India Is Getting Richer. Life Must Get Better Too

Source: The Hindu

Subject: Indian Economy / Governance / Human Development

Why in News?

India’s economic growth must translate into better public services, including quality education, affordable healthcare, clean air and reliable urban infrastructure. The article argues that state capacity, rather than income growth alone, is critical to improving citizens’ quality of life.

Key Issues and Facts

• Education: ASER 2024 found that only 48.8% of rural Class 5 children could read a Class 2-level text, highlighting the gap between school enrolment and actual learning.
• Healthcare: Out-of-pocket expenditure accounted for 43.4% of India’s total health expenditure, increasing the financial burden on households.
• Air pollution: India’s average PM2.5 concentration was reported at 50.6 µg/m³, compared with the WHO annual guideline of 5 µg/m³.
• Low tax capacity: Combined gross tax revenue of the Centre and states was around 18% of GDP in 2023–24, limiting the resources available for public services.
• Weak municipal finances: Municipal revenues remain below 1% of GDP, constraining expenditure on water supply, sanitation, roads and waste management.
• Judicial pendency: Approximately 5.6 crore cases were pending across Indian courts, delaying dispute resolution and weakening the enforcement of rights.

Five Reforms to Improve State Capacity

1. Improve tax compliance: Use third-party data, invoice matching and better tax administration to widen the revenue base without depending excessively on higher tax rates.
2. Strengthen municipal finances: Improve property-tax collection, provide predictable fiscal transfers and empower urban local bodies to deliver essential services.
3. Improve public-sector performance: Address staffing shortages, strengthen accountability and link promotions with measurable performance.
4. Measure and publish outcomes: Make school performance data publicly accessible so parents and administrators can identify learning gaps and improve accountability.
5. Strengthen property rights and courts: Modernise land records, improve cadastral maps and speed up judicial processes to facilitate investment, credit access and urban development.

Significance

• Human capital: Better education and healthcare improve productivity and support long-term economic growth.
• Inclusive development: Reliable public services ensure that the benefits of growth reach ordinary citizens rather than remaining concentrated among higher-income groups.
• Ease of doing business: Faster courts and secure property rights reduce uncertainty and encourage investment.
• Urban governance: Greater municipal capacity is essential for addressing pollution, congestion, sanitation and inadequate public transport.

Conclusion

India’s transition to a developed economy requires more than higher GDP and per capita income. It requires a capable, adequately funded and accountable state that converts economic growth into measurable improvements in everyday life.