Human Development and HDI

“Human development is a process of enlarging the range of people’s choices, increasing their

opportunities for education, health care, income and empowerment and covering the full range of

human choices from a sound physical environment to economic, social and political freedom.” Thus,

enlarging the range of people’s choices is the most significant aspect of human development.

People’s choices may involve a host of other issues, but, living a long and healthy life, to be educated

and have access to resources needed for a decent standard of living including political freedom,

guaranteed human rights and personal self-respect, etc. are considered some of the non-negotiable

aspects of the human development.

Human development has two dimensions: acquiring human capabilities and the use people made of

these acquired capabilities for productive, leisure and other purposes. The benefits of human

development go far beyond the expansion of income and wealth accumulation because people

constitute the very essence of human development. 

A major difference between economic growth and human development is that the former focuses on

the enlargement of one option (income or product), while the focus of the latter is on enlarging all

human options. In other words, education, health, clean environment and material well being do not

necessarily depend on income. Thus, the options available for improving people’s lives are influenced

by the quality of economic growth in its wider sense, and the impact is by no means confined to

quantitative aspects of such growth. 

A distinction can also be drawn between human resources development and human development.

The former focuses on the production aspect and as such deals with people as a factor of production

like material capital and natural resources. Thus, the end goal of investment in human capital, in

terms of health, education, nutrition and training, is to boost production and generate additional

income.

Components of Human Development

The UNDP defines the components of human development as involving four basic elements:  

Equality: Defined as equal access to opportunities. This concept implies the existence of competitive

markets and competitors with equal access to productive assets and knowledge.  

Productivity: Human development does not run counter to the theory of economic growth. It is

rather dependent on the contention that economic growth and improved productivity can be

achieved through development of human resources and creation of a conducive environment where

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people can make use of their capabilities optimally. In the same vein, adequate focus is placed on the

quality aspect of growth, rather than exclusive emphasis on its quantitative aspect. 

 Sustainability: To ensure sustainability of choices in order to accommodate the needs of future

generations. 

Empowerment: Empowerment and participation imply provision of an adequate social environment

in which people participate for achievement of a better life. 

Thus, the concept of human development, in line with its focus on enabling people to enjoy a better

life as the ultimate goal of human endeavor, highlights that this goal cannot be achieved solely

through improvements in income or material well-being. 

The concept further emphasizes the inter-dependence between the key components of human well-

being: without adequate income, many health and education services may not be accessible; and

without a good education rewarding jobs and income opportunities may not be available to an

individual. 

Therefore, these components of human development must be treated within a comprehensive

framework. And while their evaluation by people may change over time and differ between countries

and even groups within the same country, the basic components of human development - income,

education and health - are nevertheless considered essential at all levels of development.

Furthermore, if these three essential choices or ingredients were not available, other opportunities,

which are also important for human well-being, would remain inaccessible. The expansion of choices

in the areas of education, income and health not only provides necessary conditions for a better

material life, but also paves the way for the creation of a suitable environment for people’s spiritual

advancement and creativity.

 The broad scope of the prerequisites for human development as outlined above raises an important

issue as to their applicability to individual countries. Their policy implications are certain to vary from

one country to another as what constitutes appropriate some of the human development policy is

likely to be unique to each individual country and will be influenced by its religious, cultural, social,

political and economic values.

Human Development Reports

Global Human Development Reports (HDR), which UNDP publishes annually since 1990,

constitute the first comprehensive and systematic attempt to measure achievements in development

from a human perspective, expressed in terms of numerical indicators that permit inter-country and

inter-temporal comparisons. No less significant have been the reports’ contribution to enriching the

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concept and in giving it a worldwide dissemination. They are a reliable source containing an

alternative perspective on critical issues for human development worldwide. 

Featuring the Human Development Index, every report presents agenda-setting data and analysis and

calls international attentions to issues and policy options that put people at the center of strategies to

meet the challenges of development today - economic, social, political, and cultural.

Regional Human Development Reports (AHDR) is highly encouraged by UNDP, whereby each

Region produces a report that focuses on relevant and pressing issues. They are an instrument for

measuring human progress and triggering action for change. 

They serve to promote regional partnerships for influencing change, and address region-specific

human development approaches to human rights, poverty, education, economic reform, HIV/AIDS,

and globalization. 

The UNDP Regional Bureau for Arab States (UNDP/RBAS) has started since 2002 producing an annual

regional report.

National Human Development Reports (NHDR) provide a tool for national policy debate placing

human development at the forefront of the national political agenda. They are A tool for policy

analysis reflecting people's priorities, strengthening national capacities, engaging national partners,

identifying inequities and measuring progress. 

The Human Development Index (HDI) (Rank 136 Medium)

In 1990 the UNDP introduced a new concept in the indication of development, the Human

Development Index (HDI), with the objective of measuring human progress and quality of life at the

global level. The initial report made so much of an impact on public and academic opinion that a few

years later, the international community adopted the HDI as “the” indicator to measure a countries

development progress. 

The HDI constitutes the first comprehensive attempt to measure achievements in development from a

human perspective, expressed in terms of numerical indicators that permit inter-country and inter-

temporal comparisons. The HDI combines in one composite index, indicators of health, education and

income and intends to reflect achievements in the most basic human capabilities: living a long life,

being knowledgeable and enjoying a decent standard of living.

 The index also provides an initial working tool that could be further developed and refined, and that

could guide country efforts to establish relevant databases. Additional indexes based on the HDI have

been developed to examine, in more depth, specific issues, such as the Gender-related Development

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Index (GDI), the Gender-Empowerment Measure (GEM) and the Human Poverty Index (HPI). Some

countries have also developed complementary indexes to help policy-makers deal with specific

national issues.

Dimensions of HDI

Health: Life expectancy at birth (India)

Total population: 67.14 years 

Male: 66.08 years  Female: 68.33 years (2012 est.)

Definition: This entry contains the average number of years to be lived by a group of people born in

the same year, if mortality at each age remains constant in the future. The entry includes  total

population as well as the male and female components. Life expectancy at birth is also a measure of

overall quality of life in a country and summarizes the mortality at all ages. It can also be thought of as

indicating the potential return on investment in human capital and is necessary for the calculation of

various actuarial measures.

Source: CIA (Central Intelligence Agency) World Factbook - Unless otherwise noted, information

in this page is accurate as of February 21, 2013

Education

Mean years of schooling (of adults) (years)

Average number of years of education received by people ages 25 and older, converted from

education attainment levels using official durations of each level.

Source: HDRO updates of Barro and Lee (2011) estimates based on UNESCO Institute for Statistics

data on education attainment (2012) and Barro and Lee (2010) methodology.

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Measures 2011 2012

Very High HD 11.5 11.5

High HD 8.9 8.8

Medium HD 6.3 6.3

Low HD 4.2 4.2

For India (HDI Rank 136)4.4 4.4 That means upper lower HD or Lower medium HD

Expected Years of Schooling (of children) (years)

Number of years of schooling that a child of school entrance age can expect to receive if prevailing

patterns of age-specific enrolment rates persist throughout the child’s life.

Source: UNESCO Institute for Statistics (2012). Data Centre. Accessed 15 October, 2012 http://stats.uis.unesco.org

Measures 2011 2012

Very High HD 16.3 16.3

High HD 13.9 13.9

Medium HD 11.4 11.4

Low HD 8.5 8.5

For India (HDI Rank 136)10.7 10.7 That means upper lower HD or Lower medium HD

Income: GNI per capita

The GNI per capita is the dollar value of a country’s final income in a year, divided by its population.

It reflects the average income of a country’s citizens.

Knowing a country’s GNI per capita is a good first step toward understanding the country’s economic

strengths and needs, as well as the general standard of living enjoyed by the average citizen. A

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country’s GNI per capita tends to be closely linked with other indicators that measure the social,

economic, and environmental well-being of the country and its people. For example, generally people

living in countries with higher GNI per capita tend to have longer life expectancies, higher literacy

rates, better access to safe water, and lower infant mortality rates.

The latest value for GNI per capita, Atlas method (current US$) in India was 1,530 as of 2012.

Definition: GNI per capita (formerly GNP per capita) is the gross national income, converted to U.S.

dollars using the World Bank Atlas method, divided by the midyear population. GNI is the sum of

value added by all resident producers plus any product taxes (less subsidies) not included in the

valuation of output plus net receipts of primary income (compensation of employees and property

income) from abroad. GNI, calculated in national currency, is usually converted to U.S. dollars at

official exchange rates for comparisons across economies, although an alternative rate is used when

the official exchange rate is judged to diverge by an exceptionally large margin from the rate actually

applied in international transactions. To smooth fluctuations in prices and exchange rates, a special

Atlas method of conversion is used by the World Bank. This applies a conversion factor that averages

the exchange rate for a given year and the two preceding years, adjusted for differences in rates of

inflation between the country, and through 2000, the G-5 countries (France, Germany, Japan, the

United Kingdom, and the United States). From 2001, these countries include the Euro area, Japan, the

United Kingdom, and the United States.

Source: World Bank national accounts data, and OECD National Accounts data files.

Rank Economy GNI per capita

(US$)

Year Income Group

124 India 1,530 2012 Lower middle income

141 India 1,420 2011 Lower middle income

India’s HDI

The contest between India’s GDP and the Human Development Index (HDI) as the most appropriate

measure of the performance of a country has been longstanding. While GDP is a measure of income,

HDI is one that indicates the wellbeing of citizens. The HDI is a composite statistic used to rank

countries by degree of ‘human development,’ which is considered synonymous with ‘standard of

living’ and/or ‘quality of life.’ The first Human Development Report introduced a new way of

measuring development by combining indicators of life expectancy, educational attainment and

income into a composite human development index, the HDI. The breakthrough for the HDI was the

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creation of a single statistic which was to serve as a frame of reference for both social and economic

development. The HDI sets a minimum and a maximum for each dimension, called goalposts, and then

shows where each country stands in relation to these goalposts, expressed as a value between 0 and

1.

 Current scenario of India

 While it has shown considerable potential in its performance on economic indicators such as GDP,

India has yet to improve its position on the HDI to realize the potential that GDP has to offer. The

country remains at the bottom of the ladder in terms of HDI. According to UN India’s  Human

Development Report, India is in the medium human development category and is ranked 136 among

187 countries.

India’s HDI rank in 2011=136 and in 2012=again 136. Thus rank hasn’t improved but the HDI index

number has improved. Although Index value has improved (from 0.551 to 0.554).

Factors behind India’s low FDI

Health

The liberalization and globalization policy has been biased towards economic growth rather than

social development. Allocations for public healthcare spending have increased marginally from 1

percent to just about 1.4 percent of the GDP in a period of six months till Feb 2010. Consequently, a

large proportion of health expenditure - about 4 per cent of the GDP - is left to be borne out of private

income, which results in inequity.

Education

India has, for long, been cautious in its approach towards spending on education. The Right to

Education Bill was in danger of being shelved on the grounds that it was too expensive for the

government. India's low scores on human development have much to do with the absence of safety

nets for the urban poor.

The country still accounts for around 30 percent of the world’s illiterate population and 70 percent of

these people are women.

 Urban poverty

There is no urban equivalent of the National Rural Health Mission or the National Rural Employment

Guarantee Scheme.

 Environmental performance

The country ranks 125 among 132 countries on Yale University's Environmental Performance Index,

behind the likes of Pakistan, Moldova and Kyrgyzstan.

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 Next Steps

Education

The education policy of successive governments should be more inclusive in nature, with equal

emphasis on enrollment as well as improvement in the overall functioning and quality of schools.

Governments need to strengthen the outreach of their education reforms while increasing the

availability of information to remote corners of the country.

 Health

The Indian Government needs to devise effective policies in the public health sector with cohesive

involvement from all relevant stakeholders. These include hospitals, pharmaceutical companies,

health educators, health professionals, and logistics companies engaged in health-related service

delivery. At the same time, the government needs to lay sufficient emphasis on wider determinants of

healthcare such as food and livelihood security, drinking water, women’s literacy, nutrition and

sanitation.

The public health policy should not only focus on the prevention of diseases by providing clean water

and sanitation. It should also stress on fighting disease by administering antibiotics, which can be

facilitated through the appropriate training of public health specialists and the development of health

facilities at all levels.

 Employment and skills

To address the issue of growing unemployment among the country’s youth, the government has to

focus on bridging the gap in terms of labor and income, improve working conditions, and introduce

policies that protect the rights of the labour class.

The substantive unorganized sector should be strengthened and sustained with investment for

consistent growth.

 

Social protection

Migrant workers, women and children, the elderly, physically challenged individuals and tribal

communities are among the marginalized sections of society. They need the allegiance of government

reforms, laws, rights and policies for increased human development. Thus, it is imperative that their

social protection needs are identified, addressed and regularly monitored.

The effective participation of the people is a prerequisite to facilitating accountability in social

transfers. Therefore, the need of the hour is to tackle issues of economic and social equity, gender

bias, and illiteracy at the grassroots level.

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In addition, the Indian Government should design a framework to monitor and evaluate the

performance of reform programs and conduct impact assessments of these programs to facilitate the

efficient utilization of tax payers’ money.

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