1980s is often cited as that breaking point when India made a transition from an economic laggard to one of the fastest growing nations of the world. GDP numbers are often cited as the evidence of this turn-around in our growth story. The logic is simple, and linear. Any increase in our GDP and per capita income is supposed to imply an increase in our living standards, since money is often believed to be the (only?) constraint to getting ‘good things’ in life. Capability theory discredits this argument convincingly. The very question of growth, thus translates to whether or not the increase in income translated to an increase in the living standards of people. Money income is the *means* to achieve better education, get better health facilities, apart from necessary commodities like food and shelter; it is not the end in itself. It doesn’t equate to human development.
This rings true especially in the Indian experience. Even though the growth rate of our per capita income rose from 1.7% in 1950-1980 period to an average of 4% thereafter, the core human development parameters continued to be dismal . This is reflected by the fact that India’s relative rank in human development among 177 countries has risen by only two positions from 128 in 1999 to 126 in 2004. Education, health and security continued to be flaky at best, even after the liberalization (In fact, sloppy liberalization is argued to be the reason for under-performing HDI index).
A staggering 48% of children below the age of 5 were chronically malnourished in 2005-2006, according to the NHFS-3, a data that did not show much improvement even in the 2012 report on the children by MSPI. Diseases such as dengue, hepatitis, tuberculosis, malaria and pneumonia continue to plague the country because of increasing drug resistance of the foreign-disease-causing-bodies.. A revoltingly high proportion of anemic pregnant women, of low birth-weight babies, of poor sanitation; and high inequalities in these very numbers among various Indian states- all point at the overwhelming work that still has to be done in the health sector of the nation.
Focusing on education, just over half (55 percent) of women age 15-49 are literate (A term which, in Indian context, shows a definite upward bias in calculating the people who have the ability to legitimately read and write), compared with 78 percent of men in the same age group. The primary education in India leaves much to be desired, with poor infrastructure, poor quality of teachers, and downright ill- targeted programmes like refusal to fail anyone upto 8th standard, coupled with rampant corruption or the Indian practice of jugaad.
Security, has always been a problem. Communal riots, terrorist attacks… even 63 years after independence, India has not been able to address this basic gap in the defense structure. Focusing on the time period after 1980s, the anti-Sikh riots in 1984 (that extended afterwards), the 2008 wave of attacks against Christians, the 9/11 terrorist attacks, all highlight the basic security lapse and/or unwillingness on the part of the government to address this crucial issue.
The causes of these dismal numbers have been widely documented. Inefficiency (because of lack of productive investment), and lack of market complementary intervention by the government are two main reasons for this lack of human development. Many of these problems can be explained if we look at the haphazard manner in which deregulation and privatization were pursued in the 1980s. (A working of an ideal market requires institutional foundations, which were severely lacking in 1980s. )
As Amartya Sen emphasizes, while the case of economic reforms of 1980s and 1991 correctly diagnosed too much governance in some sectors of the economy, it ignored the fact that India had too less governance in other fields like education, healthcare, social security, and land reforms. In fact, because the social benefits of investments in these fields highly outweigh the private benefits (profits), these sectors would always have under investment in pure market, and there is a *need* for adequate government intervention. This need for market complementary intervention by the government has hardly been fulfilled. The government investment in healthcare, for example, was a mere 2.5% of the GDP in 2012 (which although was an increase from the 1% of GDP in 2011, still pointed out the lack of required investment, especially since the country is looking at FDI to fund the deficit). This inertia of government activity contributes to the persistence of widespread deprivation, economic stagnation and social inequity.
A problem with small government role in essential sectors such as that of education and healthcare is that it leads to inequality. Poor government services leads to increasing pressure on the private entities to fill the gap; and they don’t have any social obligations. This leads to provision of improved services (healthcare and primary schools, for example), but at a higher cost- effectively weeding out the ‘poorest of the poor sections’. Because of a wide disparity in the quality of services, availing government services has a negative concoctation, which further leads to a regressive attitude of both the government workers, and the availers of the services. This leads to a vicious cycle of poor quality of services, and an increasing preference for private services, even at a higher cost. The exact problem is what plagues the Indian education and health sectors, and even in security- to an extent, as long as we focus on productive investment as opposed to actual investment.
Sources linked: National Family Health Survey-3, (2005-06) http://www.measuredhs.com/pubs/pdf/FRIND3/FRIND3-Vol1AndVol2.pdf
 Children in India 2012, a Ministry of statistics and programme implementation report.
 WHO report on TB cases in India and the funding of the TB control programmes, (which incidently has reduced in 2013 even as the number of reported patients show a rapid rise) http://apps.who.int/nutrition/landscape/report.aspx?iso=ind
WHO, Interactive world map on Dengue prevalence. http://www.healthmap.org/dengue/index.php
“…In 2008, the proportion of children in Std 3 who could read a Std 1 text was under 50%, which has dipped about 16 percentage points to nearly 30%. A child in Std 3 has to learn to do two digit subtraction, but the proportion of children in government schools who can even recognise numbers up to 100 correctly has dropped from 70% to near 50% over the last four years with the real downward turn distinctly visible after 2010, the year RTE came into force… ” http://qrius.com/failing-to-fail/  The hurdles of FDI in healthcare in India http://indianresearchjournals.com/pdf/APJMMR/2012/October/5.pdf  UNDP, 2006