CHAPTER 5

Social Infrastructure

The preceding chapter analyzed the economic infrastructure, and this chapter concentrates on a discussion of the social sector. There are three distinct components of social infrastructure—health, education, and other areas—that facilitate the effective use of other components of the social sector for the benefit of society. Special emphasis is given to health and education as these components directly help to build up human capital and enhance human capabilities to enable people to enjoy a higher standard of living.

1. Health is one of the three key determinants of the Human Development Index (HDI) in addition to income and knowledge. The capability to lead a long and healthy life is considered one of the three essential elements of enlargement of people’s choices at all levels of economic development. The required infrastructure for health care is created in terms of hospitals, dispensaries, health centers, and so on and the formation of human capital in the form of doctors, nurses, and others. It is important to remember that health is a state subject. Social sector programs in general, and health care in particular, fall largely under the jurisdiction of the state governments. The central government, however, supplements the states’ efforts by making additional resources available for specific programs. Special attention is needed for poorer sections in the matter of health care.
        Health should be viewed not merely as the absence of disease but as a state of complete physical, mental, and social well-­being. The determinants of good health are access to various types of health services and an individual’s lifestyle choices, personal, family, and social relationships. It is important to have a sound strategy to deliver preventive, curative, and public health services. Other sectors that impact on good health are clean drinking water and sanitation. As of 2013, India’s health care system consisted of a mix of public and private sector providers of health services. Networks of health care facilities at the primary, secondary, and tertiary level, run mainly by state governments, provide free or very low-cost medical services. There is also an extensive private health care sector, covering the entire spectrum from individual doctors and their clinics to general hospitals and superspeciality hospitals (GOI 2013, 12th Five Year Plan, Vol-III). The existing system suffers from the following weaknesses:
   1. Availability of health care services from the public and private sectors taken together is quantitatively inadequate.
   2. Quality of health care services varies considerably in both the public and private sectors.
   3. Affordability of health care is a serious problem for the vast majority of the population, especially in tertiary care.
   4. Problems are likely to worsen in the future. Health care costs are expected to rise, because, with rising life expectancy, a larger proportion of India’s population will become vulnerable to chronic noncommunicable diseases (NCDs), which typically require expensive treatment. Public awareness of treatment possibilities is also increasing, which, in turn, increases the demand for medical care. In the years ahead, India will have to cope with health problems reflecting the dual burden of disease, that is, dealing with the rising cost of managing NCDs and injuries while still battling communicable diseases that remain a major public health challenge, both in terms of mortality and disability.

The total expenditure on health care in India, taking public, private, and household out-of-pocket (OOP) expenditure was about 4.1 percent of the GDP in 2008–2009 which is broadly comparable to other developing countries, at similar levels of per capita income. The public expenditure on health was, however, only about 27 percent of the total in 2008–2009 (NHA 2009), which is very low by any standard. The consensus among stakeholders is that the magnitude of the challenge is such that viable and longer-term architecture for health can be put in place only over 15 to 20 years. A start must, however, be made immediately toward achieving the long-term goal (GOI 2013, 12th Five Year Plan, Vol-III).

In September 2018, the central government launched the Ayushman Bharat scheme, tipped as the world’s largest government health care program, which promises a ₹5,00,000 ($6.8 K) health insurance coverage to 10 crore (100 million) vulnerable families or 50 crore (500 million) individuals in India. The scheme itself has been important in putting the spotlight on a much-neglected area of providing substantive health insurance, taking a step toward universal health care (UHC). There are many challenges, however. There’s a buoyancy in the way of thinking. If health is a part of that buoyancy, then UHC is not too far (Mohan and Kigali 2019).

The health and wellness centers (HWCs) under the Ayushman Bharat scheme have the potential to help achieve the UHC goal, but inadequate infrastructure and an insufficiently skilled workforce remain major roadblocks. A new model needs to be developed to manage population health efficiently through the Ayushman Bharat components, the HWCs, and the Pradhan Mantri Jan Arogya Yojana (PMJAY).

NITI Aayog (2019b) believes the health care system for New India will rest on reforms in two key areas—health care financing (64 percent of the health care spending by households in the country is OOP) and health care delivery (over 98 percent of the health care facilities in India employ 10 or fewer persons, dragging down the efficiency of delivery). The NITI Aayog suggested a roadmap that includes shifting health care financing to insurance and reducing fragmentation of both risk-pools for better insurance coverage and health service provision by incentivizing the service provider, which is needed for consolidation.

Government spending on health in India is just 1.13 percent of the GDP, compared with the overall health care spending of 4 percent of the GDP. India is spending a very low percentage of its GDP and lags behind comparable economies on quite a few metrics of health system performance. The path forwards to focus on delivering on the unfinished public health agenda. India is in the midst of an epidemiological transition in which the morbidity burden is shifting away from infectious diseases and toward NCDs; hence, India must simultaneously strategize to deal with infectious and preventable diseases, and NCDs. Given this shift, medical care alone may not prove a sustainable strategy; a large part of the battle will be prevention—nutritional interventions, checking air and water pollution, and so on, therefore, demand as much focus as sanitation and vaccination. As for guiding health care financing away from OOP to insurance, the high OOP expenditure itself can be leveraged—if the nature of financing by households is guided away from point of service (payments made directly to health care facilities) to risk pooling (insurance), it could create large pools of financing that would reduce economic barriers to health care (high individual costs) as well as reduce the poverty-push of the financial costs of illness. It doesn’t explicitly pitch for a similar scheme for the nonpoor or the middle-class. PMJAY could be implemented with an eye on its potential to influence overall health care transformation in India beyond its current explicit mandate.

If central governments play an equalization role, it is very difficult to do so in the absence of a standard benefits package, which would set the minimum level of services that a country wants all members of society to have, as well as can afford and use to estimate costs and fund allocations. It should be mandatory health insurance for all does seem to be the recommendation. While it may seem desirable, any expanded future health insurance coverage the government may plan must carefully study the on-ground shortcomings—from fraud to underdelivery—of the PMJAY scheme (NITI Aayog 2019b).

2. Education is an important component of the social infrastructure where also India has a long way to go considering the current level of various educational indicators. Education is the most important lever for social, economic, and political transformation. A well-educated population, equipped with relevant knowledge, attitudes, and skills, is essential for economic and social development in the 21st century. Education is the most potent tool for socioeconomic mobility and a key instrument for building an equitable and just society. Education provides skills and competencies for economic well-being. Education strengthens democracy by imparting to citizens the tools needed to fully participate in the governance process. Education also acts as an integrative force in society, imparting values that foster social cohesion and national identity (GOI 2013, 12th Five Year Plan, Vol-III).
       The enrolment ratios for the elementary level are close to 100 percent. In addition, the gross enrolment ratios (GERs) for secondary education have also increased, even though the net enrolment ratio (NER) is still low. Data, moreover, shows enrolment is largely similar across gender and castes. The Annual Status of Education Report (ASER 2016) surveys estimate that national attendance in primary and upper primary schools is 71.4 percent and 73.2 percent respectively, with considerable differences across states. The retention rate in elementary school is 70.7 percent. The retention rate among scheduled tribes (STs) is 50.1 percent. The learning outcomes of those enrolled in the schooling system need improvement. The previous National Assessment Survey (NAS) conducted by the National Council for Educational Research and Training (NCERT) reports that over 60 percent of Grade V students scored below 50 percent across subjects. Findings by an independent ASER household level survey (2016) in rural areas shows that among Grade V children, only 47.8 percent could read Grade II level text and only 26 percent could do Grade V level arithmetic. Despite increasing access, enrolment in government primary schools declined by 20.31 million in absolute numbers from 2007–2008 to 2015–2016, while enrolment in private primary schools increased by 1450 million over the same period.
       The reasons for the move from public to private schools are the perception, among parents, of better quality of education being provided by private schools (which is also borne out by ASER data over the years), and the growth in private schools having affordable fees.
       The mental pressure on students, especially in secondary education, has been increasing. There is a need to reduce the mental stress students suffer. The constraints in this area are as follows:
   1. Inadequate public funding in the sector
   2. Disproportionate focus on school infrastructure as opposed to learning outcomes
   3. Challenges in governance and monitoring mechanisms for learning outcomes
   4. Accountability systems in government schools
   5. Inadequate teacher training, large number of teaching vacancies, and rampant absenteeism
   6. Limited options for vocational education in the school system
   7. Inadequate support and counseling given to children in schools

Education sector funding by government spending on education as a whole (not just school education) should be increased to at least 6 percent of the GDP by 2022. At present, allocation to the education sector by the centre and the states remains close to 3 percent of the GDP, while according to the World Bank, the world average in this regard is 4.7 percent of the GDP (NITI Aayog 2018b). The bulk of public spending on education is incurred by the state governments.

Way ahead: Policymakers need to address the challenges in an integrated and holistic manner. The focus needs to be on meeting the residual needs of access with a sharper focus on the needs of the disadvantaged social groups and the difficult-to-reach areas; improving the school infrastructure in keeping with the Right to Education (RTE) stipulations; increasing enrolment at the upper primary and secondary school levels; lowering dropout rates across the board; and improving the quality of education, with a special emphasis on improving learning outcomes. The four main priorities for education policy have been access, equity, quality, and governance. It is critical for the country to make secondary education much more job relevant through skills training within the schools. For this, higher investments will need to be made to equip secondary schools with teachers/trainers who have technical skills and equipment (such as workshop machines, computer equipment) that can be used to impart technical and vocational skills (GOI 2013, 12th Five Year Plan, Vol-III).

As regards school education, NITI Aayog (2018b), has emphasized the following policy measures:

1. Stress on learning outcomes
2. Right to learning and measurement of remediation
3. The comprehensive national achievements survey initiated in 2017 needs to be institutionalized on an annual basis
4. The remediation process should be made part of the education system and should be run concurrently with regular classes so that no child gets left behind
5. Flexibility in the education stream and vocational education
6. Teacher training
7. Reducing mental stress

Higher education: India has 864 university-level institutions, 40,026 colleges, and 11,669 stand-alone institutions. The number of university-level institutions grew by about 25 percent and the number of colleges by about 13 percent during 2012–2017. The private sector accounts for a large share of these institutions, managing 36.2 percent of universities, 77.8 percent of colleges, and 76 percent of stand-alone institutions in 2016–2017. India’s higher education GER (calculated for the age group, 18 to 23 years) increased from 11.5 percent in 2005–2006 to 25.2 percent in 2016–2017 (AISHE, 2017). India, however, lags behind the world average of
33 percent and that of comparable economies. In addition, higher education suffers from the following challenges:

1. Regional and social disparities continue to exist.
2. Quality is lower in higher education compared with that of developed countries. Few Indian institutions feature in the top 200 in world rankings.
3. Employability of graduates is an issue.

Recognizing the need to improve access, equity, and excellence in higher education in the country, the government has taken the following steps (NITI Aayog 2018b):

1. The national assessment and accreditation reforms process has been fast-tracked and made more transparent. The emphasis is more on self-assessment, data capture, validation by third party evaluation, and objective peer review. This is a paradigm shift from the subjective assessment parameters adopted earlier.
2. A three-tiered graded autonomy regulatory system has been initiated, with the categorization of institutions as per their accreditation score by the National Assessment and Accreditation Council (NAAC). Category I and Category II universities will have significant autonomy (NITI Aayog 2018b).

Teacher education and training: There cannot be a quality education system without quality teachers. A thorough revamp of the entire ecosystem of teacher education both at the school and college level is, therefore, necessary. In this context, the objectives for 2022–2023 are as follows (NITI Aayog 2018b):

1. Enforcing minimum teacher standards through rigorous teacher eligibility tests and criteria for the induction of teachers
2. Improving in-service teacher training system
3. Increasing teacher accountability for learning outcomes of students
4. Addressing the problem of teacher vacancies and teacher absenteeism

While teacher education institutes churn out a large number of candidates with a bachelor’s and master’s in education, the quality of teacher education has not been assured. In 2015, only 13.53 percent candidates who took the Central Teacher Eligibility Test (CTET) qualified. A primary reason for this is the inadequate accreditation and grading process followed by the NCTE in the past. In 2017, the NCTE initiated the process of collecting information from the institutes and grading them on the basis of their learning outcomes. At the higher educational level, the pass percentage in the UGC National Eligibility Test (NET) is also low, where only 6 percent candidates qualify. Besides, the quality of PhDs in several institutions does not meet the required standard (NITI Aayog 2018b).

To tackle the problem of teacher demand–supply imbalance, each state must develop a teacher-demand forecast model for all levels, starting from elementary to higher education. The surplus and deficiency can be aggregated at the national level and appropriate decisions taken on whether to set up new training institutions or provide leverage to existing ones to correct overall deficiencies (NITI Aayog 2018b).

3. Human Development Index (HDI): The annual HDI 2019 report ranked India at the 129th position on 2019’s HDI, one rank above last year’s ranking, out of a total 189 countries. However, India remains the home of 364 million poor people (28 percent), out of a global population of the 1.3 billion (HDR 2019). The HDI is a summary measure for assessing long-term progress in three basic dimensions of human development: a long and healthy life, access to knowledge, and a decent standard of living. India’s HDI for 2018 improved to 0.647 compared to 0.640 the year before. However, when the value is discounted for inequality, the HDI falls to 0.477, a loss of 26.3 per cent due to inequity in the distribution of the HDI dimension indices. This is higher than the average loss due to inequality for medium HDI countries, at 25.9 percent, and for South Asia, at 25.9 percent. India’s development initiatives like the Pradhan Mantri Jan Dhan Yojana (for financial inclusion) and Ayushman Bharat (for universal health-care) are crucial in ensuring the promise to leave no one behind and fulfil the vision of development for all.
       More Indian men and women were showing biases in gender social norms, indicating a backlash to women’s empowerment. India has a Gender Inequality Index (GII) value of 0.501, ranking it 122 out of 162 countries in the 2018 index. In India, ­ 11.7 percent of Parliamentary seats are held by women (compared to 17.1 percent in South Asia). And 39 percent of adult women have reached at least a secondary level of education (39.9 percent in South Asia) compared to 63.5 percent of their male counterparts. Marking significant progress in poverty alleviation, India managed to lift 271 million people out of poverty from 2005–06 to 2015–16. Nevertheless, it still accounts for 28 percent of the 1.3 billion multi-dimensional poor in the world (HDR 2019). This confirms that inequality remains a challenge for India as it progresses economically, though the government and various state governments have, through a variety of social protection measures, attempted to ensure that the gains of economic development are shared widely and reach the farthest first. In India, despite considerable progress at the policy and legislative levels, women remain significantly less politically, economically, and socially empowered than men.1
4. Real estate infrastructure: Real estate is a function of multiple parameters and state of the overall economy, so if there is an overall boost to the economy through farm spending and so on, we will see a rub-off effect on the real estate sector. Also, affordable housing looked like a good bet in 2017. And, in fact, the continued focus on smart city projects is expected to boost real estate activities further. Number of steps have been taken like the introduction of the Real Estate Regulatory Act 2016, initiation of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) in 2014, along with the adoption of affordable housing scheme. All these are meant to provide a fillip to the realty and construction sector to attract more investments, and help create demand and growth.
       The Real Estate (Regulation and Development) Act (RERA), 2016 holds the key to the future growth of the Indian real estate sector because it has the potential to clean up the sector at all levels. The RERA has kicked in—no more will unscrupulous smaller builders or even larger organized developers be able to take buyers for a ride. RERA requires developers to maintain separate escrow accounts in relation to each project and deposit 70 percent of the collections in such an account to ensure that funds collected are utilized only for the specific project. RERA renders brokers and agents punishable if they do not comply with and abide by RERA’s strictures and ruling. With RERA, homebuyers who use the services of real estate agents and agencies will be protected and have access to quick legal redress in case of faulty business practices. Under RERA, agents and agencies will have to ensure that they are duly registered with the regulator. By registering themselves, they effectively declare themselves accountable for their business activities and practices. Real estate brokerages that survive this shake-up will not necessarily be defined by their size but by the manner in which they have been conducting business. There will be several small-scale brokerages that have already built for themselves a reputation for transparent practices for whom it will be business as usual post-RERA. Along with the larger, organized real estate advisory firms that have a business philosophy based on ethics rather than profiteering, these agencies will gain a significantly bigger market share (Puri 2017).
       RERA does not deal with the problems of developers regarding force majeure (acts of god outside their control), which brings in natural disaster resulting in a shortage of labor or issues on account of there not being a central repository of land titles/deeds. Some of these concerns are legitimate but the real estate sector has become a sort of untamed horse galloping in all directions. Eventually, the benefit of any statute is contingent on its effective implementation. Despite a model set of rules, only a few states have notified their rules. The onus is now on states to formulate rules and establish the regulatory authorities on time. There shouldn’t be just paper compliance, by designating an existing authority to take additional charge as the real estate regulator, as that would affect the timeliness prescribed under the act (Varma 2017).
5. Housing: The housing sector is considered a critical contributor to economic growth because of its ability to generate demand in multiple industries (such as the core industries of steel and cement, or companies selling tiles, plumbing, or electrical fittings), provide both direct and indirect employment, and generate income for service sectors (such as architecture). Finance is a key lubricant for the sector, both for builders and buyers. Like other financial activities, housing finance too is subject to risks and has natural circuit breakers. As the magnitude of housing shortage in the country is huge, requiring substantial investments in housing and related infrastructure, the banks, financial institutions, and housing finance companies have not lent to the poorer segments of the population for affordable housing segments (GOI 2013, 12th Five Year Plan, Vol-II).
       In India, there is an estimated shortage of around 40 million houses (urban and rural). In addition to the population growth of 1.4 percent per annum, favorable demographics, nuclearization of families, migration to urban areas, fiscal benefits, rising income and aspirations could all lead to another 10 million per annum demand for houses.
       The government has as one of its key priorities ensuring safe and affordable housing for all with a water connection, toilet facilities, and
   24 × 7 electricity supply and access. There is a proposal to build 295 million housing units in rural areas and 12 million housing units in urban areas. Housing has never been stressed this much in the past. Achieving the goal of housing for all will be a big step. Given the forward and backward linkages of the housing sector, the focus on affordable housing could bring rich dividends for other distressed sectors such as steel and cement.
       The housing-for-all scheme faces various constraints:
   1. Lack of access to finance from formal financial institutions
   2. Long-drawn out, multilevel approval system in urban areas in a large majority of municipal jurisdictions
   3. Limited private sector participation in affordable housing schemes in urban areas
   4. Limited access to suitable land banks for affordable housing projects
   5. Capacity constraints in urban local bodies (ULBs) to formulate and design mass housing projects

The strategies to overcome the constraints on affordable housing can be grouped into the following categories:

1. Access to finance
2. Technology for construction
3. Costs reduction
4. Efficient use of land

In addition, urban governance reforms, such as removing the need to obtain permission for nonagricultural use in the case of land that has been earmarked for residential purposes in master plans, amending rental laws and other allied matters , have the potential to alleviate the challenges to achieving the goal of housing for all by 2022–2023 (NITI Aayog 2018b).

Endnote

1. 1. The Economic Times. September 14, 2018. “India Ranks 130 in UN’s Human Development Index,” Editorial Comment. https://economictimes.indiatimes.com/news/economy/indicators/india-ranks-130-in-uns-human-development-index/articleshow/65812719.cms, (accessed September 17, 2019).