As of my knowledge cutoff in September 2021, the country in South Asia with the region's overall highest level of social development, based on favorable economic indicators, is often considered Sri Lanka. Sri Lanka has made significant progress in areas such as education, healthcare, life expectancy, gender equality, and the human development index. It has achieved relatively high literacy rates, low infant mortality rates, and a strong healthcare system compared to other countries in the region. However, social development can be measured in various ways, and rankings may change over time, so it's essential to consult up-to-date sources for the most current information.