[Editorial Analysis] Governing India’s many spaces

Mains Paper 2: Polity

Prelims level: EDB

Mains level: EDB and its performance in India


• These are the indices of the ‘Ease of Doing Business’ (EDB), ‘Human Development’ (HDI) and ‘Environmental Performance’ (EPI). They are self explanatory, and their importance unlikely to be contested, even though they may not exhaust all concerns.

• Published by separate international bodies, they are used to rank the world’s countries according to their performance in the related sphere.

• Rankings by themselves do not reveal the level of attainment but they do convey how far a country is from the global frontier.

The business ecosystem

• The EDB, an indicator put out by the World Bank, is meant mainly as an index of the effect of government regulations on running a business.

• It is also meant to reflect the extent of property rights in a society. Responses are sought from government officials, lawyers, business consultants, accountants and other professionals involved in providing advice on legal and regulatory compliance.

• A country’s ranking is based on the extent to which government regulations facilitate the following: starting a business, obtaining construction permits, getting an electricity connection, registering property, accessing credit, protection of investors, paying taxes, trading across borders, enforcement of contracts and resolving insolvency.

• The Narendra Modi government has set much at store by India’s improved ranking in terms of the EDB index. Actually, the improvement is considerable.

• From a rank of 134 in 2014, India’s rank improved to 77 in 2018.

HDI measurement process

• The HDI is a combination of indicators of income, health and education in a country. Its conceptual basis has been critiqued.

• First, it has been pointed out that the index combines incommensurate categories, as income, health and education are not substitutes.

• Second, while it does go beyond purely economic measures of progress, in that it looks at the health and education achievements in a population, it can say little about the ‘quality’ of development.

• The HDI has now gained reasonable acceptance globally as indicative of the development strides a country has taken.

• When we turn to the HDI, we find that India’s ranking has not altered since 2014.

• India was ranked 130 in 2014, and has remained in the same place out of 185 countries in 2018.

• It is of relevance here that India’s HDI ranking has not improved despite it being the world’s fastest growing major economy in recent years, as the government often points out in its assessments.

• This despite income being a component of the index. What this reveals is that an economy can grow fast without much progress in human development.

• Also, India’s HDI position in the bottom third of countries points to how much it needs to progress to earn the label ‘the world’s largest democracy’.

Environmental costs

• The Environmental Performance Index is produced jointly by Yale and Columbia Universities in collaboration with the World Economic Forum.

• The index ranks countries on 24 performance indicators across several ‘issue categories’, each of which fit under one of two overarching objectives, namely, environmental health and eco-system vitality.

• The issue categories are air quality, water and sanitation, water resources, agriculture, forests, fisheries, biodiversity and habitat, and climate and energy.

• These metrics are meant to serve as a gauge at a national level of how close countries are to accepted environmental policy goals.

• In 2018 India ranked 177 out of 180 countries, having slipped from an already very low rank of 155 in 2014.

• The country is today among the worst performing on the environmental front and its ranking has worsened over the past five years.

Way forward

• However, at a time when it has been the fastest growing economy in the world, India’s rank on human development has remained unchanged and on environmental performance has slipped close to the last place.

• These outcomes would not surprise anyone familiar with public policy since 2014.

• The Narendra Modi government has marginally lowered health and education expenditure as a share of national income and distinctly lowered environmental standards.

• An instance of the latter would be the Coastal Regulation Zone Notification of 2018 which allows construction and tourism development
on land earlier considered inviolable due to its ecological value.

• This de-regulation is a setback for India.

• It is only one instance of the failure to recognise the plunder of India’s natural capital taking place at an accelerated pace.

• Political parties now fervently making a pitch to govern India must indicate how they will reverse it. Ill fares the land where wealth accumulates and nature frays.


Prelims Questions:

Q.1) Consider the following statements related to Global Cooling Prize:

1. This prize has been instituted to promote research in the Arctic region to understand the impact of Climate Change on the glaciers

2. This prize has been instituted by Rocky Mountain Institute (RMI).
Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Ans: B

Mains Questions:

Q.1) What do you mean by HDI index? What is the current position of India as per the index? How India can improve?

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