Efficiency in Human Development Achievement

Research on human development has received considerable importance in India from both academics and a policy point of view. However, previous studies on human development have mainly focused on the equity aspects of development without considering the resource base. The current study seeks to estimate efficiency level of Indian states in achieving various dimensions of human development by using data envelopment analysis (DEA) for the periods 1981, 1991 and 2001. It is seen that Delhi, Kerala and Tamil Nadu with relatively high achievement rates in health and education are operating at the efficiency frontiers. On the other hand, Bihar, Madhya Pradesh, Orissa and Uttar Pradesh have low outcomes, but also face the problem of limited scope for improving these outcomes and catching up with the better-off states. It is argued here that adequate inputs need to be made available for such states—either by generating and investing more in every sector or by better usage of existing centrally sponsored schemes. The study has also made an attempt to identify the determinants of efficiency. It is found that greater road connectivity, share of expenditure on social sector, fund allocation to the local bodies and share of state’s own-tax revenue tend to increase the efficiency level, and higher crime rates and corruption tend to decrease the efficiency level.