HUMAN CAPITAL SCORE
- September 26, 2018, 5:13 pm
India ranks 158th in the world for its investments in education and health care, according to the first-ever scientific study ranking countries for their levels of human capital.
ABOUT THE STUDY
The study, conducted by the Institute for Health Metrics and Evaluation (IHME) at the request of the World Bank, is the first of its kind to measure and compare the strength of countries’ “human capital”. The study underscores that when a country’s human capital score increases, its economy grows.
Learning is based on average student scores on internationally comparable tests. Components measured in the functional health score include stunting, wasting, anaemia, cognitive impairments, hearing and vision loss, and infectious diseases such as HIV/AIDS, malaria, and tuberculosis.
It shows the association between investments in education and health and improved human capital and GDP.
As the world economy grows increasingly dependent on digital technology, from agriculture to manufacturing to the service industry, human capital grows increasingly important for stimulating local and national economies.
RANKING BASED ON STUDY
The study, published in journal The Lancet, says that India is ranked at 158 out of 195 countries in 2016, an improvement from its position of 162 in 1990. It showed that India is falling behind in terms of health and education of its workforce, which could potentially have long-term negative effects on the Indian economy. The study is based on analysis of data from sources, including government agencies, schools, and health care systems.
The nation is placed behind Sudan (ranked 157th) and ahead of Namibia (ranked 159th) in the list. The U.S. is ranked 27th, while China is at 44th and Pakistan at 164th.
South Asian countries ranking below India in this report include Pakistan (164), Bangladesh (161) and Afghanistan (188). Countries in the region that have fared better than India in terms of human capital include Sri Lanka (102), Nepal (156), Bhutan (133) and Maldives (116).
The study places Finland at the top. Turkey showed the most dramatic increase in human capital between 1990 and 2016; Asian countries with notable improvement include China, Thailand, Singapore, and Vietnam. Within Latin America, Brazil stands out for improvement. All these countries have had faster economic growth over this period than peer countries with lower levels of human capital improvement.
In addition, the greatest increase among sub-Saharan African countries was in Equatorial Guinea.
Human capital is a measure of the education and health levels in a population, expressed as the number of expected years lived between the age of 20 and 64. It is considered an important determinant of economic growth.
By taking into account life expectancy, functional health, years of schooling and education quality, the quality of labour generated within a country can be estimated, compared with other nations and areas for increased investment focus identified.
HEALTH INVESTMENT AND MARKET IN INDIA
The healthcare market can increase three fold to Rs 8.6 trillion (US$ 133.44 billion) by 2022.
India is experiencing 22-25 per cent growth in medical tourism and the industry is expected to double its size from present (April 2017) US$ 3 billion to US$ 6 billion by 2018.
There is a significant scope for enhancing healthcare services considering that healthcare spending as a percentage of Gross Domestic Product (GDP) is rising. The government’s expenditure on the health sector has grown to 1.4 per cent in FY18E from 1.2 per cent in FY14.
The hospital and diagnostic centers attracted Foreign Direct Investment (FDI) worth US$ 5.25 billion between April 2000 and June 2018, according to data released by the Department of Industrial Policy and Promotion (DIPP).
EDUCATION INVESTMENT AND MARKET IN INDIA
The education sector in India is poised to witness major growth in the years to come as India will have world’s largest tertiary-age population and second largest graduate talent pipeline globally by the end of 2020. The education sector in India is estimated at US$ 91.7 billion in FY18 and is expected to reach US$ 101.1 billion in FY19E.
Higher education system in India has undergone rapid expansion. Currently, India’s higher education system is the largest in the world enrolling over 70 million students while in less than two decades, India has managed to create additional capacity for over 40 million students. By 2025, the segment is expected to reach US$ 35.03 billion.
The country has become the second largest market for e-learning after the US. The sector is expected to reach US$ 1.96 billion by 2021 with around 9.5 million users.
The total amount of Foreign Direct Investments (FDI) inflow into the education sector in India stood at US$ 1.67 billion from April 2000 to December 2017, according to data released by Department of Industrial Policy and Promotion (DIPP).