VIVAADAM 05-Jan-2012 Arvind Panagariya
That Kerala has the best indicators of health and education outcomes among all Indian states and enjoys a low rate of poverty is beyond question. The state unequivocally enjoys the highest male and female literacy rates and life expectancy at birth, and the lowest rates of infant mortality, maternal mortality and malnutrition.
Because the communist and other left-of-centre governments have ruled Kerala for the better part of its post-Independence history, analysts routinely attribute its superior achievements in health and education to the high priority these governments have allegedly assigned to equity and related social goals over time. This view has gained so much currency that, while its advocates feel little obligation to offer supporting evidence, detractors remain ill at ease to insist upon it.
Yet, like all conventional wisdom, this too must be subjected to careful empirical scrutiny and, if need be, challenged. Begin with equity. Going by the latest available calculations from the expenditure survey conducted by the National Sample Survey Organisation (NSSO), Kerala had the highest rural and urban inequality among the largest 15 (by population) Indian states in 2004-05. The state has shown consistently high, if not the highest, levels of inequality since NSSO began conducting large-scale “thick” expenditure surveys in 1973-74.
High inequality means that, contrary to claims by many, Kerala could not have achieved the decline in poverty without significant increases in income. Indeed, data on incomes and expenditures support this inference. An ongoing joint study of the 15 largest states by Columbia University and the National Institute of Public Finance and Policy shows that since 1980-81, the earliest year from which systematic gross state domestic product (GSDP) data are available, Kerala consistently ranks among the top five states by per capita GSDP. Indeed, in the latest 2009-10 thick NSSO expenditure survey, Kerala tops the list of states ranked by per capita expenditures in both
rural and urban areas.
Given Punjab and Haryana had enjoyed higher per capita expenditures than Kerala in 1983, this fact points to faster growth in per capita expenditures in the latter than the former. Poverty levels in urban and rural Kerala have, thus, fallen not because its left-of-centre governments promoted equity but because per capita expenditures rose rapidly, thanks in large part to inflows of remittances.
But what about education and health? In a nutshell, Kerala enjoys the highest indicators in these areas because it started at the highest level at Independence. In 1951, it had a literacy rate of 47% compared with 18% for India as a whole and 28% for Maharashtra, the closest rival among the large states. By 2011, these rates had risen to 94, 74 and 83%, respectively. The gains made, thus, equal 47, 56 and 55 percentage points for Kerala, India and Maharashtra, respectively. Even Bihar, the poorest state in India, made a gain of 50 percentage points over the six decades, beating Kerala!
The story is no different in health. Take just two indicators for which i am able to obtain data going back to the 1970s: life expectancy at birth and infant mortality per 1,000 live births. Life expectancy during 1970-75 was 62 in Kerala, 50 in India and 54 in Maharashtra. By 2002-06, the three entities had added 12, 14 and 13 years, respectively, to these life expectancies. Among the large states, Tamil Nadu and UP made the most impressive gains: 17 years each. In a similar vein, whereas Kerala lowered its infant mortality rate by 46 deaths per 1,000 live births between 1971 and 2009, Gujarat achieved a reduction of 96, Tamil Nadu of 85 and Maharashtra of 74.
Can we find compelling evidence of successful public sector interventions in education and health as the source of sustained high levels of education and health in Kerala? The answer to even this question is in the negative. Consider health first. True, setting aside the small state of Goa, whose public expenditures on health are consistently three to four times those of Kerala, the latter has ranked first or second in per capita public expenditures on health since 1991-92.
But this observation masks two facts. One, these expenditures have hovered around a bare 1% of GSDP. Two, and much more importantly, private expenditures on health dwarf public expenditures in Kerala: in 2004-05, the latest year for which we have data, whereas public expenditures amounted to just 0.9% of GSDP, private expenditures were a gigantic 8.2%. The corresponding Indiawide figures were 0.9 and 3.6% of GDP, respectively.
The proportion of the population accessing public health services reinforces this story. In 2004, only one-third of rural and one-fifth of urban population chose the public health system for non-hospitalised treatment. Likewise, only about one-third of the population in both rural and urban areas chose public facilities for hospitalised treatment.
This same pattern is observed in education. NGO Pratham carries out extensive surveys of children in school up to 16 years of age in rural India. According to its latest report ASER 2010, excluding two or three tiny northeastern states, at 53% Kerala has the highest proportion of students between ages 7 and 16 in private schools in rural India. The corresponding figure for the nearest rival, Haryana, is barely 40%. No matter how we look at it, the conventional and dominant story of Kerala as a state-led success crumbles in the face of hard facts.The writer is a professor at Columbia University.