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The market fundamentals in a knowledge-driven economic environment are closely associated with the quality of human resources. The differences in the stock of human resources determine the process of convergence or divergence among countries and in turn the overall position and power of the country in the world. The countries that fail to increase their share in global knowledge market face marginalization. South Asia, in general, and countries in the region (especially India), in particular, have experienced unprecedented growth since 1990s. It helped in poverty reduction and raised the human development index. However, though there is hardly any improvement in the relative HDI ranking. Despite the high growth rate, the absolute number of people in poverty has not gone down, and health and education are still areas of serious concern. The region is still grappling with the problems of human development, both in absolute and relative terms. India, Pakistan, Bangladesh and Nepal ranked between 124 and 152 in terms of Human Development Index (HDI) during all these years. Sri Lanka ranked between 90 and 99. However, in terms of real per capita GDP (US $ PPP) their ranking was between 143 and 179 in 2005. It is, thus, worth noting that South Asia could not attain any note-worthy improvement in its relative ranking. India's rank went up to 124 in 2000 from 139 in 1995 but later went down to 128 in 2005. Similarly, Pakistan's rank went down from 128 in 1992 to 136 in 2005. Bangladesh, however, registered a marginal improvement, from 147 in 1995 to 140 in 2005. Nepal seems to have done better a little better during this period. Also worth noting is the fact that the ranking of these South Asian countries went down in 2007, as compared to 2000. This means some other countries have outperformed South Asian countries in improving their HDI. This paper, organized into nine sections, attempts to provide some insight into few of the factors that are responsible for the above mentioned trends. Section 1 dwells on rationale of human development. Section 2 presents GDP growth rate. Status of human development in South Asia is discussed in section 3. Section 4 and 5 present health and educational parameters in South Asia. Inter-country inequality in human development is discussed in section 6. Human development and priorities of public spending in South Asia are the subject matter of section 7. Section 8 highlights rural-urban gap in human development. The last section summarizes the main findings and the policy implications. South Asia, thus, needs to learn from the history and experience of the present day developed countries and high-performing economies. The region must develop the human capabilities, along with human freedoms, while moving towards a high growth trajectory. With huge amount of human resources they possess seamless possibilities of economic growth.