Human Development Index

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The recently released Human Development(HDI) Index ranking has left India to think a lot to work on fixing the loopholes to improve its rankings. Though the decline from 0.645 in 2019 to 0.633 in 2021 is marginal for readers like us and many more, it would have started ringing alarm bells in the minds of our think tankers. The fall of HDI is primarily attributed to falling life expectancy which throws a light on how we are living our lives.

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Before discussing the Human Development Index, let us know the history behind it.

The need to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone, delivered the idea of the Human Development Report.

Amartya Sen and Mahbub Ul Haq conceptualized the human-centric approach to development in the first Human Development Report published by the United Nations Development Programme in 1990.

Indices covered under Human Development Report

Indices Covered in Human Development Report are:

● Human Development Index (HDI)

● Inequality-Adjusted HDI

● Planetary Pressures-Adjusted HDI

● Gender Development Index

● Gender Inequality Index

● Multidimensional Poverty Index

Let us first understand the Human Development Index.

source credit: Stpauls

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 having a decent standard of living. The HDI is the geometric mean of normalized indices for each of the three dimensions. It is calculated using four indicators — life expectancy at birth, mean years of schooling, expected years of schooling, and the Gross National Income (GNI) per capita. The concept of human development is more about the expansion of freedom, enhancement of capabilities, providing equal opportunities to all, and ensuring a long, healthy, and prosperous life.

Key Highlights of HDI:

Drop in Life Expectancy: A large contributor to the Human Development Index’s recent decline is a global drop in life expectancy, down from 72.8 years in 2019 to 71.4 years in 2021.

Top Performers:

European states were among the best overall performers, with as many as 8 in the top 10 of the list. These are Switzerland (1, 0.962), Norway (2, 0.961), Iceland (3, 0.959), Denmark (6, 0.948), Sweden (7, 0.947), Ireland (8, 0.945), Germany (9, 0.942) and Netherlands (10, 0.941).

Asian Region: At 73 and with an index value of 0.782, Sri Lanka emerged as the best performer in the Indian subcontinent. The island nation was followed by China (79 and 0.768), Bhutan (127 and 0.666), Bangladesh (129 and 0.661), India, Nepal (143 and 0.602), and Pakistan (161 and 0.544).

Indian Perspective: India’s HDI value stood at 0.633 in 2021, which was lower than the world average of 0.732. In 2020, too, India recorded a decline in its HDI value (0.642) in comparison to the pre-Covid level of 2019 (0.645).

Life expectancy: In 2021, India’s life expectancy at birth was recorded at 67.2 years.

Schooling: Expected years of schooling at 11.9 years, mean years of schooling at 6.7 years.

Gross National Income: The gross national income per capita stood at USD 6,590.

Gender Inequality Index: India has been ranked 122 on the Gender Inequality Index.

India and Human Development Index 2021-2022

The recently published HDI places India in the rank of 132 out of 191 countries, down by 1 rank from the previously published HDI 2020. It has declined for two years in a row – 2020 and 2021 – reversing five years of progress. India’s decline is in line with the global decline. For the first time in 32 years, human development has stalled. A large contributor to the Human Development Index’s recent decline is a global drop in life expectancy. Though India has seen a slip in its rank, there is something to cheer upon. The impact of inequality on human development has lowered. The Intergovernmental organization of the UN lauded India’s investment in health and education, helping it come closer to the global human development average since 1990. India has improved access to clean water, sanitation, and affordable clean energy. Recent policy decisions made by the country have increased access to social protection for vulnerable population groups. 

source credit- THE HINDU

Major Problems of HDI

● First, it implicitly assumes trade-offs between its components. For example, the HDI measures health using life expectancy at birth and measures economic conditions using GDP per capita. So the same HDI score can be achieved with different combinations of the two. As a result, the HDI implies a value of an additional year of life in terms of economic output. This value differs according to a country’s level of GDP per capita. Dig into the HDI and you will find whether it assumes an additional year of life is worth more in the US or Canada, more in Germany or France, and more in Norway or Niger.

● The HDI also struggles with the accuracy and meaningfulness of the underlying data. Average income could be high in a country, but what if most of it goes to a small elite? The HDI does not distinguish between countries with the same GDP per capita, but different levels of income inequality or between countries based on the quality of education. By focusing on averages, the HDI can obscure important differences in human development. Incorporating inaccurate or incomplete data in an index reduces its usefulness.

● Finally, data on different domains may be highly correlated. For example, the GDP per capita and the average level of education in countries are strongly related. Including two highly correlated indicators may provide little additional information compared to just using one.

Conclusion

The Human Development Index as a measure of countries’ development consists of both strengths and weaknesses. On the one hand, this index is a great way of measuring development as it is not solely based on economic growth; it consists of an economic variable as well as life expectancy and educational attainment. But on the other hand, it does not incorporate other dimensions that are also important for a country’s development; as well as it is primarily focused on every country in the world. Keeping aside the criticism of HDI, it’s a reality check for us. Being the largest democracy in the world, we must ensure to improve our ranking.

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