India’s low rank in UN Human Development Index reflects Modi govt’s misgovernance

At the root of the tragedy is the unprecedented shrinking of income. The Gross National Income per capita level has slipped down to US$ 6,590, earning India the label of a lower middle-income country

PTI (File Photo)
PTI (File Photo)
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Krishna Jha

The COVID pandemic brought devastation and slowed down development the world over. But unlike many other countries, the government in India remained unconcerned about the welfare of the people, the direct consequence of which is our low rank in United Nations’ Human Development Index (HDI) for the year 2021.

The Human Development Report 2021-22 has ranked India at 132, down from 130 in 2020. The report, released by the United Nations Development Program (UNDP), says India’s HDI value stood at 0.633 in 2021, lower than the world average of 0.732. In 2020, too, India recorded a decline in its HDI value (0.642) in comparison to the pre-COVID level in 2019 (0.645).

At the root of the tragedy is the unprecedented shrinking of income. The Gross National Income per capita level has slipped down to US$ 6,590, earning India the label of a lower middle-income country, with unemployment at an all-time high. 

It is here that the country’s progress gets determined. Any kind of welfare steps are denied to those who produce the wealth, on which the life of a nation is kept flowing. 

The report is a stark indicator of the government’s mishandling of the economy and the resultant suffering of the working class. It is the failure of the system that forces people from the lower depths to shoulder the responsibility of development and progress, and yet they are themselves kept with bottom level affordability. 

According to the report, a reduction has been registered in their Human Development Index value in 2020-2021, reversing much of the progress. It is the Sustainable Development Goals that are facing the brunt.

In such a grim scenario, it was the MSME sector that gave some respite to the common masses. Compared to other sectors, it has generated some employment, whatever be the wages and the timings. 

But this sector sustained a huge damage when the emergency credit line guarantee scheme was introduced. The credit to MSMEs was given for a maximum of 20 per cent of their outstanding debt. As per data, when the loans were disbursed under this scheme to one crore accounts, 16.4 per cent of these accounts turned non-performing due to financial stress the borrowers were going through. 

It was clear that COVID was not the only factor due to which the economy suffered. And the crisis continued even after COVID receded. 

The data from National Credit Guarantee Trustee Company reveals that 16.22 lakh loans have turned bad. In value terms, this works out to Rs 11,893 crore. This implies that it was the relatively smaller firms that have been under stress and have not been able to meet their obligations. 


The fact that most of the loans turned bad in the first tranche itself of the scheme was a signal that it was only the tip of the iceberg. The MSMEs, both formal and informal, give jobs to a major section of the labour force, and it is mostly this section that suffers due to the continuing financial stress.

While these numbers do reflect the extent of financial stress among the MSMEs, it is also relevant to point out that these are formal MSMEs. Formal sources are applicable only for them. Informal MSMEs are much larger in numbers and the financial crisis is much greater for them, since they are denied any access to formal sources.  With no access to credit and formal funding, their plight is much worse. 

With their labour force getting visibly affected, their continuing financial stress points to the simmering distress in the labour market. 

(IPA Service)

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