India’s Human Capital: The Regulatory Context for Leveraging Federalism

Abstract

Investing in human capital through interventions in nutrition, health, and education is critical for achieving sustainable inclusive growth. However, despite many public interventions, India’s human capital indicators remain low, and have likely worsened from the disruptions caused by the COVID-19 pandemic. There are also significant inter-State disparities. India’s human capital interventions have been marked by growing centralisation, not just by the Centre vis-à-vis the States, but also by the States vis-à-vis local governments, that form the third tier in India’s federal structure. This growing centralisation may have misaligned incentives with respect to accountability and effective delivery of public services. Drawing from international best practices and an analysis of the constitutional scheme, a more decentralised and targeted approach within the contours of India’s federal structure may be the best way to build civil society engagement, address failures in accountability, and ultimately, improve India’s human capital outcomes.