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Sikkim Human Development Index

Sikkim Human Development Index

The practice of human development calls for a three-pronged strategy:

Expand opportunities in Sikkim

In the human development framework, an equitable expansion of opportunities economic, social, political and cultural is regarded as being essential for ending human poverty.
A focus on expanding opportunities for people can ensure that progress can combine growth with inclusion, and social justice with equity.
Human poverty can be fundamentally traced to inadequacies and inequalities in the distribution of opportunities, between women and men, across regions, between rural and urban areas, and within communities.

Enhance security in Sikkim

Human security is more than the absence of violent conflict. For most people, a feeling of insecurity arises from worries about everyday life.
For them, security symbolizes protection from the threat of disease, hunger, unemployment, crime, social conflict, political repression and environmental hazards.
Human security complements human development by addressing ‘downside risks’ that threaten survival, healthy life, livelihoods and the dignity of human beings.
Promoting human security calls for (i) protection against downside risks—shielding people from acute threats and (ii) empowerment of people to take charge of their own lives.

Promote sustainability in Sikkim

Sustainability is a matter of distributional equity—of sharing development opportunities between present and future generations.
The strongest argument for protecting the environment today is the ethical need to guarantee to future generations opportunities similar to the ones previous generations have enjoyed.
This demands guaranteeing both intra-generational and inter-generational equity.
The purpose of sustainable development, therefore, is to create an environment in which all people can expand their capabilities, and opportunities can be enlarged for both present and future generations

Human Development Aspects in Sikkim

Human development in Sikkim is a process of enlarging people’s choices. But human development is also the objective, so it is both a process and an outcome.
Human development implies that people must influence the processes that shape their lives. In all this, economic growth is an important means to human development, but not the end.
Human development is the development of the people through building human capabilities, by the people through active participation in the processes that shape their lives and for the people by improving their lives.
It is broader than other approaches, such as the human resource approach, the basic needs approach and the human welfare approach.
The composite Human Development Index (HDI) integrates three basic dimensions of human development. Life expectancy at birth reflects the ability to lead a long and healthy life. Mean years of schooling and expected years of schooling reflect the ability to acquire knowledge. And gross national income per capita reflects the ability to achieve a decent standard of living
To measure human development more comprehensively, the Human Development Report also presents four other composite indices.
The Inequality-adjusted HDI discounts the HDI according to the extent of inequality. The Gender Development Index compares female and male HDI values.
The Gender Inequality Index highlights women’s empowerment. And the Multidimensional Poverty Index measures nonincome dimensions of poverty

Human development—a people-centred approach in Sikkim

Human development is about acquiring more capabilities and enjoying more opportunities to use those capabilities. With more capabilities and opportunities, people have more choices, and expanding choices is at the core of the human development approach. But human development is also a process.
Anchored in human rights, it is linked to human security. And its ultimate objective is to enlarge human freedoms. Human development is development of the people through the building of human resources, for the people through the translation of development benefits in their lives and by the people through active participation in the processes that influence and shape their lives.
Income is a means to human development but not an end in itself. The human development approach in the 1990 Human Development Report also introduced a composite index, the Human Development Index (HDI), for assessing achievements in the basic dimensions of human development. Those dimensions of human development are to lead a long and healthy life, measured by life expectancy at birth; to acquire knowledge, measured by mean years of schooling and expected years of schooling; and to achieve a decent standard of living, measured by gross national income per capita.

Life Expectancy at Birth in Sikkim

The indicator of life expectancy at birth is used to measure the realised achievement in the health dimension, that is, ‘to be able to live a long life’.
The life expectancy at birth denotes the number of years that a child can expect to live at the time of birth, given the agespecific mortality rates in the population.
The life expectancy, however, is an indicator of very long-term improvement in health.

Mean Years of Schooling in Sikkim

Mean Years of Schooling (MYS) is one of the two indicators used to measure educational achievement in HDRs by UNDP.
It replaced the literacy rate as an indicator under the education dimension in 2010. MYS indicates the average number of completed years of education of a country’s population.
Usually, MYS is estimated for populations aged 25 years and older, which is also the indicator used in the calculation of the HDI by UNDP

Expected Years of Schooling in Sikkim

EYS is a measure of the number of years of schooling a child at the start of his or her education is expected to receive, if current rates of enrolment are maintained throughout the child’s life.

Income Per Capita

Income per capita is considered as an ‘indirect’ indicator of human development. The first HDR of UNDP (1990) observes that an indicator of ‘command over resources needed for a decent living’ requires data on access to land, credit, income and other sources.
In 2010, instead of GDP per capita, Gross National Income (GNI) per capita is taken as the indicator.
For allowing cross-country comparison, the GNI per capita of the countries was adjusted by Purchasing Power Parity (PPP) ratios.

Some Human Development Aspects in Sikkim

By 2009, over 85 per cent of children below two were fully immunized—the highest proportion across Indian states.
Institutional delivery rose to 81 per cent by 2011.
In 2005–06, Sikkim reported the lowest proportion of under-weight children (20 per cent). Only 3 per cent of children under three were severely under-weight—as against the national average of 19.5 per cent in 2005–06.
By 2011, Sikkim reported amongst the lowest percentage of population below the poverty line—8 per cent—across Indian states. In 2004–05, close to 170,000 people lived below the poverty line. By 2011, this number had come down to 51,000—a 70 per cent reduction in the number of poor.
Enrolment in primary and upper primary schooling is near universal, with net enrolment ratios being the highest in India.
Close to 93 per cent of households have electricity and 100 per cent have a latrine facility within the premises.
The sex ratio (number of females per 1,000 males) has improved from 875 in 2001 to 889 in 2011. The child sex ratio (0–6 years) for 2011 is higher at 944, which is also higher than the national average of 914.
Inequalities in the distribution of income and consumption have improved between 2004 and 2010. Sikkim registered the lowest Gini coefficient of urban consumption (0.186) across all Indian states in 2009–10.
The gap between male and female literacy rates in 2011 was 10 percentage points— 16 points less than in 2001. Sikkim ranks highest among the north-eastern states on its per capita health expenditure, Rs 1,507, which is higher than the all-India figure of Rs 1,201.
Sikkim is ranked fourth among all states of India on the Composite Educational Development Index for 2012–13—a significant jump from the 12th position in 2011–12

The Multidimensional Poverty Index (MPI) of Sikkim

The Multidimensional Poverty Index (MPI) identifies overlapping deprivations at the household level across the three dimensions of the HDI (living standards, health and education) and shows the average number of poor people and deprivations with which poor households contend.
The MPI for Indian states varies from a low of 0.051 in Kerala to a high of 0.479 in Bihar. Sikkim ranked eighth with an MPI value of 0.150.
The biggest contribution to this low MPI value has been improvements in health and nutrition.
Sikkim features as the ‘best’ in terms of the lowest levels of deprivation attributable to health and nutrition. Equally significant is the progress that Sikkim has made in providing improved sanitation

Income of People of Sikkim

In 2012–13, Sikkim reported a per capita income (net state domestic product) of Rs 142,625—the highest among the northeastern states, higher than all states and Union Territories with the exception of Chandigarh and Delhi, and more than double the all India average of Rs 68,757.
Between 2004–05 and 2011–12, Sikkim’s real per capita income more than doubled from Rs 26,690 to Rs 70,477.
In 2004–05, Sikkim ranked 15th; by 2011–12, Sikkim ranked among the top five states in terms of per capita income.
The growth performance of Indian states. Between 2004–05 and 2011–12, Sikkim’s real per capita income grew at an annual average rate of around 15 per cent the highest among Indian states and more than twice the national average of 6.7 per cent per annum.

Employment and jobs of the People of Sikkim

Of the total workers, 62 per cent continue to be engaged in agriculture, forestry and fishing. Another 13 per cent of the workers are employed in the secondary sector (mining, manufacturing, electricity, water supply and construction), with more than half of them being employed in construction.
The tertiary sector constitutes 26 per cent of the workers. According to the Census 2011, the number of total workers increased from 263,043 in 2001 to 308,138 in 2011 an increase of 17 per cent.
A majority (55 per cent) of this increase was in the category of marginal workers. The work participation rate has increased by almost 2 percentage points in the decade 2001–11. Also, among the marginal workers, about 30 per cent were found to be employed for almost three months.

Health Aspect of People of Sikkim

Sikkim reported an infant mortality rate of 24 per 1,000 live births in 2012— considerably lower than the national average of 42. Health care in Sikkim is provided almost entirely by the public sector.
The state has established a well-functioning primary health care system through a network of two Community Health Centres, 24 Primary Healthcare Centres and 146 sub-centres.
Health care is provided, among others, by 273 doctors and nine AYUSH practitioners.
This gives an adequate ratio of approximately one doctor per 2,500 population.
Except for the Sikkim-Manipal Central Referral Hospital, which provides secondary and tertiary care, there are very few private medical institutions.
The state had four district hospitals and 1,560 hospital beds in 2012 or 2.6 beds for 1,000 people. Fourteen PHCs out of 24 were without a medical officer in June 2012; most vacancies were in north and west districts.

Nutrition aspect of People of Sikkim

In 2005–06, close to 20 per cent of Sikkim’s children below 5 years were classified as being underweight the lowest in the country against a national figure of around 43 per cent.
According to the National Family Health Survey-3 (NFHS-3), only 10 per cent of children born in Sikkim were of low birth weight.
According to NFHS-3, four out of five women in Sikkim consume milk or curds at least once a week.

Literacy and education aspects in Sikkim

In 1951, Sikkim had an overall literacy rate of less than 7 per cent, with barely 11 per cent of men and 1 per cent of women who could read and write. By 2011, the literacy rate had increased to 82 per cent in 2011 with 87 per cent of men and 76 per cent of women who could read and write.
The most developed East district came on top with 85 per cent, followed by South district (82 per cent), West district (79 per cent) and North district (77 per cent). Sikkim has a strong network of 781 government schools, 421 private schools, 71 monastic schools, 25 local body schools, 11 Sanskrit schools and three Islamic schools.
The state is also experimenting with alternative and innovative models of education. Sikkim became the second state in India to sign a Memorandum of Understanding (MoU) with the Quality Council of India on 27 March 2011 for developing accreditation standards towards quality government schools.
Enrolment in primary and upper primary schooling is near universal, with net enrolment ratios being the highest in India.
The gender parity index for enrolment in primary classes (I to V) in Sikkim is 0.98 compared to the all-India figure of 0.94. The net enrolment rate (NER) in primary education in Sikkim is encouraging.
In 2007–08, 90 per cent children aged 6–10 years were enrolled in Class I–V. Only 10 states and Union Territories are ahead of Sikkim in this category.

Poverty aspect in Sikkim

Between 2004–05 and 2011–12, Sikkim recorded a sharp fall in the poverty level—next only to Goa.
Latest data released by the Planning Commission says that in Sikkim, the proportion of people below the poverty line (BPL) came down from 30.9 per cent in 2004–05 to 8.19 per cent in 2011–12 an average annual rate of decline of over 17 per cent.
The number of people living below poverty line in Sikkim has come down from 1.70 lakh in 2004–05 to 51,000 in 2011–12 and the proportion of the poor in the Himalayan state remains well below the national average.
Sikkim has also done well on the poverty gap ratio which reflects the extent to which average consumption of the poor falls below the established poverty line, indicating the depth of poverty.
In 2011–12, Sikkim reported a rural poverty gap ratio of 0.96 next only to Goa. In 2011–12, Sikkim reported the lowest urban poverty gap ratio 0.45. Between 2004–05 and 2011–12, the poverty gap ratios fell in both rural and urban Sikkim

Some Basic Fact about Sikkim regarding Human Development

Per capita Income of Sikkim -48937 (2009-10)
Monthly per capita Consumption Expenditure of Sikkim -738.52 (2004-05)
Rural and Urban Monthly per capita Consumption Expenditure of Sikkim -688.53 & 1106.79

Sikkim : Tax and Economic Reforms

Sikkim : Tax and Economic Reforms

The economic liberalization in India , initiated in 1991, with principles of Liberalization , Privatization and Globalization (LPG) of the country’s economic policies, with the goal of making the economy more market and service-oriented and expanding the role of private and foreign investment. Specific changes include a reduction in import tariffs, deregulation of markets, reduction of taxes, and greater foreign investment. Liberalization has been credited by its proponents for the high economic growth recorded by the country in the 1990s and 2000s. And it has positive impact on the state of Bihar as can be visibly seen from various sectors.

India’s GDP has increased thereafter and also the GSDP of state has increased many folds. Between 2004-05 and 2015-16, Gross State Domestic Product (GSDP) of Sikkim has expanded at a compound annual growth rate (CAGR) of 19.44 per cent to US$ 2.75 billion whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 19.11 per cent to US$ 2.33 billion.

Agricultural Sector

The state’s economy is largely agrarian, based on the terraced farming of rice and the cultivation of crops such as maize, millet, wheat, barley, oranges, tea and cardamom. Sikkim produces more cardamom than any other Indian state, and is home to the largest cultivated area of cardamom

As per the state budget 2016-17, Sikkim got certified as first fully organic state in India by the Central Ministry of Agriculture and Farmers’ Welfare as well as other recognized agencies of the country.

Organic Farming

Sikkim has been transformed as the first Organic State of the country and the world by design and have opened unlimited opportunities in sectors like Agriculture, Horticulture and Animal Husbandry.

Industrial Sector

Industries plays an important part to the development of the state. State government has taken various measures to provide impetus to the growth of the economy.

There has been a drastic shift in the sectoral contribution from primary and tertiary to the secondary sector. The overall performance of the economy of the state during 2015-16 was encouraging. At a CAGR of 33.91%, the secondary sector witnessed the fastest growth among the three sectors during 2004-05 to 2015-16. It was driven by manufacturing, construction and electricity, gas & water supply. In 2015-16, the secondary sector contributed 67.73% to the state’s GSDP at current prices.

The state follows the North East Industrial Investment Promotion Policy, 2007, which provides several incentives and concessions for investment. Institutional support is provided through various central and state government agencies viz., North East Council, Ministry of Development of North Eastern Region and Commerce and Industries Department.

The main industries like Brewing, distilling, tanning and watchmaking are located in the southern regions of Sikkim.

Tertiary sector

State government has implemented various policies to increase the growth rate of Tertiary sector. Various policies like IT Policy , Tourism Policy gives impetus for the growth of the services sector and hence development of economy. Industrial sector contributes majorly to the development, followed by the tertiary sector at 23.65% and primary sector at 8.62%. The tertiary sector grew at a CAGR of 15.23% between 2004-05 and 2015-16. The growth has been driven by trade, hotels, real estate, finance, insurance, transport, communications and other services. The primary sector grew at a CAGR of 15.55% between 2004-05 and 2015-16.

Tourism provides the main thrust to the economy. With the tranquil climate, the natural beauty and the fine cultural heritage of Sikkim, the growth of tourism has immense possibilities. There are large number of places of tourist attraction particularly the snow clad mountains, the lakes and unspoiled forest areas and valleys of flowers. The advantage of having very fine monasteries in Sikkim can also be taken to attract Buddhist tourists from countries like Japan and the South Eastern countries.

Total Receipts and Total Expenditure

For the fiscal year 2017-18, a gross expenditure of Rs. 6364.02 crores has been projected in the budget.

After taking into account recoveries amounting to Rs. 142.20 crores, the net expenditure comes to Rs. 6221.82 crores.

The fiscal deficit remains in adherence to the fiscal management targets set in the Sikkim Fiscal Responsibility and Budget Management Act, 2010, i.e. not more than 3% of GSDP. The contribution from total tax revenue is of the order of Rs. 669.51 crores and in the case of Non-Tax revenue, Rs. 426.46 crores.

The total gross expenditure includes allocations amounting to Rs. 81.76 crores under the dispensation of the North Eastern Council, Rs. 153.66 crores under Non Lapsable Pool of Central Resources, and Rs. 1326.76 crores under Centrally Sponsored Schemes.

In Union budget, the distinction between Plan and Non-Plan has been done away with from the year 2017-18 onwards. This has been done as a measure towards bringing about major fiscal and budgetary reforms while retaining the distinction on the basis of Revenue and Capital expenditures. Since the Union and the States have to work together on the methodology, State has also adopted the same system from the financial year 2017-18 budget.

Tax proposals

Accordingly, the main taxes of the State Government like the Value Added Tax, Central Sales Tax, Entry Tax, Cess and Luxury Tax etc. and also the taxes of the Government of India like the Central Excise and Services Tax, have now been subsumed in the Goods and Services Tax.

Goods and Service Tax (GST)

GST, will replace multiple state and central taxes to create one national market and single tax in the country. This bill seeks to subsume all central indirect levies like excise duty, countervailing duty and service tax and also state taxes such as value added tax, entry tax and luxury tax, to create a single, pan-India market.

GST will be a game changer in the states as they eradicate the cascading effect on goods and services.GST will bring down the cost of goods and services as there will be no cascading effects of taxes. He added that GST is expected to increase revenue by widening the tax base and improving the taxpayer compliance. 7% items are such on which no taxes would be levied, 14% items would be in the lowest bracket of 5% tax, 17% items will have 12% tax, 43% items will have 18% tax, and 19% items, which are generally not used by people will have 28% tax.

Only the Goods and Services Tax will be levied in place of all these taxes in the indirect tax regime. Petroleum products and liquor have been kept out of the GST, as of now. The rates of the tax will be uniform on goods and services in the entire nation. As per the decision taken by the GST Council, the Goods and Services Tax will be implemented from 1st July, 2017 onwards.

The State Government has made all necessary preparations for the implementation of the new tax regime so that the trade and industry of the State do not face any difficulties. E-payment will be made compulsory for the payment of taxes.

An Introduction to Economy of Sikkim

An Introduction to Economy of Sikkim

Sikkim is surrounded by vast stretches of Tibetan Plateaus in the north, the Chumbi Valley of Tibet and the Kingdom of Bhutan in the east, the Kingdom of Nepal in the west and Darjeeling district of West Bengal in the south. Sikkim has several snow-capped peaks including Kanchenjunga, the world’s third highest peak that attracts a large number of tourists from across the globe. The state has been able to bag seven out of 25 central government’s national projects to promote India as destination for adventure tourism globally.

The gross state domestic product (GSDP) of Sikkim expanded at a high compound annual growth rate (CAGR) of 19.44 per cent between 2004-05 and 2015-16.

There has been a drastic shift in the sectoral contribution from primary and tertiary to the secondary sector. In 2015-16, the secondary sector contributed 67.73 per cent to the state’s GSDP at current prices. It was followed by the tertiary sector at 23.65 per cent and primary sector at 8.62 per cent. Moreover, at a CAGR of 33.91 per cent, the secondary sector has been the fastest growing among the three sectors from 2004-05 to 2015-16. It was driven by manufacturing, construction and electricity, gas & water supply.

Agricultural Sector

Sikkim has a suitable climate for agricultural and horticultural products. It supports multiple crops; viz., rice, wheat, maize, millet, barley, urad, pea, soya bean, mustard and large cardamom. Sikkim is the top producer of large cardamom, contributing over 80 per cent to India’s total production. As per the state budget 2016-17, Sikkim got certified as first fully organic state in India by the Central Ministry of Agriculture and Farmers’ Welfare as well as other recognized agencies of the country.

Organic Farming

Sikkim has been transformed as the first Organic State of the country and the world by design and have opened unlimited opportunities in sectors like Agriculture, Horticulture and Animal Husbandry.

Currently, state is exporting large cardamom, ginger, buckwheat, turmeric and cymbidium orchids. Our aim has been to fulfil the domestic market and export our surplus production outside the state.

Under the National Mission on Agricultural Extension & Training, new emerging organic technologies are being disseminated to the farmers through training, demonstration, farm schools, exposure visits, formation of commodity interests groups and food security groups, etc.

The Sikkim Organic Mission is introducing an e-voucher card system as an effective mechanism to distribute assistances under the Direct Benefit Transfer for ensuring that the Scheme’s funds are channeled directly to the beneficiaries. This would be a first of its kind initiative in Sikkim and probably in the Country as well.

Industrial Sector

The main industries like Brewing, distilling, tanning and watchmaking are located in the southern regions of Sikkim.

A small mining industry exists in the state, extracting minerals such as copper, dolomite, talc, graphite, quartzite, coal, zinc and lead. Sikkim has identified Rangpo-Gangtok, Melli-Jorethang, Jorethang-Rishi and Ranipool-Gangtok as industrial corridors with provision for giving land to investors on a lease basis.

The units that are engaged in the manufacturing sector are mainly dealing with pharmaceuticals, chemicals, liquors, foam mattresses, food products, iron rods, etc.

Sikkim has identified agro-based industries, horticulture and floriculture, minor forest-based industries, animal husbandry and dairy products, tourism-related industries, IT including knowledge-based industries, precision oriented high value-low volume products, hydro-power, tea, education and hospitality as thrust sectors.

The Information Technology (IT) Department, Government of Sikkim is in the process of setting up a state-of-the-art IT Park and National Institute of Electronics and Information Technology (NIELIT) at Pakyong.

The state has attracted Foreign Direct Investment (FDI) equity inflows worth US$ 3.93 billion during the period April 2000 to March 2016, according to data released by Department of Industrial Policy and Promotion (DIPP).

Tertiary sector

Industrial sector was followed by the tertiary sector at 23.65% and primary sector at 8.62%. The tertiary sector grew at a CAGR of 15.23% between 2004-05 and 2015-16. The growth has been driven by trade, hotels, real estate, finance, insurance, transport, communications and other services. The primary sector grew at a CAGR of 15.55% between 2004-05 and 2015-16.

Sikkim was the first to promote the concept of eco-tourism, village tourism and home stay tourism in the country. This essential concept promoting man-nature affinity has been recognized as a new model of tourism. Promotion of village tourism, homestay, cultural tourism, trekking tourism, ecotourism, wellness tourism, flori–tourism and adventure tourism has given fillip to the tourism trade in the state where a large of number of people are engaged under different employment opportunities.

Sikkim has been featured and ranked 17th in the New York Times “52 best places to go in 2017”. Similarly, Sikkim has also been featured as the best destination to visit in the world in 2014.

The Year 2017 has been declared as the Year of Sustainable Tourism for Development, an area of development in which Sikkim has already made considerable strides with eco-friendly tourism and the development of innovative initiatives such as Chaar Dham and Tathagatha Tsal. Additionally, Gangtok City has been recognized as the safest tourist destination in the country.

FDI inflows into the state during April 2000 to March 2016 reached to US$ 3.93 billion. A major part of these investments was directed towards power generation There are 27 completed electricity projects in the state. The central government has invested heavily in the hydro electric power generation projects in Sikkim Himagiri Hydro Energy Pvt Ltd. started the initial construction work of their new project namely; 300 MW Panan hydro power project.

Recent Developments

Allocated budget for the industry and minerals sector in Sikkim is estimated to be US$ 9.46 million during 2016-17. Out of this total allocation, villages and small industries would be allocated US$ 5.97 million and large industries would be allocated US$ 2.75 million. The remaining US$ 0.73 million would be allocated to the non-ferrous mining and metallurgical industries of the state.

Sikkim’s geographical and environmental conditions are quite conducive for development of floriculture at a higher altitude. The state is also considered to be the Kingdom of flowers and is an innovator in cultivating Gladiolus.

The state government is also laying emphasis on improving organic farming in the state. During 2015-16, the state government recognized the existing MPCS in the state to promote and enhance organic farming in the state. As a result of these initiatives, the state was certified as the first fully organic state in India, by the Central Ministry of Agriculture and Farmers’ Welfare as well as other recognized agencies of the country.

It is estimated that Sikkim has a peak potential capacity of 8,000 MW and a steady 3,000 MW of hydroelectric power. About 28 hydropower projects are being set up in the state under the public-private partnership (PPP) mode.

Other Key achievements

Nirmal Rajya

Sikkim became the first Nirmal Rajya in the country in 2008 by achieving 100% sanitation coverage and the first State to achieve Open Defecation Free (ODF) status in the beginning of 2016.

Zero Poverty

Sikkim is the State with zero hunger and the first poverty free State in India. This goal has been achieved through consistent policy prescription and a rigorous implementation regime.