Resources and

Constraints

BLOCK 2
POPULATION AND HUMAN
DEVELOPMENT

67
Economic
Development since BLOCK INTRODUCTION
Independence
Block 2: Population and Human Development
Block 2 of this course is on ‘Population and Human Development’. This
block has three units. The units are devoted to the themes of demography,
education, health and nutrition. It thus deals with the social sector of
development.
Unit 5 is on ‘Demographic Features’. The unit discusses the growth in
population over the decades. Changing trends in fertility and mortality rates
are explained. The issue of demographic transition is then discussed in terms
of urbanisation, sex ratio, population pyramid and dependency ratio. The
concept of ‘population ageing’ with reference to demographic dividend and
National Population Policy is also presented in the unit.
Unit 6 is on ‘Education Sector’. The unit begins with a distinction on
‘human capital’ and ‘human development’. The status of ‘education sector’
in India is explained by ‘level of education’ and ‘gender and quality’
dimensions. The issue of ‘financing of education’ is discussed with reference
to ‘public expenditure on education’ and ‘alternative sources of funding’.
Unit 7 is on ‘Health and Nutrition’. The unit begins with an outline on the
concepts of ‘measurement of health and nutrition’. Issues of sources of
health expenditure, public healthcare system in India and the National Health
Policy are discussed in the unit.

68
UNIT 5 DEMOGRAPHIC FEATURES*
Structure
5.0 Objectives
5.1 Introduction
5.2 Population of India: Size and Growth
5.2.1 Growth of Population

5.3 Vital Statistics

5.3.1 Fertility Rates
5.3.2 Mortality Rates

5.4 Demographic Transition

5.4.1 Urbanisation
5.4.2 Sex Ratio
5.4.3 Population Pyramid
5.4.4 Dependency Ratio

5.5 Population Ageing

5.5.1 Demographic Dividend
5.5.2 National Population Policy

5.6 Let Us Sum Up

5.7 Some Useful Books and References
5.8 Answers or Hints to Check Your Progress Exercises

5.0 OBJECTIVES
After going through this unit, you will be able to:
• define the concepts of ‘Density of Population’ (DoP) and ‘Growth of
Population’ (GoP);
• state the basic demographic equation of ‘Vital Statistics’ with a
specification of its main constituents;
• explain the different types of ‘fertility’ and ‘mortality’ rates along with
their merits and demerits;
• analyse the trends in ‘demographic transition’ in India;
• outline the concepts of ‘population ageing’ and ‘demographic dividend;
and
• indicate the objectives and achievements of NPP, 2000.

5.1 INTRODUCTION
Demography means ‘the scientific study of human population, with respect to
size, structure and development’. The study of Demography is important

*
Prof. Sumanash Dutta, Assam University.
69
Population and since human population in terms of its structure, composition and growth, has
Human
Development
significant bearing on economic growth and development. Population is the
only and ultimate source of labour supply for development activities. It is also
the ultimate beneficiary of development. Hence, population is both the means
and the end of economic development. In India, the Demographic data is
available in the Census Reports which is conducted every once in ten years.
The last such census was conducted in the year 2011. The present unit delves
into the important demographic features of India.

5.2 POPULATION OF INDIA: SIZE AND

GROWTH
India’s population, as per the 2011 census, was 1211 million (a million is
equal to 10,00,000 i.e. 10 lakhs). Stating the figures in millions, it was 1029
in 2001, 846 in 1991, 683 in 1981, 548 in 1971, 439 in 1961 and 361 in 1951.
At present, India is the second most populous country after China. As per the
World Bank data (for 2016), China’s population is 1359 million and India’s
population is 1324 million. However, the geographical area of India, in terms
of square kilometres, is much smaller than that of China. The demographic
measure that accounts for number of people per square km of land area is
called the Density of Population (DoP). It is measured as:
Population of a Geographical Area
��� =
Land Area in Sq. Km of that Geographical Area
As per 2011 Census Report, DoP of India is 382. As per World Bank data, for
2016, the DoP of India is 445, of China 147, USA 35 and Australia 3.
The figures show that amongst these countries, India is the most thickly
populated country. The figures also point out that the population of the world
is not distributed uniformly across the regions. This is true within India also.
Some states of India are densely populated whereas others are relatively
sparsely populated. The states of Bihar (1106), West Bengal (1028), Uttar
Pradesh (829) are densely populated. On the other hand, the states of
Himachal Pradesh (123), Sikkim (86), Mizoram (52) and Arunachal Pradesh
(17) are sparsely populated. Broadly speaking, territories with Mountains,
hills, deserts and large dense forest areas are sparsely populated whereas
territories having fertile land, industries, better transport facilities, etc. are
densely populated.
5.2.1 Growth of Population
The size of the population of a given area changes over time through: (i)
migration and (ii) natural factors like births and deaths. The change in the
size of population over time, expressed as a percentage to its base year value,
is called the growth of population. Thus, the rate of growth of population (or
simply the growth rate) is estimated as: Rate of Growth of Population (RGP)
� ��
= ���� � × 100 where, Pt is the size of absolute population at time point ‘t’
�
and Pt+1 is the size of absolute population at time point ‘t+1’. The growth rate
of the population is expressed in percentage.

70
The population in India was 1028.5 million in 2001; it increased to 1210.6 Demographic
million in 2011. The Rate of Growth of Population over the period 2001 to Features

2011 is 17.7 (or 18) percent. However, when the decadal rate of population
growth is divided by 10, we get the average annual growth rate of population
which in the present case is 1.8 percent. The rate of decadal growth of India’s
population increased from 22 percent in 1951-61 to 25 percent in 1961-71.
After that, it has been declining steadily at a very slow pace at first but at an
accelerated rate since 1991. The growth rate of population, as per 2011
census, is not uniformly the same across the states of India. Some states have
exhibited higher average annual growth rate than the national growth rate. For
instance, Meghalaya (2.8 percent), Bihar (2.6 percent), Arunachal Pradesh
(2.6 percent), Jammu & Kashmir (2.4 percent), Rajasthan (2.2 percent), etc.
The lowest growth rate is in Nagaland (– 0.6 percent).

5.3 VITAL STATISTICS

To understand the population dynamics, it is important to study the birth
(fertility) rate, death (mortality) rate and migration pattern along with their
methods of measurement in a scientific way. The basic demographic equation
is:
Pt+1 – Pt = (Births – Deaths) + (In – Out)
i.e. Population Change = Natural Growth of Population + Net Migration.
Vital Statistics deals with the two demographic fundamentals i.e. births
(fertility) and deaths (mortality). It is also concerned with migration,
marriage, longevity, etc. In this section, we shall discuss four types of fertility
and four types of mortality rates.
5.3.1 Fertility Rates
The four important types of fertility measures are: (i) crude birth rate (CBR),
(ii) general fertility rate (GFR), (iii) age specific fertility rate (ASFR) and (iv)
total fertility rate (TFR).
Crude Birth Rate (CBR): The Crude Birth Rate (CBR) in an area, in any
year (or time) is defined as the number of live births in that area in that year
�
or time per thousand population. Thus, CBR = � × 1000, where B is the total
number of live births registered in a defined geographical area (or a social
group) within a time frame (usually a complete year) and P is the mid-year
population in the defined space and time. Trend in CBR in India shows that
the CBR has come down from 40 during 1941-51 to about 26 in 1991-2001
and about 22 in 2011. The main reasons for the decreasing trend in CBR in
India are: (i) the promotion of family planning programmes by government,
(ii) spread of literacy and increase in education level of people, (iii)
increasing awareness among the people of the benefits of adopting a small
family norm, (iv) more participation of women in paid work and (v)
increasing opportunity cost of child bearing and rearing for women. The CBR
in India compares to about 14 in U.S., 12 in China and 9 in Japan. Thus,
compared to developed countries, CBR in India is high. The major factors
responsible for this are: (i) high infant mortality rate; (ii) strong preference for
71
Population and a son; (iii) high economic value of children in traditional agrarian society; (iv)
Human
Development
lack of knowledge about family planning and contraception; (v) low age at
marriage and polygamy; (vi) low education of parents; and (vii) religious
norms and practices.
Merits and Demerits of CBR: CBR is easy to understand and estimate. CBR
can reasonably compare well the birth rates at two not very distant points of
time of the same region since the age and sex distribution of population
generally do not change in short term. CBR takes into consideration the total
population almost half of which are males who are not directly involved in
child birth. Moreover, only a restricted segment of women population (15-49
year) has the ability of child bearing.
General Fertility Rate (GFR): GFR is the number of births per year per
thousand women of childbearing age (aged 15-49). It is computed as: GFR =
�
���� � × 1000, where B refers to the total number of live births (as in CBR)
∑���� ��
���� �
and, ∑���� �� refers to the mid-year population of women in the age group
15-49 which are generally considered as the two limits of the ‘child bearing
age’ of women.
Merits and Demerits of GFR: GFR overcomes the crude approach adopted in
case of CBR. It is more scientific since it considers total births with reference
to women population of child bearing age only. The age of puberty is not the
same for girls coming from cold, temperate and hot climatic regions.
Therefore, before applying the formula, a judicious decision regarding the
two limits of child bearing age of women is required to be decided.
Moreover, fertility varies with age i.e. within the two limits of fertility span.
Therefore, it is inappropriate to consider all women segment of age group 15-
49 together.
Age Specific Fertility Rate (ASFR): The ASFR for any age group is the
ratio of number of live births per woman to the mid-year female population of
B
the particular age group. The ASFR is thus given by: ASFR = ��Px × 1000,
x
where Bx is the number of live births given by women in the age group of x to
x+1 and fPx is the average size of the women population in the age group of x
to x+1. ASFR is usually calculated for every single year of 15 to 49 age or for
some broad age groups like 15-19, 20-24, …..The above formula shows
ASFR of women of age x. We can compute ASFR between any two age
limits by making necessary modifications in numerator and denominator.
Merits and Demerits: Since it is age-specific, the fertility rate of women
belonging to different age groups within 15-49 is taken into account.
Generally ASFR remains small in early ages of puberty, it rapidly increases
till around 30 and then declines until it comes down to almost zero around the
age of 49 years. Not all women belonging to child bearing age are exposed to
the chance of child bearing but only those who are married in that age group
and being able to give birth. ASFR ignores both the marital status as well as
the infertility element of some women in the child bearing age-group.
Total Fertility Rate (TFR): TFR provides a general index of fertility in a
72 population under two assumptions: (i) every woman who enters the child
bearing age gives live births as per the ASFR for each age and (ii) no woman Demographic
will die before she leaves the reproductive period. TFR is calculated by the Features
����
��
formula: TFR = � � , which is simply the summation of ASFRs.
�����
����
The expression tells us that if 1000 women enter the child bearing age
together, then TFR is the number of children to be born live to these women
before the time of their exit from their reproductive period. If the multiplier
1000 is dropped, TFR will simply mean the average number of babies to be
born to mothers at the end of their reproductive phase. When ASFRs are
calculated for age groups 15-19, 20-24,.... 45-49, TFR is computed as: TFR =
� � ∑��
�� ����
����
.

Merits and Demerits: TFR is the most frequently used index of birth rate. It
takes into account the entire fertility span of women population and at the
same time fertility of women belonging to particular age groups. TFR is less
precise because of the fact that not every woman shall start her reproductive
period at age 15 and some would not bear children.
TFR was estimated to be 5.2 for India in 1971 but is estimated to have come
down to 3.6 in 1991 and further to 3.0 in 2002. According to UNDP Human
Development Report 2001, TFR for the world population has dropped from
4.5 in 1975 to 2.8 in 1995-2000. In India, TFR has declined from 3.0 in 2002
to 2.4 in 2012. According to latest data available, TFR stands at 2.3 in 2013.
Such a high value for TFR means that at the current prevalent age-specific
fertility rates, a woman in India would add, on an average, 2.4 children to the
population before she completes her reproductive life. Although TFR has
been brought down to the level of 2.3 in 2013 over a period of more than 40
years, it is still high enough and 0.2 higher than Replacement Level Fertility
(i.e. TFR = 2.1) which is a matter of great concern.
5.3.2 Mortality Rates
We shall discuss four mortality rates viz. CDR, ASDR, IMR and expectation
of life at birth. The Crude Death Rate (CDR) or the Crude Mortality Rate
(CMR) in any year in an area is defined as the number of deaths in the year
�
per thousand population i.e. CDR = � × 1000, where D refers to the total
number of deaths from all causes registered in a defined geographical area (or
a social group) within a time frame (usually a calendar year) and P is the mid-
year population in the defined space and time.
Merits and Demerits: This is the most frequently used and most easily
calculated and understood index of mortality. It gives a general picture of
mortality situation prevailing in the entire population under consideration.
However, it is based on the assumption that the risk of dying for every
individual (P) is the same. It is not desirable to compare death rates of two
countries, two regions or two communities on the basis of CDR because of
this limitation. CDR in India has declined from a high rate of 49 per annum
per thousand during 1911-21 to 9 in 2001, 8 in 2006 and further to 7 in 2012.

73
Population and Age-Specific Death Rate (ASDR): Death occurs at all ages and the risk of
Human
Development
mortality varies with age. It is therefore necessary to analyse death rates for
populations at different ages (or age groups) by calculating age-specific death
���
rates (ASDR). This is calculated as: ASDR = ��� × 1000 where nDx is the
number of deaths recorded for persons in the ages x to x+n–1 and nPx is the
mid-year population size for this age group. When n=1, the ASDR becomes
�
annual age specific death rate and is given by: AASDR = �� × 1000.
�

Merits and Demerits: ASDR makes comparison between two population

groups more meaningful. It reveals whether persons in some specific age-
group have the same probability of dying as in the total population. However,
estimation of ASDR is difficult because unless we know accurately the age of
the deceased, errors are bound to creep-in.
Infant Mortality Rate: Children face a greater risk of mortality (i.e. deaths)
than adults, especially during the first year of their life. The health status of
infants (i.e. those who are less than 12 months old) is an important indicator
of the level of healthcare and medical facilities available in an area. The
Infant Mortality Rate (IMR) is defined as the number of infants dying ‘under
one year of age’ in a year in an area per thousand live births.
��
That is: IMR = ��� × 1000 where 1D0 is the number of infant deaths under age
�
1 year (< 1 year) and 1B0 is the number of live births in the same year and
area. IMR for India was about 129 in 1971. It declined to 57 in 2006 and
further to 42 in 2012. It varies widely across states. In 2012, at the lower end
are Kerala (12), Manipur (10) and Goa (10) and at the upper end are Madhya
Pradesh (56), Assam (55), Odisha (53) and Uttar Pradesh (53).
Expectation of Life at Birth: It is the average number of years a new-born
child is expected to live under current mortality conditions. Expectation of
life can be estimated at any age. For instance, expectation of life at age five is
the average number of years a child aged 5 today is expected to live.
Expectation of life at birth for India has increased from 41 years in the period
1951-61 to 56 years in 1981-85 and further to 61 years in 1992-96 and to 66
years in 2006-10. It varied (in 2006-10) from the highest in Kerala (74) to the
lowest (62) in Assam among the major states of India.
Check Your Progress 1 [answer within 50-100 words within the space
given]
1) How is ‘density of population measured’? What is its current density for
India and how does it compare with those of other countries?
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
74
2) How is the DoP distributed across states in India? Demographic
Features
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
3) How is CBR defined? What has been its trend in India? How does the
CBR in India compare with that in countries?
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
4) How is GFR superior to CBR? In spite of this, what is GFR’s limitation?
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
5) How is TFR estimated? How is it superior to all other fertility rates?
What is the significance of the term ‘replacement level fertility’?
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
6) How is IMR defined? What is its significance?
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................

5.4 DEMOGRAPHIC TRANSITION

Demographic transition is a process by which countries transit from a
situation of high birth and death rates to one of low rates in both. Less
Developed countries (LDCs) typically have high birth and death rates: as with
development slowly picking-up, death rates tend to fall earlier than birth
rates, resulting in rapid population increase. Advanced countries tend to have
75
Population and low birth and death rates, and a low or even negative rate of natural increase.
Human
Development
Theory of demographic transition is based on the actual demographic
experience of Western Countries. C. P. Blacker (1945) identified five distinct
phases of demographic transition as follows.
1) High Stationary stage, characterised by high birth rates and high death
rates.
2) Early Expanding Stage characterised by falling birth rates with a time
lag, for decreasing mortality.
3) Late Expanding Stage characterised by falling birth rates but rapidly
decreasing mortality.
4) Low stationary stage of population characterised by low birth rates
balanced by equally low mortality.
5) Declining stage of population with low mortality and deaths exceeding
births.
The figures for CBR and CDR in India for the period 1901-2011 is given in
Table 5.1. The data indicates that India has been experiencing a fast decline
in death rate since 1931. On the other hand, the birth rate has remained very
high during the period from 1901 to 1951. This, therefore, was the ‘early
expanding stage’ of population i.e. the second stage of demographic transition
in India. From 1981, both the birth rate and the death rate has been declining
fast indicating that India is now in ‘late expanding stage’ of demographic
transition. In 2010-15, at the World level, 83 countries were experiencing
below replacement level fertility i.e. negative natural growth rate of
population. Thus, in spite of including in-migration, countries like Japan (–
0.1), Spain (–0.2), Greece (–0.4), Romania (–0.8), Lithuania (–1.6), etc. have
registered negative average annual growth rate of population indicating their
present stage of demographic transition to be in the 5th stage. Some of the
major demographic features in which economies would experience significant
shift during the course of demographic transition are: (i) urbanisation; (ii)
changing sex-ratio; (iii) structure of population pyramid; and (iv) dependency
ratio.
Table 5.1: CBR and CDR in India – 1901 to 2011

Year CBR CDR

1901 46 44
1911 49 43
1921 48 47
1931 46 36
1941 45 31
1951 40 27
1961 41 23
1971 41 19
76
 1981 37 15 Demographic
Features
1991 33 11
2001 25 9
2011 22 7

Source: Health and Family Welfare Report, 2013.

5.4.1 Urbanisation
Urbanisation is a process by which societies become more urban. It refers to a
population shift from rural to urban areas. Thus, it is a case in which the rate
of growth of urban population is more than the rate of growth of rural
population. Two simple measures to gauge the degree of urbanisation are the
following.
i) Percentage of Population in Urban areas (PU):
���� �� ����� ����������
PU = ���� �� ����� ����������
× 100

Higher the value of PU, higher is the degree of urbanisation.

ii) Ratio of Urban-Rural Population (UR):
���� �� ����� ����������
UR = ���� �� ����� ����������
× 100

Higher the value of the ratio UR, higher is the degree of urbanisation.
The share of urban population in India (PU) has increased from about 11
percent in 1901 to about 17 percent in 1951 and further to 31 percent in 2011.
There has been a gradual increase in the trend of urbanisation in India over
the period. The Urban-Rural ratio (UR), on the other hand, has increased
from 21 percent in 1951 to 45 percent in 2011. The rate of urbanisation has,
however, been uneven across the states. For instance, the NCT of Delhi is the
most urbanised with as much as 98 percent of its population living in urban
areas. Goa is the most urbanised among the states with 62 percent of its
population living in urban areas. The least urbanised states are Himachal
Pradesh (10 percent) and Bihar (11 percent). Census classification treats areas
with population above a certain level as Urban Areas. Thus, every census has
a potential for reclassification certain areas into 'urban', though people in
those areas continue to live in the same place.
Still urbanisation is considered beneficial because of better opportunity for
earning higher incomes, better infrastructure and better awareness and
response of people to social issues in general. Urbanisation therefore
contributes to modernisation and social change, the latter through lower birth
rate, lower death rate, lower IMR and lower fertility rates. These are mainly
due to higher levels of education and healthcare facilities which are much
better in urban areas than in rural areas.
The pattern of urbanisation in India is characterised by continuous
concentration of population in large cities without adequate expansion of
resource base and amenities. As a result, it has generated problems in the
77
Population and areas of housing, transport, water supply and sanitation, water, air and noise
Human
Development
pollution, social infrastructure (schools, hospitals etc), urban poverty and
unemployment and growth of slum areas.
5.4.2 Sex Ratio
The gender composition of the population is measured by the sex ratio,
defined as the number of females per thousand males. It has been observed
that females outnumber males in developed countries. India’s sex ratio,
however, shows that the society is masculine in respect of this demographic
feature. The sex ratio in India has declined from 972 in 1901 to 933 in 2001
which slightly increased to 943 in 2011. It varies widely across states: from
1084 in Kerala to 879 in Haryana and among Union Territories, from 1037 in
Pondicherry to 618 in Daman & Diu (as per 2011 census). The declining
trend in the sex ratio in India has been due to a number of factors like: high
Maternal Mortality Rate (MMR), high IMR among the girls, high Child
Mortality rate among the girls, strong son preference prevalent among the
parents, female illiteracy and low level of education, illegal female infanticide
and female foeticide, etc. Efforts to promote gender equality through
emphasis on education of girls, empowerment of women, legislation to
prevent domestic violence against women and ban on the use of pre-delivery
sex determining technology have been scaled up to tackle these issues in the
recent years in India. The latest initiative launched viz. ‘Beti Bachhao, Beti
Padao’ is worth noting in this context.
5.4.3 Population Pyramid
Population Pyramid or age-sex pyramids are an elegant and useful way of
graphically presenting the age-sex distribution of population. A pyramid
comprises of two ordinary histograms placed on their sides. The rules of
drawing pyramids are generally the same as those for plotting histograms, but
there are certain conventions and special features. These are:
first, pyramids are always drawn showing the male population on the left
hand side and the female population on the right hand side. The young are
always at the bottom and the old at the top. It is conventional to use single
year or 5-year age groups, though other groupings are also possible.
second, the last open ended age-group is normally omitted, but in some cases
it is shown.
third, the vertical scale shows the age groups and the horizontal scale shows
the percentage of population or absolute number of population of each group.
In case of percentages, the percentages are to be calculated using the total
population of both sexes combined as the base.
fourth, the horizontal scale must be uniform for both the sides of the pyramid.
The vertical scale must also be uniform for both the sides while drawing the
histograms.
The population pyramids of India for 2001, 2016 and 2026 (projected) are
shown in Fig. 5.1. They reveal that the shape of the population pyramid has
been changing gradually. In 2001, it had a much broader base than that in
78
2016 and 2026 implying larger proportion of young children in the population Demographic
in 2001 compared to 2016 and 2026. The proportion of elderly has also Features

grown over the period as revealed by the slightly bigger size of histograms at
the top of population pyramid-2026 (Projected). The latter is because of
population ageing. The pyramids of developed countries are almost
rectangular in shape indicating lower proportion of children and a higher
proportion of the adults and the elderly in the population. The larger
proportion of working age population in India particularly belonging to age
groups 20-24 to 55-59 in pyramids 2016 and 2026 point out towards the
country’s entering the phase of demographic dividend.

Fig. 5.1: Population Pyramid of India 2001, 2016 & 2026

Source: Internet, http://www.populationpyramid.net/India/2015.

5.4.2 Dependency Ratio

It is customary to classify age data in five-year age groups, such as 0-4, 5-9,
10-14, 15-19, 20-24 years and so on. Such presentation of population age-
group-wise is useful for a wide variety of analytical purposes. Usually,
population data is clubbed for certain age-groups to get an idea on the
potential labour force, economically active population, etc. as follows.
79
Population and Table 5.2: Classification of Population by Age-Group
Human
Development
Age Group Classification
0-14 Children
15-24 Young
25-59 Economically productive
60-59 Elderly
80+ Aged

The age-group wise distribution of population facilitates estimation of the

size of population among children, young, economically productive, elderly
and aged segments of the population by country and region. Different
indicators of development can then be estimated among which ‘dependency
ratio’ is one important indicator of development. The UNDP HDR 2016 has
defined the ‘dependency ratio’ separately for young age population and old
age population as follows.
����� ���(����)����������
(A) Young-age dependency ratio = ���������� ���� (�����)
×100
��� ���(�� ��� �����)����������
(B) Old-age dependency ratio = ���������� ���� (�����)
×100

As per the above, the values of (A) and (B) for India in 2015 were 44 and 9
respectively. The corresponding ratios for a developed country like USA are
29 and 22. In less developed countries, dependency ratio is generally high. In
India, the ‘dependency ratio’ is measured by taking both the 0-14 and 60+
population as follows.
���������� �� �������� (����)� ���������� �� ������� (���)
(C) Dependency Ratio = ���������� ���� ( �����)

Children and elders i.e. those in the age groups of 0–14 and 60+ are expected
to be taken care of by the working age population 15-59. The Dependency
ratio at (C) above indicates the responsibility of dependents per member of
the working age group population. A favourable dependency ratio tends to
boost savings. This is possible only if the working age population is
productively employed. The Dependency Ratio for India has come down
from 0.92 to 0.56 between 1951 and 2001.

5.5 POPULATION AGEING

One of the prominent global demographic events of 21st century is population
ageing. Population ageing is a course of demographic change in which the
share of aged people increases in total population with a simultaneous
decrease in the share of younger ages. The main factors behind the incidence
of population ageing are decline in mortality rate followed by decrease in
fertility rate along with increase in life expectancy rate. In 1950, the global
share of 60+ people was 200 million or 8 percent of the total population. This
percentage has increased to 11 in 2011 and is projected to double to 22 in
2050. More specifically, in 2045, it is projected that the number of aged
persons will exceed the number of children in the world as a whole. In India
80
also the percentage of 60+ people is increasing steadily. For instance, the Demographic
percentage of aged population to total population was 5.5 percent in 1951 but Features

has increased to about 7.5 percent in 2001 and further to 8.6 percent in 2011.
It is projected that the number of elderly population would be about 17
percent of the total population in India by 2051.
5.5.1 Demographic Dividend
The recent rapid fertility decline in some parts of the world has opened up a
new window of opportunity for achieving faster growth rate in economic and
human development. With steady decline in fertility, there will be fewer and
fewer children in the age group 0-14. The past high fertility ensures the
growth of the present workforce and the present low fertility implies smaller
size of dependent child population in future. This feature of population trend
is called ‘demographic window or dividend’. More specifically, the dividends
that accrue are: (i) higher labour supply for larger economic activities; (ii)
fewer children with better health for women’s health, education and
opportunity to join work force (iii) larger size of working age adults with
larger earnings and larger savings i.e. improved capital supply for economic
activities; (iv) less investment will be required on children at both micro and
macro level as less number of children will be there to look after in the
country; (v) better human development due to larger earnings, more
investment in higher education and better health for women and children
(China improved its ranking in HDI by resorting to one-child family planning
norm); and (vi) because of fertility decline and increase in the population of
working age people, the dependency ratio will decline. Low dependency ratio
is helpful in economic development.
Typically, this window of opportunity, or the availability of the demographic
dividend, lasts for 30 to 40 years, depending upon the country. India reached
the point of demographic window in 2011. The proportion of those aged less
than 15 years is still above 30 percent and the proportion of those aged 65 and
above is below 15 percent. The share of the working age population is rising
(almost 60.3 percent in 2011) in India. On the other hand, Work Participation
Rate (WPR) is low at 39.8 percent in 2011. Urgent steps are, therefore,
required to: (i) generate employment opportunities on a scale sufficient to
eradicate unemployment and underemployment; and (ii) prioritise skill
development among the youths to utilise new avenues of self employment;
and (iii) extend the reach of the modern educational and training system so as
to enable larger sections of the population to benefit and thereby participate in
the development process. Only then can India reap the benefits of
‘demographic dividend’.
5.5.2 National Population Policy (NPP)
The National Population Policy, 2000 (NPP 2000) reiterates the commitment
of the government towards voluntary approach in administering family
planning services. It provides a policy framework to meet the reproductive
and child health needs of the people to achieve the net replacement levels in
terms of TFR. The immediate objective of the NPP 2000 is to address the
unmet needs for contraception, healthcare infrastructure and to provide
81
Population and integrated service delivery for basic reproductive and child health care. The
Human
Development
medium term objective is to bring the TFR to replacement level by 2010
through the implementation of inter-sector operational strategies. The long
term objective of NPP 2000 is to achieve a stable population by 2045 in
conformity with requirements of the country to ensure sustainable economic
development. The government has already taken several steps and initiatives
under the immediate objectives of NPP 2000. As a result, TFR has declined
from 3.0 in 2002 to 2.3 in 2013. As per latest data available, 24 states/UTs
have achieved replacement level of fertility of TFR =2.1 by 2013.
Check Your Progress 2 [answer within the space given in 50-100 words]
1) What is urbanisation? How is it measured? What has been the trend in
India’s urbanisation process as per these indicators?
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2) What does the population pyramid depict? How does it differ between
the developing and the developed countries?
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3) When does a country signifies to have entered a phase of ‘demographic
dividend’? What are its implications for economic planning?
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82
5.6 LET US SUM UP Demographic
Features

Population assessment for its demographic features is important for economic

planning. Different sections of population like young age children, women in
the reproductive age group, labour force in the economically active section
and the old aged persons – require different kinds of support services from
the government in general and the various social infrastructure in particular.
Assessment of changing demographic profile is important for economic
planning from this point of view. In this context, the unit has introduced
several concepts like growth rate in population, fertility and mortality rates,
demographic transition, population ageing, etc. India has entered its phase of
‘demographic dividend’ but several facilities and services to make use of this
window of opportunity is as of now still lacking. These include adequate
employment opportunities to support its expanding labour force and skill
development programs to increase their marketability.

5.7 SOME USEFUL BOOKS AND REFERENCES

1) Cassen, R.H. (1958). India : Population, Economy, Society, Chapter 4,
The Macmillan Co. of India Ltd., Delhi.
2) Colin Newell (1994). Methods and Models in Demography, John Willey
and Sons, England.
3) Human Development Report, (2016). UNDP, New York, NY 10015.

5.8 ANSWERS OR HINTS TO CHECK YOUR

PROGRESS EXERCISES
Check Your Progress 1
1) It is measured as the ratio of ‘population’ to ‘square km of land’. 445 for
2016. It is 147 for China, 35 for US and 3 for Australia.
2) It is high in states like Bihar, W. B. and U. P. (with a DoP ranging from
829 to 1106) and low in states like H. P., Sikkim, Mizoram and
Arunachal Pradesh (ranging from 17 to 123).
3) It is defined as the ratio of ‘number of live births’ in an area per ‘1000
mid-year population’. It has come down from 40 in 1951 to 22 in 2011. It
is: 14 in US, 12 in China and 9 in Japan.
4) Unlike CBR, in the denominator it takes into account only the women in
the child bearing population. But it does not also discriminate between
women coming from different climatic regions with differing fertility
potential.
�× ∑��
�� ����
5) TFR is estimated by: TFR = ����
. The multiplier 5 is applicable
when the age groups considered are at 5-yearly intervals. Its takes into
account the entire fertility span in each age group. Replacement level
fertility means that the ‘number of children in the population are
sufficient to replace the parents’ ensuring stability in population.
Generally, TFR = 2.1 is considered as replacement level fertility. 83
 ���
Population and 6) It is defined as: IMR = × 1000. It indicates the level of healthcare and
Human ���
Development medical facilities available in an area.
Check Your Progress 2
1) It refers to the population shift from rural to urban areas. It is measured
by PU i.e. percentage of population in urban areas and UR i.e. ratio of
urban to rural population. In terms of PU, it has doubled from 15 percent
to 31 percent over 1951-2011. As per UR, it has increased from 21 to 45
percent over 1951-2011.
2) They depict the distribution of population in percentages by age groups
with a broader base indicating more children which is usually the case in
developing countries. In developed countries it is rectangular in shape
indicating that old age population is higher.
3) This is indicated by the portion of the population pyramid for working
age group (20-59) to be wider. It calls for economic planning to increase
the jobs available and also to match the skill needs of the market to avoid
the consequences of mismatch in it.

84
UNIT 6 EDUCATION SECTOR*
Structure
6.0 Objectives
6.1 Introduction
6.2 Human Capital and Human Development: Distinction
6.3 Education Sector in India
6.3.1 Elementary Education
6.3.2 Secondary Education
6.3.3 Higher Education

6.4 Educational Attainment/Outcomes

6.4.1 Gender
6.4.2 Quality

6.5 Financing of Education

6.5.1 Role of State Versus Market Funding
6.5.2 Public Expenditure on Education
6.5.3 Alternative Sources of Financing

6.6 Let Us Sum Up

6.7 Some Useful Books and References
6.8 Answers or Hints to Check Your Progress Exercises

6.0 OBJECTIVES
After reading this unit, you will be able to:
• distinguish between the terms ‘human capital’ and ‘human
development’;
• describe the growth in the Education Sector (ES) in India;
• analyse the adequacy of expansion in the ES in terms of its quantitative
and qualitative dimensions;
• critique the performance of ES with the educational attainment in terms
of its gender and quality dimensions;
• discuss the trend in Public Expenditure on ES in India with a
comparative profile of the same in other countries; and
• explain the role of ‘state’ versus ‘market’ in financing education with
an outline of alternative sources of financing the ES.

6.1 INTRODUCTION
Education contributes to building up what has come to be known as ‘human
capital’. Human capital is distinct from ‘physical capital’ but is
complementary to the latter. Physical capital facilitates economic growth
which, in turn, creates conditions which demand better education facilities.

*
Prof. Sebak Jana, Vidyasagar University
85
Population and This results in human capital formation in the economy. Human capital
Human
Development
formation, in turn, spurs economic growth. Thus, these social aspects of
development invariably attract the attention of both policy-planners and
political leaders albeit with differing motivations for each. In this context, the
present unit discusses the issues relating to one of the two specific sub-
sectors of social sector development viz. education sector in the Indian
economy (the other one being health).

6.2 HUMAN CAPITAL AND HUMAN

DEVELOPMENT: DISTINCTION
Human capital can be defined as the body of knowledge possessed by the
population and the capacity of the population to use the knowledge
effectively. Human capital therefore includes all the knowledge, talents,
skills, abilities, experience, intelligence, training, judgement, and wisdom
possessed individually and collectively, the cumulative total of which
represents a form of wealth available to nations and organisations to
accomplish their goals. Till the late 1950s, economists and other social
scientists did not pay much attention to the role of investment in human
capital as an important determinant of economic development. The birth of
this idea can be traced to the presidential address of Prof. Theodore W.
Schultz to the American Economic Association in December, 1960. The
human capital theory propounded by Schultz (1961) laid a strong foundation
for treating education as an investment in human beings and for treating it as
an important source of economic growth. According to the human capital
theory, education transforms raw human beings into productive ‘human
capital’ by imparting knowledge and inculcating skills required by both the
traditional sector and the modern sector of the economy. It thus makes
individuals more productive members of the society, not only in the market
place but also in the households and also in the whole society. Available
evidence in almost all the countries, including India, establish significant
positive association between proportion of people below the poverty line and
the proportion of illiterate persons.
Human development, on the other hand, is defined as the process of enlarging
people’s freedoms and opportunities thereby improving their overall well-
being. Human development is about the real freedom of ordinary people with
which they have to decide who they want to be, what they want to do and
how they should live. The concept of human development was developed by
the economist Mahbub ul Haq and is based on the idea that education and
health are integral part of human well-being because only when people have
the required ability and a healthy body, they will be able to lead a good and
meaningful life. Human development is thus a broader concept which
considers human beings as ends in themselves. Human development occurs
when majority of people in the economy are educated and healthy.

6.3 EDUCATION SECTOR IN INDIA

The role of education in facilitating social and economic progress is well
recognised. It opens up opportunities leading to enhancement of both
86
individual and group potentials. Education, in its broadest sense, is the most Education
crucial input for empowering people with skills and knowledge, giving them Sector

access to productive employment opportunities. Improvements in education

are not only expected to enhance efficiency but also augment the overall
quality of life. The current growth strategy being pursued in India places the
highest priority on education as a central instrument for achieving rapid and
inclusive growth. It encompasses programmes designed to strengthen the
education sector covering all segments of the education pyramid viz. (i)
elementary education, (ii) secondary education, and (iii) higher education.
6.3.1 Elementary Education
Elementary Education i.e. class I-VIII consisting of primary (I-V) and upper
primary (VI-VIII) levels, is the foundation of the educational system pyramid
and has been emphasised in all our programmes of development. The goal of
universalisation of elementary education (UEE) got a big push with the
adoption of the Sarva Shiksha Abhiyan (SSA) programme in 1999. The
scheme has been guided by five principles viz. (i) universal access, (ii)
universal enrolment, (iii) universal retention, (iv) universal achievement and
(v) equity. Besides these, the SSA recognises it as imperative to ensure good
quality elementary education to ‘all children in the age group of 6 to 14
years’. To ensure this, the 86th Constitutional Amendment (2002) included a
new Article (21-A) providing for ‘free and compulsory education to all
children of 6 to 14 years of age as a Fundamental Right’. The growth of
‘primary and upper primary’ schools in India has been 6 times (from 0.2
million to 1.3 million) over the period 1951-2015. The enrolment in these
schools has increased 9 times (from 22 million in 1951 to 198 million in
2015).
6.3.2 Secondary Education
Secondary education serves as a bridge between elementary and higher
education. Like the elementary education, secondary education also has two
parts viz. secondary (covering classes 9th and 10th) and senior secondary
(classes 11th and 12th). Since universalisation of elementary education has
become an accepted goal, it has become essential to push this vision forward
towards universalisation of secondary education, something which has
already been achieved in a large number of developed countries and the
newly industrialised East Asian economies. Till now, the thrust of secondary
education has been on improving access and reducing disparities by
emphasising on the Common School System in which it is mandatory for
schools in a particular area to take students from low-income families in the
neighbourhood. The thrust has also been on revision of curricula with an
emphasis on vocationalisation of education. In essence, vocationalisation
means focusing on providing employment-oriented courses. Other areas of
thrust are: (i) expansion and diversification of the open learning system, (ii)
reorganisation of teacher training, etc. These objectives till now have,
however, been achieved only partly. The number of institutions for secondary
education has grown from 0.1 million in 2001 to 0.2 million in 2015. The 87
Population and enrolment in these institutions has grown from 29 million in 2001 to 62
Human
Development million in 2015. Thus, both the number of institutions and their enrolment
have grown by 2 times over the period 2001-15.
6.3.3 Higher Education
The investment made in higher education in the 1950s and 1960s has given
India a strong knowledge base in many fields contributing significantly to
economic development, social progress, and strengthening political
democracy in Independent India. The number of colleges has increased from
about 0.1 million in 1951 to 3.8 million in 2015 i.e. a 38 times increase.
Likewise, the number of universities has increased from 27 in 1951 to 760 in
2015 i.e. a 28 times increase. The combined enrolment in these ‘colleges and
universities’ has increased from 0.4 million in 1951 to 34.2 million in 2015
i.e. by nearly 86 times. However, despite the expansion that has occurred, the
system is under stress to supply the required numbers of skilled human
power, equipped with the required knowledge and technical skills helpful in
catering to the demands of the economy. The accelerated growth of the
economy has already created shortages of high-quality technical manpower.
Moreover, unlike the developed countries where the young working age
population is fast shrinking with higher dependency ratio, India is in a stage
of demographic transition with about 70 percent of the population below the
age of 35 years. But this advantage can be realised to economic advantage
only if opportunities for youth are expanded on a scale and diversity spread
over different fields of basic sciences, engineering and technology,
healthcare, architecture, management, etc. This is possible only if rapid
expansion is initiated along with long overdue reforms in the higher,
technical and professional educational sectors.
Check Your Progress 1 [answer within the space given in about 50-100
words]
1) How is Human Capital defined? To which economist, the credit of
getting the importance of human capital recognized attributed?
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2) How is Human Development different from Human Capital?
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88
3) What are the five principles by which the programme SSA is governed? Education
Sector
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4) What has been the magnitude of expansion in respect of ‘elementary
education’ in India?
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5) What has been an important feature of the Common School System in
the ‘secondary education’ system in the country?
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6) What has been the extent of expansion in respect of ‘higher education’ in
India?
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7) Would you say that the expansion in the education sector has kept pace
with the requirements of the economy? Why?
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6.4 EDUCATIONAL ATTAINMENT/OUTCOMES

Education is the basic requirement which has now been made a fundamental
right through the enactment of RTE (i.e. right of children to free and
compulsory education act or the Right To Education – RTE). While higher
education is important, elementary education serves as the base over which
the super-structure of further education can be built up. Enrolment in schools 89
Population and have improved substantially in recent years but the performance of students
Human
Development
in basic aspects of reading, writing and arithmetical operations have remained
low. Further, substantial gender-bias in both access to and completion of
education has remained as a major cause of concern. Owing to these, wide
regional variation exists even within the sub-standard performance of the
basic education system. Factors like: (i) poverty, (ii) presence of a wide
child-labour market, (iii) absence of assured employment after schooling and
(iv) infrastructural problems are identified as responsible for the ills plaguing
the elementary education system in India. Providing incentives for attending
schools, making the schooling process attractive to the children, streamlining
the middle and high school curriculum to vocational and job-oriented courses
and providing better infrastructure in schools are some of the policies needing
to be focused upon to improve the scenario.
Literacy rate is regarded as one of the basic indicators to reveal the disparity
in educational attainment. The urban-rural gap in this respect has fallen
substantially (from 34 percent in 1961 to 16 percent in 2011). Despite this,
the progress in rural India has not been enough to catch up with the urban
literacy levels (urban literacy rate is 85 percent as opposed to 69 percent for
rural India in 2011). State-wise attainment shows that while Kerala (94
percent) [along with Mizoram, Lakshadweep and Tripura] has ranked at the
top in overall literacy, Bihar has remained at the bottom (61.8 percent) in its
overall literacy. The rural-urban disparity is the lowest in Lakshadweep and
Kerala, both of which are among the high performing states. Disparities in
attainment have also remained on many other fronts, most important of which
are in terms of gender and quality.
6.4.1 Gender
There are two indicators which reveal gender-based performance in
education. These are: (i) the gross enrolment ratio (GER) and (ii) the gender
parity index. Used in place of ‘net enrolment ratio’ when data on enrolment
by exact years of age is not available, the GER is used to reveal the general
level of participation in education. The GER is defined by level of education.
For instance, for primary education, the GER is defined as percentage of
actual enrolment to total eligible official primary school age population in a
year. A ratio of GER ≥ 1 (i.e. 100 percent) indicates that in principle a state
or country is able to accommodate all its school age population. It, however,
does not indicate the actual proportion of eligible population enrolled. In
other words, the achievement of GER of ≥ 1 is thus a necessary but not
sufficient condition of actual achievement. A typical situation where GER
can exceed 1 is when ‘over-aged’ and ‘repeaters’ are included. This
characteristic of GER makes it require a careful interpretation based on the
data used. Computed separately for males and females first, the ratio of ‘GER
for females to males’ is then defined as the ‘gender parity index’ (GPI). The
GPI in India for the recent period of 2007-13 shows that for primary and
secondary education it has crossed the level of 1. Besides this, in respect of
dropout rate also, there has been a significant improvement in gender parity
for three out of four levels of education viz. primary, secondary and senior
secondary education (e.g. in 2013-14 it is 4.1 for girls and 4.5 for boys for
90
primary education, 17.8 for girls and 17.9 for boys for secondary education Education
and 1.6 for girls and 1.5 for boys in senior secondary education). In relative Sector

terms, therefore, only in ‘upper primary’ level of education the dropout rate
for girls is higher for girls (4.5) as compared to boys (3.1) [2013-14].
Considering that the dropout rate in 1960-61 was as high as 65 percent, there
is a major improvement in this respect. One aspect on which the achievement
of improving girls’ enrolment could depend is the ‘number of female teachers
per 100 male teachers’. This figure was as low as around 20 (for each of the
three school levels) in 1951. This has gradually risen to the level of 65-80 for
different levels of education by 2011-12. Thus, while there is improvement in
this respect, there is scope for increasing the number of female teachers at all
levels of education both towards achieving greater gender parity as also to
minimise dropout rates of female children from schools.
6.4.2 Quality
A nationwide survey of children’s reading and arithmetic capabilities in rural
India is conducted every year by the NGO Pratham. Given its scale and
comprehensive coverage, its Annual Status of Education Report (ASER) is a
path-breaking initiative, being the only Indian nationwide survey for
assessing the learning achievement of children between classes I and VIII.
There are four basic tests of increasing difficulty to gauge the arithmetic
competence and the students are asked to perform each only after clearing the
lower level. These are: (i) recognition of randomly chosen numbers from one
to nine, (ii) recognition of randomly chosen numbers between 11 to 99, (iii)
subtraction of two-digit numerical problems with borrowing and (iv) division
of three-digit by one-digit numerical problems. The survey results in 2010
reveal that only 37 percent of the children in class III could recognise
numbers up to 100. Furthermore, just 27 percent of the students could reach
the next level i.e. subtraction. What is even more worrying is that the
proportion of children reaching the highest test level has consistently
declined since 2005, when the survey was first conducted. In 2005, at least 15
percent of the children in class III could perform all the tests, while in 2010
only 9 percent of the children could do so. Also, in 2010, 67 percent of the
children in class VIII could reach the highest level, while the corresponding
figure in 2005 was 70 percent. Clearly, pushing enrolment is not
automatically translating into improved learning.
Quality of higher education has also been a major concern in India. To rectify
this situation, some of the policy measures taken in this direction are: (i)
redesigning academic programme to synchronise with the market demands,
(ii) laying greater emphasis on interactive modes of learning, (iii) changes in
the assessment procedure and examinations, (iv) introduction of the semester
system, (v) teachers’ assessment, (vi) grading of institutions, (vii)
introduction of credit system to afford inter-institutional mobility, (viii)
faculty development programmes, (ix) maintenance of national database of
academic qualifications, etc. National Policy on Education in India has all
thorough laid special emphasis on improving the quality of higher education
in India by the establishment of accreditation agencies. Notwithstanding the
fact that we have 13 regulatory bodies of higher education, the quality of
91
Population and education is fairly low and content in the programmes less relevant to the
Human
Development
‘needs of the individual and the society’. Out of 3,674 colleges assessed by
NAAC, only 24.4 percent of colleges have been awarded the A grade. The
educational system suffers from what has been called ‘diploma disease’ i.e. it
does not aim at conveying knowledge and skills but is more concerned with
certification and credentialing. As such, its contribution to the growth of
human capital is minimal and is unable to meet the emerging demands for
skilled professionals.

6.5 FINANCING OF EDUCATION

Financing, and in particular mode of financing higher education, is crucial for
addressing all the major objectives envisaged for higher education viz.
expansion, inclusion and excellence. Though public financing has remained
the dominant source of financing higher education, fiscal constraints faced by
both the centre and the states and the widening gap between stagnant revenue
and the burgeoning cost have compelled the publicly funded universities to
look for additional and alternative sources of funding. As a part of the new
economic policy, policies have been framed to usher-in the private sector in
the delivery of higher education to contribute in its expansion. Between the
two extremes of public and private funding, of late, the government is
exploring possibilities of partnerships with the private sector to realise the
advantages of both the modes of funding, though we already have several
variants of PPP working in the country. We have government schools,
government aided schools and private schools. Similarly at higher education
level we have government colleges, partially UGC funded colleges, etc..
6.5.1 Role of State Versus Market Funding
The role of market as a source of funding took off post-1990s with the
suggesting of structural adjustment programmes by the WB & IMF to curtail
the public expenditure in social sectors like education. The supporters of
market considered the subsidies provided by the government as regressive as
mainly the elite gets access to higher education and hence remain the major
beneficiaries of subsidies. The funds are thus transferred from poor to the rich
since the amount that could be spent on poor gets reduced. To rectify this,
they argued that the public funding should be shifted from higher education
to school level education. Another argument put forth by the market
supporters is that the state funding of education would make educational
institutions dependent and, therefore, deprives them of the much needed
institutional autonomy for efficient functioning. To overcome this, it was
suggested that the generation of private funding should be promoted. It was
also argued that the cost recovery measures would improve the quality of
education both by making the students more diligent and instilling a measure
of accountability among the teachers. The private returns being higher than
the social returns, beneficiaries were believed to be willing to pay for their
education.
The argument of market proponents that the social rate of return to
investment in education is less than the private rate of return was countered
by the ‘for state funding advocates’ on the following grounds. First, the social
92
returns are lower only for higher education whereas for school education Education
there is a consensus that it should be regarded as a public good. Further, Sector

when positive externalities are taken into account, the resulting social rate of
return far exceeds the private rate of return. This makes the role of state
crucial in funding education. Second, consumers are often ignorant of the
benefits that they would receive by investing in education. Besides, they
cannot take into account the positive spill-over effects of their education on
the society (like improving family health, productivity, reduction in poverty
rates, etc.). Since the government is considered wiser in making such
decisions, state funding in the provision of education is required for ensuring
equality of opportunity. Further, since not every household/individual has the
resources required to invest in education, in the absence of state subsidies,
only those who could afford to pay would enrol in schools and colleges. In
other words, those who are meritorious but lack resources would be left out.
In order to meet the ends of equity, market proponents argued that the access
to education loans could be improved. However, since the capital market
suffers from its own imperfections, such measures would not suffice.
Moreover, since the human capital is embodied in individuals, it cannot be
offered as liquid collateral. What about inclusion? Will a child from poor
family take education loans and at the end of college, begin with a debt
burden? Will it be progressive? There is also a long gestation period for the
repayment of such loans to commence due to the uncertainty of future
income opportunities. Such factors would constrain both the availing of such
loans by the individuals and also the institutions from advancing the loans.
Thus, the presence of imperfect capital market becomes a major reason due to
which the role of state to invest in education needs to continue. The other
view point is that educational loans to poor people do not serve the objectives
of inclusion and equity as these loans are available for selected
courses/institutions only and hence the objective of inclusivity is far from net.
6.5.2 Public Expenditure on Education
If we consider the spill-over effects in the form of positive externalities,
education at any level, not only at the elementary and secondary levels,
merits to be treated as a ‘public good’. In its strict sense, education is
considered as a ‘merit good’. By definition, a good like ‘education’ which is
regarded by society or government as deserving public finance, is treated as a
merit good. More generally, merit goods are treated as those goods (or
services) which the government does not want people to under-consume
merely because their consumption depends upon their ‘ability to pay’. To
prevent such under-consumption, the government chooses either to subsidise
such services or provide it totally free at its point of consumption. In view of
the mixed characteristics of education i.e. of both public as well as merit
good, education is also sometimes referred to as ‘public merit good’.
Impinging on investment for providing the educational services, i.e., a huge
establishment or fixed cost as well as a recurring operational cost, the
characteristics that impinge on investment considerations of the government
are: (i) consumer ignorance, (ii) technical economies of scale, (iii)
externalities in production and consumption and (iv) inherent imperfections
93
Population and in the market like absence of credit institutions. On the issue of public
Human
Development
investment in education, it is customary to express the total allocation or
expenditure as a percentage of GDP (Table 6.1). The trend in this respect for
India shows that over the years 1961-81, public expenditure on education
doubled from 1.5 percent to 3 percent. Thereafter, it increased marginally by
just another 1 percent between 1981 and 2001 (to touch 4.1 percent in 2001).
In the post-2000 years, the public expenditure on education has declined (e.g.
2005-06, 3.3%). Since 2005-06, it has ranged from 3.5 percent in 2007 to 4
percent in 2010. The stagnation of public expenditure in education at just
around 4.1 percent of GDP (in 2014) is in stark contrast with the comparative
profile with other countries (Nepal, 4.7 percent; Germany, 4.9 percent; USA,
5.2 percent; U.K., 5.7 percent and South Africa, 6.1 percent). As stated
before, the decline in public expenditure on education in India is for reasons
of fiscal constraints whereby for elementary and secondary level more
resources are allocated but for higher education, there is a shift towards cost
recovery.
Table 6.1: Public expenditure on education as percent of GDP

Year Percent
1960-61 1.5
1970-71 2.1
1980-81 3.0
1990-91 3.8
2000-01 4.1
2010-11 4.1
2010-11 4.1

Source: MHRD, GoI.

6.5.3 Alternative Sources of Financing

With a view to reducing the burden of educational finance, many alternative
methods have been tried. One way of achieving this objective is to reduce the
subsidies given to institutions. This would entail the recovery of costs by
taking recourse to methods of cost-sharing. Cost sharing is a method by
which the burden of financing educational programmes are passed on to the
beneficiaries viz. households, industries and the students themselves. Cost
sharing is popularly effected mainly in respect of higher/professional
education programmes. Some of the methods followed under this include: (i)
increasing the fees; (ii) following discriminating fee structure; (iii) graduate
tax; and (iv) student loans.
The method of ‘increasing the fees’ has many variants. Some of these are: (a)
a uniform increase across graduate and post-graduate programmes; (ii)
increasing the fee based on the cost of provisioning of courses; and (iii)
giving autonomy to colleges and universities for deciding on the fees to be
charged. In all these cases, students opting for similar courses are levied the
94 same fee. In other words, this does not discriminate between those with
ability to pay and those who cannot afford to pay. The approach is thus Education
violative of equity considerations. To deal with this, the method of Sector

discriminatory fee structure i.e. course fee linked to the income level of the
family or the ability to pay is suggested. Those from the lower socio-
economic strata are levied less burden and those from the upper income
groups are made to pay more. The ‘graduate tax’ method levies a tax on the
employers employing educated workforce. The case for the method is made
on the ground that while the employers get the benefit of such educated
persons, they themselves do not pay for their training. The method is
disadvantageous in that it may motivate the employers to go for less educated
workers thereby causing the problem of unemployment among the educated.
However, since only educated workforce can undertake certain type of works
which are knowledge intensive, the substitution effect is expected to be less.
The method of ‘student loans’ targets the beneficiaries directly. While many
committees constituted by the government have favoured this approach, it is
also said to adversely impact equity considerations. For instance, the method
may lead to the promotion of those courses which are having higher
employment market neglecting the courses which may be important from a
societal angle. Another problem with this method is the issue of insufficiently
developed credit markets and the problem of recovery of loans which is
dependent on uncertain future employment markets.
For elementary and secondary level of education, a commonly practised
method is ‘earmarking’. This refers to a levy of a special cess for the
particular purpose. The programme of SSA generated a major part of its
funds by this method. Many countries, both developed and developing, have
successfully adopted this method. Another method which has successfully
been implemented for school level is the ‘direct benefit transfer’ (DBT)
method. A major problem of government schools is of accountability
impinging on quality of education. The method of DBT is said to deal with
this by transferring the power of selecting a school of their choice to the poor
household/parent. It is a voucher system in which a parent can admit a child
to the school which charges fees up to the amount of the voucher. Parents can
choose any type of institution (private, aided or government) where the fee
charged, if higher than the voucher amount, can be supplemented by the
family. With the value of the voucher being set ‘inverse to the family
income’ (i.e. poorer families getting higher valued vouchers), the method is
argued to afford the potential of being an instrument of greater equity. One
criticism of this method is that the method may not work in backward/rural
areas as private schools may not be popular in such areas. However, data
from NSSO for 2014-15 shows that the per month median fee charged by
private unaided elementary schools in rural areas was Rs. 292 while in urban
areas it was Rs. 542. In the light of this, it is argued that even a relatively low
voucher value of Rs. 500 per month would represent significant share of total
expense even in remote rural areas. Another concern about DBT is how to do
away with the present ‘grants-in-aid’ system which is kept equivalent to meet
the requirement of teachers’ salary. The grants method, thus, gives priority to
schools and not to pupils/students. Such a grant does not even take into
account the number of students. It is far from trying to address the attitude of
the teachers towards their accountability. With DBT, it is pointed out that 95
Population and teachers would have to focus more on attracting, retaining and then giving
Human
Development
quality education. Towards implementing DBT, the government is
contemplating ‘school consolidation’ where tiny schools are merged with
bigger schools nearby and redeploying teachers from over-enrolled schools to
under-enrolled schools. Many countries (e.g. Colombia, Chile, Netherlands,
New Zealand, US) have used the DBT method to good effect.
Check Your Progress 2 [answer within the space given in about 50-100
words]
1) What specific policies are needed to improve the sub-standard
performance in education?
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
2) How is GPI defined?
.....................................................................................................................
.....................................................................................................................
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3) In what way, the ratio of female enrolment in schools can be improved?
To what extent, there is improvement in this regard over time?
.....................................................................................................................
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4) What is an indicator available to establish that the school level education
system has declined in quality in recent years?
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5) On what grounds, the public funding of education was defended in the
face of market proponents arguing against it?
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96 .....................................................................................................................
 ..................................................................................................................... Education
Sector
.....................................................................................................................
6) Is education rightly a public good or a merit good? Give reasons for your
answer.
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6.6 LET US SUM UP

There has been a good deal of progress in the quantitative expansion of the
education sector in India. However, the demand for education has also
expanded outpacing the available supply. Owing to this, disparity in
educational attainments has remained both in quantitative and qualitative
fronts. How to use the available resources more efficiently, without
compromising on considerations of equity, has remained a major concern of
our policy planners. Towards rationalising on the resource front, public
funding for school level education and cost sharing for higher level of
education is being considered. To address the ticklish problem of teachers’
accountability at school level, methods like direct benefit transfer, school
consolidation, etc. are being tried.

6.7 SOME USEFUL BOOKS AND REFERENCES

1) Varghese N.V. and G. Mallik, Eds. (2017). India Higher Education
Report 2015, Routledge, 2017.
2) Romer, Paul M. (1990). “Human Capital and Growth: Theory and
Evidence”, Carneige- Rochester Series on Public Policy 32: 251-86.

6.8 ANSWERS OR HINTS TO CHECK YOUR

PROGRESS EXERCISES
Check Your Progress 1
1) It is defined as the body of knowledge possessed by the population and
encompasses knowledge, talents, skills, abilities, experience,
intelligence, training, judgment, etc. Prof. Theodore W. Schultz.
2) By including people's freedoms and opportunities and relating it to
overall human well-being. It is thus a broader concept which considers
human beings as ends in themselves.
3) Universal access, universal enrolment, universal retention, universal
achievement and equity.
4) By 6 times in terms of institutions and 9 times in terms of enrolment
(from 0.2 million 1.3 million and 22 million to 198 million respectively).
97
Population and 5) Under the CSS, it is mandatory for schools in a particular area to take
Human students from low-income families in the neighbourhood.
Development
6) Colleges by 38 times, universities by 28 times and enrolment in
colleges/universities by 86 times.
7) No. Because, rapid expansion has not been accompanied by the long
overdue reforms in the higher, technical and professional educational
sectors.
Check Your Progress 2
1) Incentives for attending schools, streamlining middle/high school
curriculum to job-oriented vocational courses, etc.
2) It is defined as the ‘ratio of GER for males to females’.
3) By focusing on increasing the proportion of female teachers (per 100
male teachers) in schools (sub-section 6.4.2).
4) The ASER report which has reported a decline in the proportion of
children who could qualify from one level of test to another over the
period 2005-2010 (sub-section 6.4.3).
5) The social benefits were considered higher even in higher education
when positive externalities were taken into account. Lower levels of
education, are in any case, considered like public good which would
benefit the entire society.
6) Since the benefits of education reach the entire society, and not only the
ones getting educated, it has the characteristic of a public good.
However, precisely due to this reason, since its non-public funding might
make some to under-consume it, it is more rightly regarded as a ‘merit
good’.

98
UNIT 7 HEALTH AND NUTRITION*
Structure
7.0 Objectives
7.1 Introduction
7.2 Measurement of Health and Nutrition: Concepts
7.2.1 Malnutrition
7.2.2 QALY/DALY

7.3 Health Expenditure

7.3.1 Sources of Health Expenditure

7.4 Public Healthcare System in India

7.4.1 Preventive and Curative Healthcare
7.4.2 Health Financing

7.5 Health Policy in India

7.5.1 National Health Policy

7.6 Let Us Sum Up

7.7 Some Useful Books and References
7.8 Answers or Hints to Check Your Progress Exercises

7.0 OBJECTIVES
After reading this unit, you will be able to:
• define the concepts of health and nutrition;
• explain the status of health and nutrition in terms of major indicators;
• identify the factors contributing to increasing health expenditure;
• describe the structure of Indian Public Health System;
• distinguish between preventive and curative healthcare needs;
• discuss the trends in healthcare financing in India; and
• outline the features of different health policies introduced by the
government in India.

7.1 INTRODUCTION
There is a common saying that ‘Health is Wealth’. From a human
development perspective, good health and nutrition are invaluable in their
contribution to an individual’s physical and cognitive development.
Malnutrition increases the susceptibility to infection and delayed recovery,
making the burden of disease and morbidity very large for the country.
Malnutrition increases the incidence of non-communicable diseases adding to

*
Dr. Smritikan Ghosh, Asstt. Prof., Scottish College, Kolkata.
99
Population and a huge cost of healthcare. However, most of the developing and
Human
Development
underdeveloped countries unfortunately have a chronic problem of ill health
with India being at a very low position in respect of its health and nutritional
ranking. Specifically, in case of children, the situation is more vulnerable as
according to World Bank, 22 percent disease burden of the Indian children is
because of malnutrition.

Conceptually, health refers to ‘freedom from illnesses’. Empirically, it is

measured in terms of illness prevalence rates and functional disability
measures. A person is called healthy when he/she has very low illness
prevalence rate and no functional disability. Nutrition, on the other hand, is a
measure of nourishment. It refers to a process through which the body
absorbs the required amount of nutrients contained in the food that one
consumes. Health status is thus invariably linked to the nutritional status of a
person or community.

7.2 MEASUREMENT OF HEALTH AND

NUTRITION: CONCEPTS
Given the current level of India’s development, its health scenario is also
improving. In terms of infant mortality rate (IMR) and under-five mortality
rates, India has achieved significant improvement. Over the last roughly two
decade period (from 1992-93 to 2015-16), IMR has come down from 86 to
41 and the under-five mortality rate from 119 to 50 (Table 7.1). It is
important for us to know how these major indicators are measured and
calculated.

Infant Mortality is the probability of a newly born child’s death before its
first birthday. Numerically, it is the number of infant deaths per 1000 live
births in a year. Abbreviated as IMR, it is measured as: IMR = (Number of
resident infant deaths/Number of resident live births)*1000. For example, say
in 2016, among the State residents, number of infant death is 1300 and
number of live births in the State is 150000. Then IMR=
(1300/150000)*1000 = 8.7. According to World Health Organisation
(WHO), 75 percent of world’s under-five deaths is within first year of
infant’s life.

Table 7.1: Health Status of India: 1993-2016

NFHS I NFHS II NFHS III NFHS IV

Health Status (1992-93) (1998-99) (2005-06) (2015-16)
Infant Mortality 86.3 73 57 41
Under-five Mortality 118.8 101.4 74 50
Neonatal Mortality 52.7 47.7 NA NA
Post-neonatal Mortality 33.7 25.3 NA NA
Maternal Mortality rate 437 530 NA NA
Crude Death rate 9.7 9.7 NA NA
Source: NFHS I, NFHS II, NFHS III and NFHS IV. NA: Not Available.
100
Under-Five Mortality: This is also known as child mortality. It is the Health and
probability of dying between first and fifth birthday and is measured as ‘the Nutrition

number of deaths per 1000 per year’. Empirically, it is measured as: Child
Mortality Rate (CMR) = (D/N)*1000 where D = deaths between 0-4 years
during the year of calculation and N = number of live births among the new
born during the year of calculation. For computational purposes, the data is to
be drawn from the registration of newborns. According to WHO, world-over
nearly 9 million children die before their 5th birthday. Main causes of this
type of death are pneumonia, diarrhoea and malnutrition.

Neonatal Mortality: This is the probability of dying in the first month or

within the first 28 days of the life of an infant after birth. Thus, Neonatal
Mortality = (number of neonatal deaths/total number of live birth)*1000. As
per UNICEF, the worldwide neonatal mortality has fallen from 36 deaths per
1000 live birth in 1990 to 19 deaths per 1000 live birth in 2015.

Post-neonatal Mortality: This is the difference between infant and neonatal

mortality i.e. it is the number of newborns dying between 28 days and 364
days (in a specific geographical area) divided by the number of resident live
birth in the same area. This value is multiplied by 1000 to indicate the
mortality rate per 1000 live births. Thus, post-neonatal mortality = (Number
of resident post-neonatal deaths/total number of resident live births)*1000.
Maternal Mortality Rate: This refers to the number of women who die as a
result of childbirth and pregnancy related complication per 100,000 live
births. It thus indicates the risk associated with pregnancy. Thus, Maternal
Mortality Rate (MMR) = (maternal deaths during a reference period/total
number of live birth during the reference period)*100,000. According to
UNICEF, between 1990 and 2015, maternal mortality rate has reduced by
about half or 50 percent.

The Indian health scenario with respect to the above indicators is indicated in
Table 7.1. It shows that except maternal mortality rate and crude death rate,
all other rates are falling. Crude death rate (defined as number of deaths per
year per 1000 people) is constant for first two National Family Health Survey
(NFHS) rounds and maternal mortality rate has increased for the same time
period.

7.2.1 Malnutrition
Malnutrition may be over-nutrition or under-nutrition. Under-nutrition is
measured by indicators like under-weight, stunting and wasting. Wasting
represents the failure to receive adequate nutrition in the period immediately
preceding the survey and is a sign of the extent of malnourishment. It may be
the result of inadequate food intake or a recent episode of illness causing loss
of weight and the onset of malnutrition. Persons whose ratio Z-score of
weight-for-height is below –3 SD (i.e. minus three standard deviation from
the median of the reference population) are considered ‘severely
malnourished’ and those below –2 SD as ‘malnourished’. Thus, if there are
10 individuals whose Z-scores as: –4.1 SD, –3.9 SD, –3.1 SD, –2.8 SD, –2.1
SD, –2.0 SD, –1.1 SD, 1.5 SD, 1.9 SD and 2.5 SD respectively then, the first
101
Population and three individuals are severely malnourished, the next three individuals are
Human
Development
malnourished and the last four are nourished. Note that on the negative side,
up to –1 SD, a margin is given for not regarding a person in the malnourished
category. Similarly, the height-for-age is the ratio of ‘height in cms and age
in months’. The Z-score of this ratio is taken as an indicator of ‘linear growth
retardation’ and ‘cumulative growth deficits’. Linked to the extent of
malnourishment, persons whose Z-score of height-for-age is below –2 SD
from the median of the reference population are considered ‘stunted’ for their
age and are labelled ‘malnourished’. Likewise, when this Z-score is less than
–3 SD, the person is called ‘severely stunted’ or ‘chronically malnourished’.
Stunting reflects failure to receive adequate nutrition over a long period. Such
failures are also affected by recurrent and chronic illness. Weight-for-age is a
composite index of height-for-age and weight-for-height which takes into
account both the acute and chronic malnutrition. Persons whose weight-for-
age is below – 2SD from the median of the reference population are classified
as underweight. Sometimes, anaemia level is also taken as an indicator of
under-nutrition. In nutrition literature, adult malnutrition and child
malnutrition are separately distinguished as follows.
Adult malnutrition is measured by ‘body mass index’ (BMI), Aneamia level
and overweight. BMI is measured as ‘weight divided by height-square’ (i.e.
kg/m2 where weight is taken in kgs and height is expressed in meters). The
standard value of BMI is 18.5. Thus, when a person’s BMI is below this
standard value, he/she is called ‘malnourished’. On the other hand, when the
BMI value is more than 25, the individual is called ‘obese’. In case of
anaemic persons, the BMI level is taken as 12 for female and 13 for male. In
India, there is a decreasing trend of underweight women and men over time
(Table 7.2). However, the percentage of overweight women and men has
increased significantly over the last 15 to 20 years. This is very alarming.
Within the same time span, percentage of women and men with anaemia has
not fallen significantly. This is also a major concern. The trend for
underweight children in India is continuously falling (it has declined

Table 7.2: Adult and Child Malnutrition: 1993-2016

Adult Malnutrition NFHS I NFHS II NFHS III NFHS IV

(BMI) (1992-93) (1998-99) (2005-06) (2015-16)
Women's BMI less than
normal (18.5) NA 35.8 35.5 22.9
Men's BMI less than
normal (18.5) NA NA 34.2 20.2
Anaemia level of Female
(age 15-49) (12) NA 51.8 55.3 53
Anaemia level of Male
(age 15-49) (13) NA NA 24.2 22.7
Overweight Women (>25) NA 10.6 12.6 20.7
Overweight Men (>25) NA NA 9.3 18.6
102
 Underweight Children Health and
Nutrition
(%) 53.4 47 42.5 35.7
Wasted Children (%) 7.5 5.5 9.8 21
Stunting Children (%) 52 45.5 48 38.4
Source: NFHS I, NFHS II, NFHS III and NFHS IV. NA – Not Available.

from 52 percent in 1992-93 to 38 percent in 2015-16). However, the

percentage of wasted children, which was declining up to NFHS II, has been
increasing touching an all time high of 21 percent in 2015-16. Percentage of
stunting children was also falling up to NFHS II, but it has increased to 48
percent in NFHS III falling again to 38.4 percent in NFHS IV.

7.2.2 QALY/DALY
Other than the above measures, there are two more popular measures to
assess the health standard of people. These are: Quality Adjusted Life Year
(QALY) and Disability Adjusted Life Year (DALY). QALY is a measure of
disease burden which includes both quality and quantity of life lived. One
QALY means one year of perfect health. DALY measures how many years
are lost due to ill health, disability or early death. Thus, DALY shows health
loss and QALY shows health gain (i.e. QALY is the inverse of DALY).
Thus, in practice, the difference between a DALY and a QALY depends on
whether the quality of life is expressed as a loss (DALY) or a gain (QALY).
Additional differences are taken into account by the way in which disease
weights are assigned.

Check Your Progress 1 [answer within the space given in about 50-100
words]

1) How are Health and Nutrition defined?

.....................................................................................................................

.....................................................................................................................

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2) State the five major health indicators? Which of these has fallen
internationally by about 50 percent over the period 1990 and 2015?

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103
Population and 3) What are the three sub-components of under-nutrition? How are they
Human
Development
measured?

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4) How is ‘adult malnutrition’ measured? What is a notable trend in this
respect for India?

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5) What has been the trend in respect of underweight children in India?

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6) Distinguish between the concepts of QALY and DALY.

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104
7.3 HEALTH EXPENDITURE Health and
Nutrition

Over past century, worldwide, expenditure on healthcare has risen

consistently. The share of GDP devoted to medical spending in the OECD
countries has increased from 5.1 percent in 1979 to 8.9 percent in 2006. The
corresponding figures on public healthcare expenditure in India has increased
marginally from 1.1 percent of GDP in 1995 to 1.4 percent of GDP in 2014.
The percentage of GDP, particularly public health expenditure, devoted to
healthcare poses public financing challenges for all the countries. The factors
responsible for this may be broadly clubbed under the following two heads
viz. demand factors and supply factors.

Demand factors:
a) Population Ageing: With increase in average age of the population,
demand for medical care is also increasing.

b) Income: It is generally agreed that there is a strong positive relationship

between per capita GDP growth and health spending. However, the
income elasticity of demand for healthcare spending may vary
depending on factors like geographical location, time frame etc.
c) Spread of Insurance Market: The growing health insurance market is
also increasing the demand for healthcare expenditure as insurance is an
important instrument for covering the risk of rising healthcare cost.

Supply factors:
a) Supplier-Induced Demand: Sometimes health service suppliers create
demand for healthcare facilities to increase their market share. This is
called supplier induced demand. This is done by adoption of new
medical technology, providing medicines and treatments not absolutely
related to patient’s condition, etc.
b) General Economic Growth: Economic growth of the country is
improving the living standard of the population which has also
increased the availability of improved medical technology. This induces
demand for healthcare expenditure.

7.3.1 Sources of Health Expenditure

Two broad channels for expenditures on healthcare are: (i) the State through
public expenditure (i.e. public health expenditure: PHE); and (ii) the
individuals/families through their personal expenditure [called out-of-pocket
expenditure (OPE)]. Public expenditure consists of all government
expenditure on health and family welfare. It includes expenses on medical
education, research, hospitals, public health centres and different types of
subsidies given by the government [e.g. huge network of primary health
centers (PHCs) across the length and breadth of the country, government
schemes like ESI/CGHS, medical reimbursements, etc.]. Health expenditure,
in general, is increasing because of: (i) increased life expectancy; (ii)
demographic change with the share of aged population on the rise; and (iii)
increase in chronic diseases. While the per-capita public health expenditure in 105
Population and India has increased nearly five times over the period 1995-2014, as noted
Human
Development
above, as a percentage of GDP it has only marginally increased from 1.1 to
1.4 percent over the period 1995-2014 (Table 7.3). Out-of-pocket expenditure
(OPE), on the other hand (which by definition refers to cost sharing and other
expenditures incurred by the patients and their families themselves), is very
high. As per WHO estimates, the total OPE on healthcare in India has
increased from 76 percent in 2005 to close to 90 percent in 2012. In fact, a
similar trend in OPE is witnessed in many countries over this period (Table
7.4).

Table 7.3: Profiles of Health Expenditure in India – 1995-2014

India Per Capita Public Health Public Health Public Health

Health Expenditure Expenditure Expenditure
Expenditure (as % of as a % of as a % of
(US $) GDP) Total Govt. Total Health
Expenditure Expenditure

1995 16 1.1 4.3 26.2

2014 75 1.4 4.4 30
Source: WHO

Table 7.4: Share of Out of Pocket Expenditure (OPE) to Total Health

Expenditure (THE)

Country Share of OPE Share of OPE

to THE (2005) to THE (2012)
India 76.1 89.2
Pakistan 80.9 86.8
Bangladesh 62.6 92.9
Nepal 62.6 79.9
Source: WHO

7.4 PUBLIC HEALTHCARE SYSTEM IN INDIA

Public Health is a process of preventing disease, prolonging life and
promoting human health through organised efforts and informed choices of
society. Healthcare covers not only medical care but also many aspects of
preventive care. Indian healthcare system is regressive as private out-of-
pocket expenditure dominates the cost of financing healthcare. An ideal
healthcare system should be accessible to all with a fair distribution of
financial cost and competent service providers.

Healthcare spending can be divided into public and private spending. Despite
several growth-orientated policies adopted by the government,
economic/regional/and-gender disparities have remained posing challenges
for health sector in India. For instance, nearly 75 percent of health
106 infrastructure, medical manpower, and other health resources are
concentrated in urban areas where only 27 percent of the population live. To Health and
reduce this disparity, public health has to focus on health promotion and Nutrition

disease prevention and control by taking into account the social determinants
of health. The focus of public health should be on bringing about changes not
only for preventing disease but also for promotion of health through
organised action at societal level.
India is the second most populous country of the world with a widely varied
socio-political-demographic and morbidity pattern. Most of the States in
India face severe healthy workforce shortage. A large number of health
service providers, managers and support workers are needed to fill this gap.
Many States are unable to provide even basic, minimum lifesaving services
in a consistent manner. The challenges of public healthcare system in India
may, therefore, be summarised as: (i) inadequate resource availability for
public healthcare; (ii) severe geographical and social disparity; (iii)
inadequate integration between health programmes; (iv) lack of community
focus; (v) fragmented functional responsibility; (vi) inadequate attention to
primary healthcare; (vii) inadequate public health orientation; etc.

7.4.1 Preventive and Curative Healthcare

Preventive healthcare refers to measures taken for disease prevention as
opposed to disease treatment. It encompasses a variety of interventions
undertaken to prevent or delay the occurrence of disease or reduce further
transmission or exposure to disease. Several measures instituted for this
include: (i) alcohol misuse counselling; (ii) blood pressure screening; (iii)
cholesterol screening; (iv) depression screening; (v) diabetes and diet
counselling; (vi) hepatitis B and C screening; (vii) syphilis screening; (viii)
anaemia screening; (ix) campaigning on importance of breast feeding; (x)
folic acid supplements; (xi) urinary tract infection screening; (xii) autism
screening (18-24 months); (xiii) immunisation/ vaccination; (xiv) iron
supplements; (xv) vision screening; etc.
Curative Healthcare refers to hospitalisation for helping the patients treated
for a disease. Currently in India, there are over 5 lakh trained doctors, 7 lakh
‘auxiliary nurse midwives’ (ANMs), 22,975 PHCs and 2,935 child healthcare
centres (CHCs). There are also 22,000 dispensaries and 2,800 hospitals. In
spite of this, gaps in facilities, supply and staff exist. Budget is the main
problem of different state-run units. Under-funding of the recurring cost is
another problem. Private hospitals are provided concessional land with liberal
tax structure with conditions for meeting some social obligation. However,
there is no proper monitoring to ascertain whether they are fulfilling these
obligations. There is also no proper quality control on the large number of
small nursing homes run by private doctors and doctors-agencies.

7.4.2 Health Financing

There is a view that healthcare expenditures are largely imposed on
individuals, rather than freely chosen. A more demanding requirement is that
the financing should be according to ‘ability to pay’. A financing structure is
called progressive if healthcare expenditure takes a larger proportion of
107
Population and income from the rich than from the poor. If the absolute level of healthcare
Human
Development
expenditure is about the same for the poor and rich, then by design this
expenditure will take up a larger fraction of income from poorer households.
Different studies show that user charges have a strong regressive component
in the healthcare financing structure of developing countries.

Health financing is divided in two parts – public financing and private or

individual financing. The main challenges faced by the government in
deciding on: (i) how much to invest and where; and (ii) how to healthily
balance its health investment paying due regard to concerns of equity and
efficiency are: (a) increasing public health expenditure [due to which the
government, in addition to making increased budgetary allocations,
sometimes partners with private sector (e.g. pulse polio immunisation) for
delivery of services]; (b) more efficient and effective use of the available
scarce resources; and (c) provide financial protection from the rising
healthcare cost to the poor.

Of the above, the first i.e. objective of public healthcare expenditure was
discussed briefly in Section 7.3. Regarding the second objective on efficient
use of the budget, government has recently rearranged its infrastructure
totally under the National Rural Health Mission (NRHM). Next comes the
objective related to providing financial assistance in meeting the rising
healthcare cost to the poor and the needy. This objective is at least, in part,
related to the institutional mechanisms of establishing a healthy health
insurance market in which the regulatory role of the government plays an
important part.

In the last two decades, Central and State governments have been providing
insurance premium for meeting the health costs of the underprivileged
sections of the society. Even with all these efforts, the current distribution of
main sources of health insurance premium is as follows: households (49.5
percent), government (27 percent) and others (employers) (23.5 percent).
Such health insurance coverage is mostly for in-patient care i.e. patients who
are admitted in the hospital. Comprehensive health insurance (i.e. covering
the out/in-patient, preventive, primary and post-hospitalisation care) is
offered by only select social health insurance schemes of the government like
ESI, CGHS, etc. which caters only to a small section of total population. Few
private insurance companies are providing the pre and post hospitalisation
follow-up service which only some of the more affluent section of the society
are able to avail. The goal of universal health coverage, therefore, continues
to remain a distant challenge for India’s policy makers and government.

Check Your Progress 2 [answer within the space given in about 50-100
words]

1) As a percentage of GDP, how does Indian public healthcare expenditure

compares with those of OECD countries over the recent time period?

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 ..................................................................................................................... Health and
Nutrition
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2) Which three factors from the ‘Demand Side’ influences the
government’s decision to spend more on healthcare? Why?
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3) What factors contribute to influencing higher healthcare expenditure for

the public from the ‘supply side’?

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4) What are the two major sources of ‘health expenditure’? Which of these
dominates in Asian Countries? What is its current level in India?

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5) Do you consider the Indian healthcare system regressive? Why?

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109
Population and 6) What are the major challenges faced by the public healthcare system in
Human
Development
India?

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7.5 HEALTH POLICY IN INDIA

When one considers the health and related policies in India, we find that we
have well-formulated policy guidelines in terms of National Policies for
Health, Nutrition, Education, Children, etc. These policies provide an overall
framework for health and development reflecting political commitment. The
Constitution of the country, [the directive principles] and the national policies
provide the broad guidelines for mobilisation and distribution of resources in
such a way as to meet the health needs of the masses. The constitutional
amendments from time to time and their ratification by the State assemblies
also provide the guidelines to planners and administrators to direct the
resources to the priority areas. Over the years, the country has expanded its
healthcare delivery system and has, by and large, adequate availability of
health manpower, except for a few categories and specialised training
facilities.

A National Health Mission was launched with specific goals to be attained

during the period 2012-17. Main objectives of this mission are to: (i)
safeguard the health of the poor; (ii) strengthen the public health system; (iii)
empower the community for achieving the maximum health standards; and
(iv) improve the efficiency to optimise the use of available resources. Under
this mission, many schemes have been launched. Some of these are:

a) Rashtriya Bal Swasthya Karyakram: This is an initiative to cover

early detection and intervention among children (i.e. from birth to 18
years age) with respect to four D’s i.e. defects at birth, diseases,
deficiency and developmental delays.

b) Janani Shishu Suraksha Karyakram: This is for pregnant women

and newborn sick. Through this scheme, diagnosis, treatment, diet, and
most of the drugs are provided free of cost. Transport from home to the
treatment centre is also provided free of cost. The C-section is also
performed free of cost for pregnant women.

c) Reproductive, Maternal, Newborn, Child and Adolescent Health:

This scheme, introduced in 2013, has the main objectives of reducing
the: (i) infant mortality rate to 25 per 1000 live birth; (ii) maternal
mortality rate to 100 per 100000 live births; and (iii) total fertility rate
(TFR) to 2.1 by the year 2017.
110
d) Rashtriya Kishor Swasthya Karyakram: Established in 2014, the Health and
scheme aims to reach 253 million adolescents in the country by Nutrition

intervening through the routes of nutrition, mental health and other

health promotional approaches.

e) India Newborn Action Plan: This was also established in 2014 with
the main objectives of developing the health of newborn and reduces
cases of stillbirth.

7.5.1 National Health Policy

The National Health Policy (2002) recognised that morbidity and mortality
levels of the country are exceptionally high and hence stronger preventive
and curative measures are needed. It took special note of the fact that macro
and micro nutrient deficiency among women and children are high. Major
diseases like Malaria, TB and HIV have also received special attention here.
Given this scenario, the main features of the policy thrust are:
1) More flexibility to state public health administrations to implement
policies in their areas;

2) Vertical implementation structure for disease control programmes;

3) More training to paramedical staff to cater to backward regions of the

country;

4) Rectifying the uneven distribution of medical colleges across country;

5) Certain medical disciplines like molecular biology etc. to get developed

infrastructure;
6) Increasing the number of persons specialised in family medicine and
public health;

7) Encourage the usage of generic drugs and vaccine;

8) Include mental health in the public health domain;

9) Since college and school children are the most impressionable target for
inculcating the basic principles of preventive healthcare, the policy
suggests targeting these youth for increasing the awareness of health
promoting behaviour; and

10) Encourage health related research among non-government service

providers.
The National Mental Health Policy (2014) aims at: (i) providing universal
access to mental healthcare; (ii) increasing access to mental health service to
the vulnerable section of the country; (iii) reducing the risk and stigma of
mental disease; (iv) ensuring the supply of skilled resources to treat the cases
of mental sickness; and (v) identifying the social, biological and
psychological determinants of mental health disorder. The more recent
National Health Policy, 2017 also reiterates the goal of attaining the highest
possible level of health and well-being by ensuring universal access to good
quality healthcare services (without financial hardship) linked to the 111
Population and Sustainable Developmental Goals. To achieve universal health coverage,
Human
Development
specific steps identified under this are: (i) establishment of a comprehensive
and free primary healthcare service for maternal, child and adolescent health
through public hospitals and not-for profit private care providers; and (ii)
provide a good quality secondary and tertiary healthcare service. The policy
particularly emphasises the need for reducing the out-of-pocket expenditure
on healthcare needs. The other major objectives of this policy are to: (i)
increase the life expectancy at birth from 67.5 to 70 by 2025; (ii) reduce the
under-five mortality to 23 by 2025 and maternal mortality to 100 by 2020;
(iii) reduce the infant mortality rate to 28 by 2019; (iv) reduce neo-natal
mortality to 16 and still birth rate to single digit by 2025; (v) eliminate
leprosy by 2018; (vi) fully immunise 90 percent newborn by 2025; (vii)
ensure adequate availability of paramedics and health workers for primary
and secondary healthcare in high priority Districts by 2025; (viii) ensure
District level electronic database of information on health system by 2020;
etc.
The 2017 policy thus aims to project an incremental assurance based
approach. However, the policy gives cause for two types of criticisms viz. (i)
agency stakeholder critique; and (ii) feasibility critique. On the first, while
the policy identifies what needs to be done, it does not identify the ‘who,
what and the how’ sides of its implementation. This is perhaps due to the
reason that healthcare is a State subject but it is important to improve the
monitoring of the delivery systems. On the second, i.e. the feasibility critique,
the policy calls for a reform in financing the public healthcare facilities where
the operational costs would be in the form of reimbursements for care
provision on a per capita basis for primary care. But the policy is silent on
how these financing reforms will happen and who will manage them. Thus,
while the policy more lucidly identifies the need to address problems with
respect to three As (Access, Affordability, Accountability) of healthcare
system of India, it fails to provide a cohesive, tangible action plan to address
the problems pertaining to any of the As – especially when the public
healthcare system is sinking under micro and macro managerial inefficiencies
and is low on training and capacity building efforts.

Check Your Progress 3 [answer within the space given in about 50-100
words]

1) State the four specific goals of the National Health Mission: 2012-17.

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112
2) What are the two specific steps identified to achieve ‘universal health Health and
coverage’ under the National Health Policy, 2017? Nutrition

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3) State the five major aims of the National Mental Health Policy, 2014.

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4) On what fronts, is the National Health Policy, 2017, is critiqued?

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7.6 LET US SUM UP

For a developing country like India, improving the nutrition and the general
health status of its population is a critical concern of the government. Even
though there is a gradual improvement over time in many of the major health
indicators for India, the improvement is at a very slow rate. In particular,
under-five mortality rate is still 50 percent. In case of nutrition status, cases
of stunting and wasting are increasing which is alarming. To improve the
situation, the Indian Government has initiated several policies and
programmes. However, its overall public expenditure on health, which is less
than 1.5 percent of GDP is very low. Consequently, the average share of out-
of-pocket expenditure to total expenditure is not only very high (90 percent in
2012) but has continuously maintained an increasing trend. Further, most of
the public healthcare infrastructure is concentrated in urban areas. Lack of
adequate supply of health workforce is also an area of concern. Health
insurance is getting importance in the society as well as in the government
circles. Government is improving the situation through different policies and
by providing improved preventive and curative healthcare services. Among
different policies some of the important ones are: National Health Mission,
National Mental Health Policy of India (2014), National Health Policy (2002,
2017), etc.

113
Population and
Human
7.7 SOME USEFUL BOOKS AND REFERENCES
Development
1) Neun and Santerre: Health Economics: Theories, Insights and Industry
Study.

2) Ministry of health and family welfare, Government of India: National

Family Health Survey (I,II,III and IV).

3) Government of India: RBI Bulletin.

4) Ministry of health and family welfare, Government of India: National

Health Policy.

7.8 ANSWERS OR HINTS TO CHECK YOUR

PROGRESS EXERCISES
Check Your Progress 1
1) Health refers to ‘freedom from illnesses’. Nutrition refers to a process
through which the body absorbs the required amount of nutrients
contained in the food that one consumes. It is thus a measure of
nourishment.

2) IMR, Under-5 mortality, neo-natal mortality, post-neonatal mortality

and MMR. MMR has fallen by about 50 percent between 1990 and
2015.

3) Under-weight, stunting and wasting are the 3 sub-components of under-

nutrition. They are measured in terms of deviation from Z scores (Sub-
section 7.2.1).

4) By BMI, anaemia level and overweight. There is a decreasing trend of

underweight women and men over time.

5) The trend for underweight children in India is continuously falling (it

has declined from 52 percent in 1992-93 to 38 percent in 2015-16).
6) QALY is a measure of disease burden whereas DALY shows health
loss. Taken as an inverse of each other, QALY measures health gain.

Check Your Progress 2

1) For OECD countries, over 1979-2006, it has increased from 5.1 percent
of GDP to 8.9 percent. In India, over 1995-2014, it has increased from
1.1 percent to 1.4 percent of GDP.

2) Population ageing, income and spread of insurance market.

3) Supplier Induced Demand and general economic growth.

4) PHE and OPE. For Asian countries, OPE is more than 80 percent. For
India, it is estimated as 89.2 percent in 2012.

114
5) Yes because of high private out-of-pocket expenditure. An ideal Health and
healthcare system should be accessible to all with a fair distribution of Nutrition

financial cost between the public and the private healthcare spending.

6) Inadequate resource availability for public healthcare, severe

geographical and social disparity, inadequate integration between health
programmes, lack of community focus, etc.

Check Your Progress 3

1) Safeguard the health of the poor, strengthen the public health system,
empower the community for achieving the maximum health standards
and improve the efficiency to optimise the use of available resources.

2) Establishment of a comprehensive and free primary healthcare service

for maternal, child and adolescent health through public hospitals and
good quality secondary and tertiary healthcare service.

3) Providing universal access to mental healthcare, increasing access to

mental health service to the vulnerable section of the country, etc. (Sub-
section 7.5.1).

4) On two ground viz. agency stakeholder critique and feasibility critique

(Sub-section 7.5.1).

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Population and
Human
Development

116