On the right track?

Because of an improvement in life expectancy and gross national income India has moved up five slots to the 130th position in the UN's Human Development Index rankings. This is good but not good enough. The HDI, which is based on three factors — a long and healthy life, access to knowledge and a decent standard of living — is not given as much national attention as GDP or the RBI's monetary policy. That is one reason why finance ministers pay poor attention to human growth, welfare and happiness. Bhutan measures its well-being with a Gross Happiness Index and Thailand has a Green and Happiness Index. Indians measure their progress and prosperity with the number of cars they own, gadgets they buy and houses they possess.

The Modi government, judged on the HDI, scores poorly despite the country's improved ranking. Presenting the first full NDA Budget for 2015-16, Finance Minister Arun Jaitley slashed the allocations for education by 16 per cent and for health by 15 per cent. Worse, both ministries did not spend fully what they were given in the previous budget. The Health Ministry spent only 76 per cent of the amount given in the 2014-15 budget, while the HRD Ministry's record was a shade better at 80 per cent. The worst was the Ministry of Housing and Urban Poverty Alleviation which used only 45 per cent of the budgeted amount. The UNDP report for 2015 singles out for praise the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which Prime Minister Modi had dubbed a “living monument” of the UPA government’s failures. In his budget speech Finance Minister Jaitley had promised to enhance the allocation for MGNREGA by another Rs 5,000 crore “if there is tax buoyancy.” Despite the windfall from oil and tax hikes, the promise has not been kept.

The UNDP report reminds the government that India can provide "a basic and modest set of social security guarantees for all citizens with universal pension, basic health care, child benefits and employment schemes" using just 4 per cent of its GDP. It is only a matter of India getting its priorities right.