US-India Global Review

68 US-INDIA GLOBAL REVIEW JANUARY-MARCH 2018 state governments have brought in new price controls. So India remains a difficult country in which to do business. Lousy government services lead to lousy social indicators. The quality of the delivery of gov- ernment services remains poor. The big improvements in private- sector competitiveness are not even remotely replicated in gov- ernment service competitiveness. India’s social indicators remain dismal. It has slipped even com- pared with the other five countries of South Asia (Bangladesh, Bhutan, Nepal, Pakistan, and Sri Lanka — see Table 7.) Yet India has the fastest economic growth in South Asia. Back in 1990, only one of its neighbors, Sri Lanka, had better social indicators, but now India looks to be second worst, ahead of only trouble-torn Pakistan. Indian social indicators have improved faster in the past 25 years of liberalization than in the earlier socialist era, but the improvement is clearly insufficient. Government services of all sorts remain basically unreformed and are delivered by a callous, unsack- able bureaucracy. Prime Minister Modi shows no sign of taking on this bureaucracy. Chief ministers who have tried to take on the trade unions of the civil service have typically been forced to retreat. Surveys have shown that half of government schools have no teaching activity at all: teacher absenteeism is chronic, which induces high pupil absenteeism.42 Teachers in government schools are highly paid even by interna- tional standards, yet they neglect their duties with impunity. As Table 8 shows, the ratio of teacher salaries to GDP is an average of 3.0 in nine major states, against just 1.2 in the Organisation for Economic Co-operation and Development, 0.9 in China, 1.5 in Japan, and 1.0 in Bangladesh and Pakistan. Many teachers are deep into politics, and many become legisla- tors. Teachers staff polling booths during elections, which is one rea- son no party wants to crack down on teachers: they may retaliate by collaborating with rivals in stuffing ballots. Yet these same teachers often do not teach at all: desper- ate poor families are pulling their children out of free but useless government schools and putting them in private schools, which are somewhat better. One study of 74 countries (the Program for International Student Assessment PISA Plus survey of 2009) placed India last, even though India in this case was represented by its two best states. The government’s reaction was to stop participating in future surveys.43 In 2015 India’s Annual Status of Education Report said that only 48.1 percent of children in their fifth school year could read a text appropriate for their second school year. Arithmetic remains a challenge. Only 44.1 percent of Class 8 students in rural India managed to solve a division prob- lem in 2014, compared with 46 percent in 2013. India’s public spending on health, which elsewhere common- ly provides health care access to the poor, has always been among the lowest in the world. India has world-class hospitals for the elite, but the masses are at the mercy of quacks and dubious practition- ers of traditional indigenous medi- cine. Table 9 shows how far India lags behind other regions in public health spending. Given this low rate of public spending, the quality of public health is poor, and health indica- tors in India are typically worse than in neighboring countries of South Asia. India has some of the worst nutritional indicators in the world. Anemia affects over 80 per- cent of the population in several states, including many in the rich- est one-third. Child malnutrition, measured by low weight for age, affects 46.7 percent of all Indian children, worse than in most African countries. A family health survey suggests that virtually no improvement in child malnutrition occurred between 1998-99 and 2005-6, despite rapid GDP growth. However, data from the National Nutritional Monitoring Board show some improvement. By global standards, Indian children suffer from stunting, low weight, and wasting. The puzzle is that malnu- trition and anemia affect high- income groups too. Calorie intake is falling despite rising income — poor people want to switch to superior, tasty foods rather than get more nutrients out of basic foods. One reason for the meas- ured malnutrition is that open defecation spreads diseases that inhibit the absorption of food nutri- ents. Better sanitation is vital and is a public health issue. Nutrition is a bigger problem than hunger, so nutritional education and fortifica- tion of food with vitamins, iron, and iodine should be on the agen- da.44 Subsidies, freebies, and waste are still a problem. Formal subsi- dies as defined by the central gov- ernment have fallen from 2.5 per- cent of GDP to 1.6 percent. But that definition excludes a variety of goods and services provided below cost, and which are often free. The National Institute of Public Finance and Policy has estimated subsidies, broadly

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