Human Development Index at a glance

Tushar Panchal Dr N R Parmar

Assistant Professor Director
Gujarat Tech University CVM Inst of HRD
tusharhrm@gmail.com cvmhrd@gmail.com
+91 8866157099 +91 02692 232696

Introduction
The Human Development Index (HDI) is a composite statistic of life expectancy, education,
and per capita income indicators, which are used to rank countries into four tiers of human
development.
The HDI was created to emphasize that people and their capabilities should be the ultimate
criteria for assessing the development of a country, not economic growth alone. The HDI can
also be used to question national policy choices, asking how two countries with the same
level of GNI per capita can end up with different human development outcomes. These
contrasts can stimulate debate about government policy priorities.

The Human Development Index (HDI) is a summary measure of average achievement in key
dimensions of human development: a long and healthy life, being knowledgeable and have a
decent standard of living. The HDI is the geometric mean of normalized indices for each of
the three dimensions.

The health dimension is assessed by life expectancy at birth, the education dimension is
measured by mean of years of schooling for adults aged 25 years and more and expected
years of schooling for children of school entering age. The standard of living dimension is
measured by gross national income per capita. The HDI uses the logarithm of income, to
reflect the diminishing importance of income with increasing GNI. The scores for the three
HDI dimension indices are then aggregated into a composite index using geometric mean.
Refer to Technical notes for more details.
The HDI simplifies and captures only part of what human development entails. It does not
reflect on inequalities, poverty, human security, empowerment, etc. The HDRO offers the
other composite indices as broader proxy on some of the key issues of human development,
inequality, gender disparity and human poverty.

History of HDI
The Human Development Index (HDI) is a composite statistic of life expectancy, education,
and per capita income indicators, which are used to rank countries into four tiers of human
development. A country scores higher HDI when the lifespan is higher, the education level is
higher, the GDP per capita is higher, the fertility rate is lower, and the inflation rate is lower.
The HDI was developed by the Pakistani economist Mahbub ul Haq working alongside
Indian economist Amartya Sen, often framed in terms of whether people are able to "be" and
"do" desirable things in their life, and was published by the United Nations Development
Programme.

How is the HDI Measured?

The HDI is essentially a summary measurement of basic achievement levels in fundamental
dimensions of human development. The computed HDI of a country is a geometric mean of
normalized indexes of each of the life aspects that are examined knowledge and
understanding, a long and healthy life, and an acceptable standard of living.

The health aspect of the HDI is measured by the life expectancy, as calculated at time of
birth, in each country. Education is measured on two levels: the mean years of schooling for
residents of a country and the expected years of schooling that a child has at the average age
for starting school. The metric chosen to represent standard of living is GNI per capita based
on purchasing power parity (PPP), a common metric used to reflect average income.
Limitations
The HDI is a simplification and an admittedly limited evaluation of human development. The
HDI does not specifically reflect quality of life factors, such as empowerment movements or
overall feelings of security. In recognition of these facts, the Human Development Report
Office (HDRO) provides additional composite indices to evaluate other life aspects, including
inequality issues such as gender disparity or racial inequality. Examination and evaluation of
a country's HDI is best done in concert with examining these and other factors, such as the
country's rate of economic growth, expansion of employment opportunities and the success of
initiatives undertaken to improve the overall quality of life within a country.

Current state of HDI India

India continued to rank low in the Human Development Index (HDI), but climbed five
notches to the 130th rank in the latest UNDP report on account of rise in life expectancy and
per capita income.
India ranked 130 among 188 countries in 2014 in Human Development Report 2015 released
on Monday by the United Nations Development Programme (UNDP). The country's rank was
135 according to the 2014 report.
"India's HDI value for 2014 is 0.609, which puts the country in the medium human
development category, positioning it at 130 out of 188 countries and territories.
"Between 1980 and 2014, India's HDI value increased from 0.362 to 0.609, an increase of
68.1 per cent or an average annual increase of about 1.54 per cent," a note circulated with the
report said.
Norway topped followed by Australia and Switzerland. As per the report, the HDI rank of
Bangladesh and Pakistan was 142 and 147, respectively. Among the BRICS nations, India
was ranked lowest.
The HDI is an average measure of basic human development achievements in a country. It is
a summary measure for assessing long-term progress in three basic dimensions of human
development a long and healthy life, access to knowledge and a decent standard of living.
Life expectancy at birth increased to 68 years in 2014 from 67.6 in the previous year and 53.9
in 1980.
Gross National Income (GNI) per capita was $5,497 in 2014 up from $5,180 in 2013 and
$1,255 in 1980. India's GNI per capita increased by about 338 per cent between 1980 and
2014.
However as per the report, the expected years of schooling is stagnant at 11.7 since 2011.
Also, mean years of schooling at 5.4 has not changed since 2010.
Between 1980 and 2014, India's life expectancy at birth increased by 14.1 years, mean years
of schooling increased by 3.5 years and expected years of schooling increased by 5.3 years.
According to the report, India's 2014 HDI of 0.609 is below the average of 0.630 for
countries in the medium human development group and above the average of 0.607 for
countries in South Asia.
From South Asia, countries which are close to India in 2014 HDI rank and to some extent in
population size are Bangladesh and Pakistan, which have HDIs ranked 142 and 147,
respectively.
The report further said India's HDI for 2014 is 0.609. However, when the HDI for 2014 value
is discounted for inequality, the HDI falls to 0.435, a loss of 28.6 per cent due to inequality in
the distribution of the HDI dimension indices.

Reference:
http://hdr.undp.org/en/content/human-development-index-hdi
http://www.investopedia.com/terms/h/human-development-index-hdi.asp
http://timesofindia.indiatimes.com/india/India-up-5-spots-ranks-130th-in-Human-
Development-Index-UNDP/articleshow/50170343.cms