India: A World Bank Study
By Dr. Rizwana Rahim
Chicago, IL

India is an emerging economic and technological power with a promising future clouded by deep and complex problems. In a recent policy development review, “India: Inclusive Growth & Service Delivery: Building on India’s Success” (2006), World Bank takes a closer look at some of the contradicting features.
The country has been enjoying a booming economy and there’s some optimism about its future, thanks to the policy reforms of 1991. However, some of its major problems have in fact worsened: the record of public sector delivering government services has gone from bad to worse, and the gap between the rich and the poor, towns and villages, etc., continues to grow into increasing social tension.
The study suggests that the Indian government has to radically change and improve the delivery of services, while sustaining the economic growth and spreading it across to more people and sectors. Now, most of the economic gains are lost or squandered in the maze of these problems.
The age-old problems remain: Nearly 50% of children under 6 are under-nourished; more than half the women are illiterate; half the homes have no electricity; and in towns and cities frequent power outages; water supply in many places is restricted just to a few hours per day, and the rich pay for their water (pumps, bore-wells, storage tanks).
In almost all its functions, the public sector has severe problems, aggravated by the red tape and sclerotic bureaucracy. This is not news for those who watch the Indian TV series, “Office, Office,” or are familiar with it.
The government is committed to providing health care for all, but only 21% of its budget is devoted to it, compared to about 45% in the US – only 5 countries in the world spend less in this area than India. Even the poor have no recourse but to seek private health care and pay for it. A nationwide survey (1999-2003) showed that only 45% of children are fully immunized against childhood diseases: this is actually a decrease from 52%. According to another recent survey, health care delivery services also suffer from a problem not generally expected in this area: ‘retail’ bribery, and its share (27%) was bigger than what’s often found in other government functions (including police).
As to education, more than half the children in towns are in private schools. A countrywide survey of surprise visits to the government schools indicated that only about half of the teachers were present and performing their duties. At the end of primary school, government school children cannot do simple math.
Public sector works worse in poorer states where growth is already on decline. This is in contrast to other states which are better off and have been growing since the 1999 economic reforms. According to the World Bank study, parts of India are at par with Mexico in terms of standard of living, while other areas seem as poor as some Sub-Saharan African countries.
Despite a lot of progress in recent decades, some problems have deep roots in the culture, e.g., legacy of social stratification and exclusion. Caste system still defies reform. Prejudice against female children is getting worse. In more affluent areas of India, sex-selective abortions are rising which tend to skew the sex-ratio at birth. Infant mortality is still a painful reality: a girl born in 1990s was 40% more likely to die within the first 5 years as compared to a boy. Politics is, as usual, riddled with wide scale abuses and unmet promises. Electoral process runs on promises of jobs, contracts and subsidies. Indian Civil Service remains immune to reform.
Recent governments, and in particular the Singh government, have set for themselves a sensible set of priorities, with clear policies: infrastructure, health care, education and increased agriculture production. What seems to fail is the machinery that is supposed to deliver the policies on them.
The public sector reforms are crucial, because unless the bureaucracy is held accountable and delivers the services effectively and efficiently to the public at large, future for India looks more like pockets of economic growth surrounded by still un-addressed basic problems. Such patchy economic growth alone is not going to trickle down and spread across the bard into areas that have long been neglected.
The Economist (12 August) also has an article on this World Bank ['Economics Focus: Light and Shade'].


Editor: Akhtar M. Faruqui
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