Government ignores World Banks’s HCI ranking

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NEW DELHI: The World Bank last week released a Human Capital Index (HCI) as part of the World Development Report 2019.  It ranked India at 115th position out of 157 countries. The government of India has rejected HCI saying that its score does not reflect the key initiatives that are being taken for developing human capital in the country.

A statement from Ministry of Finance said, “There are serious reservations about the advisability and utility of this exercise of constructing HCI. There are major methodological weaknesses, besides substantial data gaps.”

The statement added, “The metric of HCI is too simplistic at one level and too ignorant of development realities at another.”

The Human Capital Index quantifies the contribution of health and education to the productivity of the next generation of workers. It is designed to measure the amount of human capital that a child born today could expect to attain by the age of 18.

The HCI has three components:

  1. Survival: It is measured by using the data of mortality rate on kids under the age of 5.
  2. Expected years of learning-adjusted school: Information on the quantity and quality of education a child actually receives by the time he/she attains the age of 18. How much children learn in school based on countries’ relative performance on international student achievement tests.
  3. Health: This component uses two indicators for a country’s overall health environment:
    (1) The rate of stunting of children under age 5, which reflects the health environment experienced during prenatal, infant, and early childhood development.
    (2) The adult survival rate, defined as the proportion of 15-year-olds who will survive until age 60.   It reflects the range of health outcomes that a child born today may experience as an adult.

The health and education components of the index are combined in a way that reflects their contribution to worker productivity, based on evidence from rigorous micro-econometric empirical studies. The resulting index ranges between 0 and 1.

The HCI for India has been estimated at 0.44.

As per the release on Press Information Bureau (PIB), the key observations regarding HCI for India in the report are:

Human Capital Index: If a child born today in India gets to enjoy complete education and full health he/she will be only 44 per cent productive of her complete potential when he/she grows up.

  • There has been marked improvement in the HCI components in India over the last five years.
  • Probability of Survival to Age 5: 96 out of 100 children born in India survive to age 5.
  • Expected Years of School: In India, a child who starts school at age 4 can expect to complete 10+2 years of school by her 18th
  • Harmonized Test Scores: Students in India score 355 on a scale where 625 represents advanced attainment and 300 represents minimum attainment.
  • Learning-adjusted Years of School: Factoring in what children actually learn, expected years of school is only 5.8 years.
  • Adult Survival Rate: Across India, 83 per cent of 15-year olds will survive until age 60.
  • Healthy Growth (Not Stunted Rate): 62 out of 100 children are not stunted. 38 out of 100 children are stunted, and so at risk of cognitive and physical limitations that can last a lifetime.
  • Gender Differences: In India, HCI for girls is marginally higher than for boys.

The quality adjusted learning has been measured in India by using the data as old as 2009.

The Ministry of Finance stated that many initiatives such as Ayushman Bharat Programme, Samagra Shiksha Abhiyan, Pradhan Mantri Ujjwala Yojana, Pradhan Mantri Jandhan Yojana are transforming human capital in India at a rapid pace and very comprehensively touching upon the lives of millions of people living in rural and tribal areas.

The statement said, “The qualitative aspects of improved governance that have a strong correlation with human capital development cannot be and have not been captured by the way the HCI has been constructed. The gap in data and methodology overlook the initiatives taken by a country and, in turn, portray an incomplete and pre-determined picture.”

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