Higher social spending in Indian states is not enough to boost standards of living, says a study
- The State Bank of India released its Subnational
Human Development Index(SHDI) today.
- The list was topped by Kerala, Goa, Himachal Pradesh, Haryana, Punjab and Tamil Nadu.
- The report offered an interesting assessment on the effect or lack thereof of higher
social spending: it doesn’t necessarily translate into higher standard of living.
The list was topped by Kerala, Goa, Himachal Pradesh, Haryana, Punjab and Tamil Nadu.
While some findings weren’t very surprising - South Indian states consistently do better than their Northern counterparts while Northeastern states score poorly - the report offered an interesting assessment on the effect or lack thereof of higher social spending: it doesn’t necessarily translate into higher standard of living.
In order to determine whether higher social expenditure resulted in a higher human development index (HDI) ranking, the report’s authors compared the compounded annual growth rate (CAGR) of social spending with the improvement in HDI scores for a 27 year period starting in 1990.
The report showed that there was a low correlation between the two, indicating that a number of impediments such as red tapism, institutional bottlenecks, implementation inefficiencies and a lack of awareness prevent an increase in social spending from being fully effective.
The conclusion will be a sobering one for India’s political parties, most of which promise significant handouts and higher social spending ahead of
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