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Headline : India ranks 158th in ‘human capital’ score, behind Sudan
Details :
The News
  • India ranked 158th in the world in the first ever human capital score according to a study by Institute of Health Metrics and Evaluation.

What is Human Capital?
  • Human capital refers to the attributes of a population that contribute to economic productivity.
  • Human capital is an important determinant of economic growth.
  • It is the aggregate levels of education, training, skills, and health in a population.

Context
  • Recently the World Bank introduced Human Capital Project, which aims to understand the link between investing in people and economic growth.
  • Though it is widely accepted that human capital is a driver of growth, much of the investments in human capital are too low in low-income and middle-income countries.
  • Most of the World Bank’s investments focus on physical capital.
  • Only 1.5% of the World Bank International Development Association concessional grants are for health and 1.9% is for education.
  • Besides countries have focused on building physical assets as they yield returns sooner than investing in health and education.
  • The World Bank had in 2017 requested IHME to develop a measure of human capital to enable global comparisons and equip governments with the insights into where critical health and education investments are needed
  • Thus monitoring the expected formation of human capital in the next generation, as a measure of the effect of near-term investments in health and education, could facilitate a mechanism to hold countries and donors accountable to their populations for these investments.

Study of Human Capital Score
  • The Human capital score is computed by Institute of Health Metrics and Evaluation at the behest of World Bank as a part of its study, ‘Measuring human capital: a systematic analysis of 195 countries and territories, 1990–2016’.
  • This is first ever scientific study ranking the countries for their levels of human capital.
  • According to the study, the expected Human capital score is measured as the number of years a person can be expected to work in the years of peak productivity.
  • Besides the study shows that there is a direct correlation between investments in education and health and improved human capital and consequently GDP.
  • Each country is assigned a Human capital score ranging from 0 to 45, measured by the following four dimensions.
  1. Educational attainment measured as estimates of average years of education
  2. Education quality or learning
  3. Functional health
  • Measured as prevalence of seven diseases and impairments including wasting, stunting, anemia, cognitive impairment, vision loss, hearing loss and infectious diseases including HIV/AIDS, tuberculosis, malaria, neglected tropical diseases, diarrhea etc.
  1. Survival
  • Measured as expected years lived between ages 20 and 64 years.


Key Results
  • Finland topped the list with a level of expected human capital of 28 years, followed by Iceland, Denmark, Netherlands.
  • The US dropped from 6th position in 1990 to 27th in 2016.
  • China has significantly improved to 44th position.
  • In South Asia, while Pakistan(164), Bangladesh (161) and Afghanistan (188) are ranked below India, Sri Lanka (102), Nepal (156), Bhutan (133) and Maldives (116) have fared better than India.

Report card of India
  • With a human capital score of 7 out of 45, India ranks 158th in the world for its investments in education and health care.
  • It means India has only 7 years of expected human capital between 20 and 64.
  • In other words people in the age group of 20 to 64 have only 7 years of peak productivity.
  • India’s rankling of 158 is an improvement from its 1990 ranking of 162.
  • Under 4 dimensions, India’s performance is as follows
  • India’s residents had 39 out of a possible 45 years of life between the ages of 20 and 64.
  • Expected educational attainment of 10 years out of a possible of 18 years in school
  • A learning score of 66 out of 100
  • Functional health score of 43 out of 100

What it means?
  • Though Indians could expect to live 39 years long between the ages of 20 and 64, their productive years are as low as 7 years as a result of low functional health (43/100).
  • While Indians are spending 10 years in school, education quality is significantly lower.
  • India has the second-lowest education score (66/100) amongst its South Asian counterparts, after Afghanistan (65).

Low investments on health and education
  • According to National health profile 2018, India’s public health expenditure is among the lowest in the world at 1.02 percent of GDP against the stated target of 2.5 percent of GDP of the National Health Policy 2017.
  • Further public spending on education is 2.7 percent of GDP in 2017-18, compared to 3.3 percent in China.

Section : Social Issues