Introduction

Abstract

With an impressive economic growth rate averaging around 7.0 percent during 2003–2004 to 2019–2020, India is currently the fifth largest economy in the World. The growth has enabled India to make remarkable progress in absolute poverty reduction and make significant strides in its progress towards achieving Sustainable Development Goals. However, several crucial sectors of importance from the Human Development perspective, namely, health and education, continue to receive lower than desired level of attention. Over the period 2014–2015 to 2019–2020, the expenditure on education sector marginally improved from 2.8 to 3.1 percent of the gross domestic product (GDP), but remained well below the desired level of about 6 percent of GDP. The health sector over the same period improved its share from 1.2 to 1.6 percent of GDP, but the allocation in this sector too stayed below the recommendations of the 15th Finance Commission. The manifestation such under-allocation is reflected through worrying trends across various human development dimensions including close to 35 percent of the children in India suffering from malnutrition. It is also reflected in continuing under performance of India in the global human development index rankings. Equally concerning is India’s below par achievement in terms of gender equality. As per the World Economic Forum’s latest Global Gender Gap Report 2021, India slipped as many as 28 positions and ranked 140 among 153 countries. Among South Asian countries, only Pakistan and Afghanistan had lower achievements than India in bridging the gender gap. The gender gap is contributed among other dimensions by low levels of female labor force participation rates and significant gap between men and women in terms of the income earned. Further, the growing population, growing urbanization and higher consumption needs pose serious concerns regarding the sustainability of the impressive economic growth. The Covid-19 pandemic aggravated the already decelerating economic growth and pushed the GDP growth rate to negative digits. This has also put constraints on fiscal space to shape-up fast and effective recovery. The economic recovery is expected to take time and the impact of pandemic will be felt more acutely on the informal sector. All this will further hamper India’s developmental aspirations.