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Term PaperOf Managerial

Economics

Topic: HDI in three Indian states

Submitted to: Submitted by:Mr. Chander Shekher Nishant Sharma

Dogra Reg. no. 11014046

Roll no. B-67  Section. MBA R1002

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Human Development

IndexThe Human Development Index (HDI) is a composite statistic used to

rank countries by level of "human development" and

separate developed (high development), developing (middle

development), and underdeveloped (low development) countries. The

statistic is composed from data on life expectancy, education and per-

capita GDP (as an indicator of standard of living) collected at the

national level using a formula. The formula defining the HDI is promulgated by the United Nations Development Programme (UNDP)[4] In general, to transform a raw variable, say  x, into a unit-

free index between 0 and 1 (which allows different indices to be added

together), the following formula is used:

Where and are the lowest and highest values the

variable  x can attain, respectively.

The Human Development Index (HDI) then represents the uniformly

weighted sum with ⅓ contributed by each of the following factor 

indices:

Life Expectancy Index

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Education Index

Adult Literacy Index (ALI)

Gross Enrollment Index (GEI)

GDP

Three dimensions in the HDI

The HDI combines three dimensions:

Life expectancy at birth, as an index of population health and

longevity

Knowledge and education, as measured by the adult literacy rate

(with two-thirds weighting) and the combined primary,

secondary, and tertiary gross enrollment ratio (with one-third

weighting)

Standard of living, as indicated by the natural logarithm of gross

domestic product  per capita at purchasing power parity.

HDI IN INDIA

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Map showing the HDI of India by states and union territories

HIGH HDI MEDIUM HDI LOW HDI

  0.900–0.949  0.850–0.899  0.800–0.849  0.750– 

0.799

  0.700–0.749  0.650–0.699  0.600–0.649  0.55

0–0.599

  0.500–0.549  0.450–0.499  0.400– 

0.449

HDI IN MADHYA PRADESH

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0.488

Madhya Pradesh is one of the low ranking states in HDI in India. It is

also one of the most populous state in the country. Its rank in HDI 33

among all the states and union territories of India. It is above only two

states which are Orissa and Bihar.

Trends of HDI in M.P

From the last 4 reports, it has been found that the HDI in M.P has risen.

In 1981 report HDI in M.P was less than 0.250 which increased up to

0.349 in 1991 report. In 2001 report it was 0.385 which is now i.e. 2008

report it is 0.488. This shows the overall increasing trend in the HDI inM.P.

Reasons for low HDI in M.P

As we have discussed above the three dimensions of HDI are :

Life expectancy

Literacy rate

Standard of living

We will discuss them one by one.

Life expectancy:

The life expectancy in M.P is 56.5 years for males and 56.2 years

for females. This gives us a total of 56.4 years average for both

males and females. As an important component of HDI, life

expectancy should be high for high HDI but here it is very low

which is one of the reason for low HDI in M.P.

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Literacy rate:

Literacy is a reasonably good indicator of development in a

society. Spread and diffusion of literacy is generally associated

with essential trait of today's civilization such as modernization,

urbanization, industrialization, communication and commerce.

For the purpose of census, a person aged seven and above, who can

 both read and write with any understanding in any language, is

treated as literate.As per 2001 Census, the overall literacy rate of India is 65.38%.

The male literacy rate is 75.96% and female literacy rate is

54.28%.

 Now moving towards M.P the literacy rate for male is 76.80 and

for female is 50.28. Again the total is low i.e. 64.11. Another thing

to focus here is the low literacy rate of women which is also an

indicator of low HDI.

Standard of living:

The main factors influence the standard of living are poverty,

 physical infrastructure, regional imbalance. Poverty in M.P is very

high because of high population. A large no. of the BPL population

is here. Another this is most of the population is dependent upon

agriculture. The physical infrastructure is poor in spite of the fact

that there are some big cities like Bhopal, Indore etc. this shows

the regional imbalance in the state.

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HDI IN MAHARASHTRA

0.689

Maharashtra is one of the medium ranking state in HDI in India. It is

also one of the most populous state in the country. Its rank in HDI 12

among all the states and union territories of India.

 Trends of HDI in M.P

From the last 4 reports, it has been found that the HDI in Maharashtra

has risen. In 1981 report HDI in Maharashtra was in between 0.350-

0.399 which increased up to 0.480 in 1991 report. In 2001 report it was

0.538 which is now i.e. 2008 report it is 0.689. This shows the overall

increasing trend in the HDI in Maharashtra.

Reasons for low HDI in Maharashtra

 

As we have discussed above the three dimensions of HDI are:

Life expectancy

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Literacy rate

Standard of living

Life expectancy:

The life expectancy in Maharashtra is 64.5 years for males and 67

years for females. This gives us a total of 65.8 years average for 

 both males and females. As an important component of HDI, life

expectancy should be high for high HDI but here it is low which is

one of the reason for medium HDI in Maharashtra.

Literacy rate:

Literacy is a reasonably good indicator of development in asociety. Spread and diffusion of literacy is generally associated

with essential trait of today's civilization such as modernization,

urbanization, industrialization, communication and commerce.

For the purpose of census, a person aged seven and above, who can

 both read and write with any understanding in any language, is

treated as literate.

As per 2001 Census, the overall literacy rate of India is 65.38%.

The male literacy rate is 75.96% and female literacy rate is

54.28%.

Moving towards Maharashtra the literacy rate for male is 86.27

and for female is 67.51. the total is in between low and high i.e.

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77.21. Another thing to focus here is the low literacy rate of 

women which is an indicator of low HDI.

Standard of living: 

The main factors influences the standard of living are poverty,

 physical infrastructure, regional imbalance. Poverty in Maharashtra

is high because of high population. The physical infrastructure

varies from region to region. In the cities like Mumbai (financial

capital of India) and Pune, the infrastructure is world class. People

there are rich and have high standard of living. But in the other regions of the state the infra structure is not so good which shows

regional imbalance.

HDI in Kerala

0.814

 

Kerala is one of the two high ranking state/U.T in HDI in India other  being Chandigarh. It is moderately populous state in the country. Its rank 

in HDI 2 among all the states and union territories of India (1st among

all the states).

 Trends of HDI in Kerala

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From the last 4 reports, it has been found that the HDI in Kerala has

risen. In 1981 report HDI in Kerala was in between 0.500–0.549 which

increased up to 0.580 in 1991 report. In 2001 report it was 0.638 which

is now i.e. 2008 report it is 0.814. This shows the overall increasingtrend in the HDI in Kerala.

Reasons for low HDI in Kerala

As we have discussed above the three dimensions of HDI are :

Life expectancy

Literacy rate

Standard of living

Life expectancy:

The life expectancy in Kerala is 70.6 years for males and 76.1

years for females. This gives us a total of 73.5 years average for 

 both males and females. As an important component of HDI, life

expectancy should be high for high HDI here it is quite high as

compared to other states and most developed countries in the

world, which is one of the reason for high HDI in Kerala.

Literacy rate:

Literacy is a reasonably good indicator of development in a

society. Spread and diffusion of literacy is generally associated

with essential trait of today's civilization such as modernization,

urbanization, industrialization, communication and commerce.

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For the purpose of census, a person aged seven and above, who can

 both read and write with any understanding in any language, is

treated as literate.

As per 2001 Census, the overall literacy rate of India is 65.38%.The male literacy rate is 75.96% and female literacy rate is

54.28%.

Moving towards Kerala the literacy rate for male is 94.20 and for 

female is 87.86. The total is very high i.e. 90.92. Another thing to

focus here is the high literacy rate of women which is an indicator 

of high HDI.

Standard of living:

The main factors influence the standard of living are poverty,

 physical infrastructure, regional imbalance. Poverty in Kerala is

very low. The physical infrastructure don’t varies from region to

region. All over Kerala the physical infrastructure is good. There is

no regional imbalance in any field. Kerala is growing in very balanced way that’s the reason that Kerala’s HDI is high that many

nations in the European Union.

Critical analysis and

conclusion

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We have discussed three states one with low HDI (M.P), one with

medium HDI (Maharashtra) and one with high HDI (Kerala). Now

the analysis for each state.

Madhya Pradesh:

M.P is the low ranking state in HDI. It is because of three factors

I. Low life expectancy

II. Low literacy rate

III. Low standard of living

This can be controlled by:

I. Controlling population

II. Controlling poverty

III. Decreasing regional imbalance

IV. Better medical facilities in the state

V. Better education system

VI. Improvement of physical infra structure.

Maharashtra:

Maharashtra is the medium ranking state in HDI. It is because of 

three factors

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I. Medium life expectancy

II. Low literacy rate

III. Regional imbalance

This can be controlled by:

I. Controlling population

II. Controlling poverty

III. Decreasing regional imbalance

IV. Better medical facilities in the state

V. Better education system

VI. Improvement of physical infra structure all over the

state not some areas.

Kerala :

Kerala is the low ranking state in HDI. It is because of three

factors

I. High life expectancy

II. High literacy rate

III. High standard of living

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