HDI: A Tool for Development

           Human development is a process of enlarging people’s choices as they acquire more capabilities and enjoy more opportunities to use those capabilities. Human development is development of the people through building human capabilities, for the people by improving their lives and by the people through active participation in the processes that shape their lives.

          Human development—by enhancing health, knowledge, skills and awareness—increases human capital and broadens opportunities and choices. The human development framework, thus, emphasizes that the true aim of development is not only to boost incomes, but also to maximize human choices—by enhancing human rights, freedoms, capabilities and opportunities and by enabling people to lead long, healthy and creative lives.

 

What is the Human Development Index?

          The Human Development Index (HDI) assesses human well-being from a broad perspective, going beyond income. It is a composite index focusing on three basic dimensions of human development: to lead a long and healthy life, measured by life expectancy at birth; the ability to acquire knowledge, measured by mean years of schooling and expected years of schooling; and the ability to achieve a decent standard of living, measured by gross national income (GNI) per capita.

          HDI was first introduced by UNDP in 1990. HDI is a statistical tool used to measure a country's overall achievement in social and economic dimensions as based on the health of people, their level of educational attainment and their standard of living. Every year UNDP ranks countries based on the HDI report released in their annual report.

How is the HDI Measured?

          HDI is a simple average of the three indices as mentioned above and is derived by dividing the sum of these three indices by 3.With normalization of the values of the variables that make up the HDI, its value ranges from 0 to 1. The HDI value for a country or a region shows the distance that it has to travel to reach the maximum possible value of 1 and also allows inter-country comparisons. 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.

          Several other variables have gradually been added to the above sets of indicators. Among them, health indicators related to longevity are birth rate, death rate with special reference to infant mortality, nutrition, and life expectancy at birth. Social indicators include literacy particularly female literacy, enrolment of school-going children, drop out ratio, and pupil-teacher ratio. Economic indicators are related to wages, income, and employment. Per Capita Gross Domestic Product, incidences of poverty and employment opportunity are also favoured indicators in this group. They are converted into a composite index to present the holistic picture of the Human Development.

Benefits of HDI  

          Evaluating a country's potential for individual human development provides a supplementary metric for evaluating a country's level of development besides considering standard economic growth statistics, such as gross domestic product (GDP). This index can also be used to examine the various policy choices of nations; if, for example, two countries have approximately the same gross national income (GNI) per capita, then it can help to evaluate why they produce widely disparate human development outcomes.

          The economic performance of a country goes beyond increases in Gross Domestic Product and Per Capita Incomes and encompasses enhancement of opportunities and improvement in social infrastructure such as education, health, housing and housing amenities. Levels of human development is reflected by individual indices such as enrolment and literacy ratios, mortality rates, spread of immunisation, control of major diseases, access to safe drinking water and toilets. All this economic development has to be in an inclusive manner covering the deprived/marginal sections including women.

          With better health and education outcomes and reductions in extreme poverty, 2 billion people have moved out of low human development levels in the last 25 years, the report says. The number of people living in low human development fell from 3 billion in 1990 to slightly more than 1 billion in 2014. Today, people are living longer, more children are going to school and more people have access to clean water and basic sanitation. This progress goes hand in hand with rising incomes, producing the highest standards of living in human history.

          A digital revolution now connects people across societies and countries. Just as important, political developments are enabling more people than ever to live under democratic regimes. All are important facets of human development. A New Social Contract between governments, society, and the private sector is required to ensure that all members of society, especially those working outside the formal sector, have their needs taken into account in policy formulation.

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.

Human Development in India

           India has been placed at 130th position in the 2015 Human Development Index (HDI) among the 188 countries. In 2014 UNDP report country’s rank was 135. Improvement in India’s 2015 HDI from previous year has been attributed to rise in life expectancy and per capita income. HDI ranking of India’s Neighbours: Sri Lanka (73 rank), China (90), Bhutan (132), Bangladesh (142), Nepal (145), Pakistan (147) and Afghanistan (171). BRICS Nations: Russia (50 rank), Brazil (75), China (90), South Africa (116) and India (130).

          As compared to the pre-independence days, India has done well in development in general. As per Human Development Reports (HDRs) published annually by the UNDP, India has consistently improved on human development front and is grouped among the countries with ‘medium human development’.

          In spite of all these developments, India still lags behind all developed and many developing countries as far as human development are concerned. Countries such as Sri Lanka and Indonesia are much better than India with respect to HDI. India’s gender development index (GDI) is also lower than that of Sri Lanka, China and Indonesia.

A few recent HDI facts on India:

·        From 2009 to 2014, the country moved six positions up in the HDI ranking.

·        This year's rank is five spots higher than the UNDP report from 2014, but still the lowest among BRICS nations.

·        India's Gross National Income (GNI) per capita increased by about 338 percent between 1980 and 2014.

·        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.

·        With a score of 0.609 on HDI, India stands well below the average score of 0.630 for countries in the medium human development group. But it is marginally above the South Asian countries’ average score of 0.607.

·        Life expectancy at birth increased to 68 years in 2014 from 67.6 in the previous year and 53.9 in 1980.

·        Mean years of schooling increased by 3.5 years and expected years of schooling increased by 5.3 years.

·        Only 42.1 percent of India’s population aged 25 years and older had at least some secondary education. Government spending on education was 3.8 percent of Gross Domestic Product (GDP) between 2005 and 2014.

·        India’s female literacy rate among youth aged 15-24 years was 74.4 percent as against the male literacy rate of 88.4 percent.

·        India ranks 130 out of 155 countries in the Gender Inequality Index (GII) for 2014. This is way behind Bangladesh and Pakistan that rank 111 and 121 respectively.

·        Merely 12.2 percent of parliamentary seats are held by women in India as against 19.7 in Pakistan and 20 in Bangladesh.

·        India is also beset with a high maternal mortality rate of 190 deaths per 100,000 live births as compared to 170 pregnancy-related deaths per 100,000 births in both Bangladesh and Pakistan.

·        In percentage of women receiving secondary education, Bangladesh at 34 per cent far outperforms India at 27 percent.

·        Unpaid work, predominantly performed by women, is estimated at 39% of GDP.  On labour force participation rate for women, Bangladesh is at 57 percent, India is at 27 percent.

·        In 38 countries, including India, Pakistan, Mexico and Uganda, 80% of women are unbanked.

·        For every 1,00,000 live births, 190 women die from pregnancy related causes.

·        The adolescent birth rate is 32.8 births per 1,000 women of ages 15-19.

·        Gross National Income (GNI) per capita has increased to $5,497 in 2014 from $5,180 in 2013 and $1,255 in 1980.

·        India’s life expectancy at birth increased by 14.1 years between 1980 and 2014.

·        If the women of India were their own country, they would rank 151 out of 188 countries in human development, while India’s men would come in at 120.

·        The average adult man in India gets twice as many years of schooling as the average adult woman.

·        On the Multidimensional Poverty Index which measures deprivation on six indicators, over half of India’s population is multi-dimensionally poor, while a further 18 per cent are close to this line.

·        In India, the proportion of economically active population (15-59 years) has increased from 57.7 per cent to 63.3 per cent during 1991 to 2013.      

·        An estimated 26 million children are born every year in India.

·        Under five, mortality has declined from 126 in 1990 to 49 in 2013.

          If India has to reap benefits of the ‘demographic dividend’ in the years ahead, it is imperative that investments in social infrastructure are made in appropriate measure to achieve the desired educational and health outcomes. India has to evolve a multi-pronged strategy with focus on bridging the gaps in access to social infrastructure through appropriate use of innovative technologies for improving the quality of life.

          As a proportion of the Gross Domestic Product (GDP), India’s expenditure on education has hovered around 3 per cent during 2008-09 to 2014-15. Similarly, the expenditure on health as a proportion of GDP has remained stagnant at less than 2 per cent during the same period. Though the expenditure on social sectors in India has not reflected an increasing trend, an increase in expenditure per-se may not always guarantee appropriate outcomes and achievements.

          The efficiency of expenditure incurred so far can be assessed by the performance of social sectors through various social indicators. An overall assessment of social sector expenditures in terms of achievements shows that wide gaps still exist in educational and health outcomes and there is need for substantial improvement and the need to remove inequalities in India.

          The quality of education determines the quality of human capital and a lot more effort needs to be made to improve the spread of education in India through enrolment and by improving the quality of education in both government and private schools. The Government’s endeavour to build an inclusive society aims to provide education to underprivileged, vulnerable and marginalized people such as SCs, STs, Other Backward Classes (OBC) including Minorities and other Economically Backward Classes through various programmes of education. There is a need to improve the quality of education provided in schools to arrest and reverse the decline in enrolment in government schools and improve the educational outcomes in both public and private schools.

          Providing accessible, affordable and equitable quality health care, especially to the marginalized and vulnerable sections of the population is one of the key objectives of the Government. There are innumerable challenges to the delivery of efficient health services in India, given the paucity of resources and the plethora of requirements in the health sector. Health is also significantly influenced by social and environmental determinants such as age at marriage, nutrition, pollution, access to potable water and hygienic sanitation facilities.

           The rural poverty ratio still remains much higher than the urban. The high rural poverty can be attributed to lower farm incomes due to subsistence agriculture, lack of sustainable livelihoods in rural areas, impact of rise in prices of food products on rural incomes, lack of skills, underemployment and unemployment.

          Except Pakistan, all the other four South Asian countries have reported higher HDI values for females in comparison to India. Apart from the cultural and social factors which prevent women from engaging in economically productive activities outside the household, the lack of education and skills restricts them from participating in economic activity, which leads to their further impoverishment and subjugation in India.

          Gender discrimination in India starts from the womb with sex determination tests and abortion of the female foetuses, discrimination in terms of nutrition offered to the girl child, the length and type of schooling the girl child avails of vis-à-vis her male siblings, inadequate or lack of access to higher education, discrimination in opportunities of employment and wages paid and unequal share in inheritance.

          Society and the Government have relied on the legal route to address each of these discriminations, without matching changes in the social fabric. A social problem can to a large extent be addressed by overall economic improvement, since there would be more for the family and the female members of the household will be less deprived of the basic rights to education, health and other needs. Additionally, the pathways to direct economic empowerment of women require education, skill development and employment of women in productive spheres of activity.

          The development of a country is incomplete without improvement in its social infrastructure. To capitalize and leverage the advantages that India will have on the demographic front with a large segment in the productive age group, social infrastructure requires fresh impetus with focus on efficiency to improve the quality of human capital.

          The Government has introduced the game-changing potential of technology-enabled Direct Benefits Transfers (DBT), namely the JAM (Jan Dhan-Aadhaar-Mobile), which offers exciting possibilities to effectively target public resources to those who need them most. The progress is already evident with overhauling of the subsidy regime and a move to Aadhaar-DBT. It is paving the way for expenditure rationalization and is ensuring the removal of so far undetected fake and duplicate entities from beneficiary lists, resulting in substantial savings of public money. Transparency and accountability of flow of funds through technology intervention will bring in the desired educational and health outcomes for the population and pave the way for a healthy and educated India in the near future.