Group 6, Section B Neeraj Saini Nrisingha Ganguly PGP27094 PGP27096

Rachit Sharma Revanth P PGP27102 PGP27111

Sairam K PGP27113

Sunil Kumar PGP27125

Social Aspects of Economic Development in India An Analysis

Context and Motivation
A countrys economic growth only reflects a small aspect of the welfare of its citizens. Growth in its true sense should encapsulate the overall development of a countrys citizens especially their social development. Nobel Laureate Amartya Sen has brought this out in his famous Capabilities Approach theory in which a persons welfare is measured not by the mere possession of goods but by his ability to utilize them to fulfil his needs. Sens theory forms the basis of the HDI rankings published annually by UNDP. A lot of papers have been published analysing the relationship between economic growth and social development as mentioned in Johannes Fedderke and Robert Klitgaards Economic Growth and Social Indicators: An Exploratory Analysis1. In his paper, Economic Growth, Social Development and Interest Groups2, published in the Economic and Political Weekly, C.S.C Shekhar states that although there has been excess intervention by the government in the sphere of economic reforms, state intervention in the social sector has been insufficient and ineffective leading to widespread deprivation in India. Some other economists such as Jonathan Temple and Paul A. Johnson have tried to explain the failure of growth in African countries in terms of failure of social capability. In his paper, An Analysis of Causal Flow between Social Development and Economic Growth: The Social Development Index3, Krishna Mazumdar has attempted to verify the existence of a causal relationship between social development and economic growth by developing a new index. In the Indian context, in spite of our phenomenal growth in GDP, we continue to languish behind most countries when it comes to the leading social indicators. As of 2010, India ranks 11th in the world in terms of GDP but is a dismal 119th among 169 nations in the HDI rankings. Despite all the research, the fact remains that when it comes to social development, the Indian government prefers to play a passive role rather than an active one.

Objective
The purpose of this report is to analyse the development of the social sector especially the health and education sectors in India. The report tries to establish a relationship between economic growth (growth rate of GDP) and social growth. It also analyses the social development across the different states in India. Based on the level of development of each of the individual states, we assign rankings to each of the states and then suggest policy measures which have worked in favour of these states and how these can be adopted in other states.

Economic Development and Cultural Change, Vol. 46, No. 3 (April 1998), pp. 455-489 Economic and Political Weekly, December 2005 3 American Journal of Economics and Sociology, Vol. 55, No. 3 (Jul., 1996), pp. 361-383
1 2

Group 6, Section B Neeraj Saini Nrisingha Ganguly PGP27094 PGP27096

Rachit Sharma Revanth P PGP27102 PGP27111

Sairam K PGP27113

Sunil Kumar PGP27125

Data Sources and Methodology

As a starting point for this project, we will analyse data available with www.indiastat.com, Ministry of Finance and other governmental bodies to determine how the government policies have evolved over these years. Secondary data regarding the calculation of the HDI will also be taken from reports published by the UNDP. The primary data that we will be using will be the data on Expenditure on Education on the government of India and the Literacy-related data available on www.indiastat.com. This data is available at a country-wide and at a state level which will be of use in our analysis. The 11th Five Year Plan documents available on the Planning Commission website will also be used as a reference The project will primarily be a statistical analysis with econometric elements. A regression analysis will be performed to analyse the strength of the relationship between the economic growth and social growth. Certain basic analytical frameworks might be developed to substantiate the statistical results.

Usefulness of Report
The policy recommendations that we intend to come up with will hopefully be realistic and implementable at the macroeconomic level and if implemented will hopefully have a positive effect on the bleak social scenario in India. Our recommendations will be based on an analysis of the social policies of the states which fare well in the HDI measures.

References
Das, A. (1999). Socio-Economic Developments in India: A Regional Analysis. Development and Society , 313-345. Fedderke, J., & Klitgaard, R. (1998). Economic Growth and Social Indicators: An Exploratory Analysis. Economic Development and Cultural Change , 46 (3), 455-489. IndiaStat. (n.d.). Retrieved 10 08, 2011, from www.IndiaStat.com: http://www.indiastat.com/education/6370/literacy/6371/stats.aspx Mazumdar, K. (1996). An Analysis of Causal Flow between Social Development and Economic Growth: The Social Development Index. The American Journal of Economics and Sociology , 55 (3), 361-383. Sekhar, C. (2005). Economic Growth, Social Development and Interest Groups. Economic and Political Weekly , 40 (50), 5338-5347.