections and state capacity to deliver important services should be given priority. GDP numbers and stock exchange performance may matter to India but Barat needs food and medicine, education and housing. Fourthly, social security must be extended to all vulnerable sections such as women, farmers, tribal population , scheduled caste people and the minority. Even the poor segments among the forward and backward castes need income security and other forms of social safety nets.
It needs to be understood that politicization of the issue is not going to blur the fact that irrespective of governments in the past or at present claiming their thrust on pro poor policies, India has not been any better in recent times with regard to health and nutrition. The lower the index, the better equipped is the country to prevent hunger and malnutrition. India’s position has surely slid, but the number of countries included in the index as well as method have also undergone changes. It is important to note that IFPRI changed the index in 2015 to make it more comprehensive. In 2014, there were only 76 countries for discussion, 104 in 2015 and 119 today. So India’s GHI of 17.8 in 2014 and 29.0 in 2015 are also not directly comparable. India ranked lower than North Korea in 2017, 2015, 2014, 2013 and 2012. So, there is no sensational news regarding this in 2017. In fact, India ranked lower than Pakistan in 2012 and 2013.
Satya Raghu V Mokkpati (Businessline) has given good insight into the problem. India is expected to see a growth of 16.5 per cent in population over the next decade. More than 50 per cent of India’s population is below the age of 25 currently and more than 65 per cent is below the age of 35. It is expected that in 2020 the average age of an Indian will be 29 years. So the fresh population that is going to be added is the reason for reduction in age. If our young population should be an asset for the country, they should certainly be healthy, and poor GHI is never a good sign. How does power work in the food system? Gender inequality is one of the prime contributors. Typically, women in many societies consume food after the men consume. This continues even when they are pregnant or immediately post their delivery. Starting from the time the child is in the mother’s womb, if for the first 1,000 days the child experiences malnutrition, the child will experience serious health complications at different stages in life. Inadequate weight and stunted height are generally a consequence of poverty and lack of access to nutritious food. Even though it is said that the world has enough food to feed its population, hunger persists. It is unfortunate that 30 per cent gets wasted and billions go to bed hungry. Food security is not just about sufficiency of food, it is also about the appropriateness of the food from a nutrition standpoint. Martin Luther King said, “Injustice anywhere is a threat to justice everywhere.” Lack of access to food is injustice of the first order. It is our collective responsibility to solve it rather than merely sensationalising statistics.
What is GHI?
The Global Hunger Index (GHI) is a multidimensional statistical tool used to describe the state of countries’ hunger situation. The GHI measures progress and failures in the global fight against hunger. The GHI is updated once a year. The Index was adopted and further developed by the International Food Policy Research Institute (IFPRI), and was first published in 2006 with the Welthungerhilfe, a German non-profit organization (NPO). Since 2007, the Irish NGO Concern Worldwide joined the group as co-publisher.
The GHI, now in its 12th year, ranks countries based on four key indicators — undernourishment, child mortality, child wasting and child stunting.The report ranked 119 countries in the developing world, nearly half of which have ‘extremely alarming,’ ‘alarming’ or ’serious’ hunger levels.
The GHI, now in its 12th year, ranks countries based on four key indicators — undernourishment, child mortality, child wasting and child stunting. The report ranked 119 countries in the developing world, nearly half of which have ‘extremely alarming,’ ‘alarming’ or ’serious’ hunger levels.
GHI considers four parameters to for ranking countries:
- Undernourishment: share of the population that is undernourished, reflecting insufficient caloric intake;
- Child wasting: share of children under the age of five who are wasted (low weight-for-height), reflecting acute under-nutrition;
- Child stunting: share of children under the age of five who are stunted (low height-for-age), reflecting chronic under-nutrition; and
- Child mortality:mortality rate of children under age five
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