Development indicators : Human development Index
The United Nations Development Programme (UNDP) measuresthe quality of the living standard of
the average people of any country on the basis of a'Human Development Index (HDI). This HDI
measures the well-being of the human capital of a country in terms of the following three variables :
(i) Life expectancy at birth (implying a long and healthy life) ;
(i) The adult literacy rate and the gross enrolment ratio in primary, secondary and tertiary educa
tion (implying the development of knowledge) ; and
(ii) The GDP per capita (indicating a primary requirement for maintaining a decent standard of
living).
At first a dimension index is calculated to measure the deviation of those variables from some
assumed standard values.
Actual value- Minimum value
[Dimension Index (DI) = Maximum value -Minimum value
e-g., if actual literacy rate = 50%,
maximum value = 100% and minimum value = 20%,
05 - 02
then DI= 10-02-=0-375]
08
Ultimately HD0 is calculated as follows :
HDI= (Life expectancy index) + (Education index) + (Income index).
New Method of calculating HDI : Since 2010, the UNDP has adopted a new method for
calculating HDI on the basis of the following variables :
(a) Life expectancy at birth,
(b) Mean years of schooling,
(c) Expected years of schooling, and
(d) Per capita income.
As we have already shown, adimension index (DI) is first calculated for each of these variables
for
cach country. Thern the HDI iscalculated as the geometricmean of (a) life index (Iitc), (b) Education
index (Education) and (c) income index (Itncome) as shown below:
HDI = x IEducation X IIcome
Here, the education index is calculated on the basis of both mean years of schooling and expected
because the old
years of schooling.This new formula seems to be better than the old formula. This is income
formula of HDI actually indicated the arithmetic mean of life index, education index and
index. In that case, even if a country scores "0 in any one index, HDI would show apositive value.
But in case of the new formula, if, say, education index is 'zero' for any country, then its HDIwould be
zero.
considered for
As per the Humarn Development Report (2010), the following ranges of values are
determining the Dimension Index of different variables :
Maximun,válue Mininu1n value
Variables 83-2 20
1. Average Life Expectancy at Birth (Years)
13-2 0
2. Mean Years of Schooling
3. Expected Years of Schooling 20-6
4. Combined Education Index 0-951
1,08,211 163
5. Per Capita Income ($)
Now we can give an example (of China) of calculating the HDI:
Average Life Expectancy at Birth (Years) of China : 73-5 Years
Mean Years of Schooling in China : 7-5 Years
Expected Years of Schooling in China : 114 Years
Per Capita Income ($) of China :7,263
Here, Life Index= 73-5-20 =0-847
83-2-20
7-5-0 = 0-568
Mean Years of Schooling Index= 13-2-20
Expected Years of Schooling Index= 114-0 - 0-553
20-6-0
VO-568 x0-553-0 =0-589
Education Index =
0-951-0
Per Capita Income Index log(7,263) - log(163) =0-584
log(1,08,211) - log(163)
..HDI = 0-847 x 0-589 x 0-584 = 0:663
As the HDIvalue approaches towards '1', it implies higher 'Human Development'; and as it approaches
towards "0, it signifies lower levelof human development. Now, we can show the scores of India and
her neighbouring countries with regard to HDI values over the last few decades and the present
ranking of these developing nations among the 169 countries of the world (from which relevant
information could be collected by the UNDP).
12.3.1. HDI -A Comparisonacross nations
into four
The UNDP report on Human Development (2018) divides all the countries of the world
categories on the basis of HDI :
whose HDl score is
(a) Countries with very high human development: These are the countries
more than 0-800 :
HDI score lies between
(b) Countrics with high human development:These are the countries whose
0-700-0-799;
countries whose HDIscore lies
(c) Countries with medium human development: These are the
between 0-550 -0-699 ;
whose HDI score lies below
(d) Countries with low human development:These are the countries
0-550.
countries considered in that report, 112
The Human Development Report (2018) shows that out of 189
(say, Norway,
countries were considered as countries with very high and high human development
as countries with medium
Sweden, Australia, Canada, Sri Lanka, China, Brazil, etc.), 39 countries
etc.), and 38countries as low
human development (say, India,Bangladesh, Pakistan, Kenya, Egypt,Ethiopia, etc.). Further, these
human development countries (say, Zimbabwe, Nigeria, Rwanda,
countries are ranked according to their HDI score.
Classification:The World Barnk classifies
Differences in Income-based Classification andHDI-based
income-based classification
different countries of the world according to their per capita income. That
the middle income countries
considers that the high-income countries of the world are more developed,
or underdeveloped.
are developing and the low-income countries are less developed
the countries on the basis of HDI
However, the Human Development Report of the UNDP classifies
also countries with very high or
score. It is generally observed that the high-income countries are terms of
may attain 25th rank in
high human development. But there are exceptions. Thus, a countryof HDI score. It implies that this
terms
per capita incone, but its rank may be as low as 40th in
development indicators though
country has not yet attained sufficient development in terms of human between these development
it has attained high per capita income. In such cases, the deviations
indicators can be ascertained in the following ways :
Income-based rank - HDI-based rank or, (25-40 )= (-) 15
Table-4 indicates that in countries like India, Pakistan, Iraq, Turkey, etc. the income-based ranking has
the
been higher than the HDI-based ranking causing a negative rank difference as noted above. On
positive.
other hand, if any country scores better in terms of HDI then this rank difference becomes
etc.
This is observed in case of countries like Norway, Switzerland, Australia,
Table-2
Classification of different Countries on the basis of Per capita Income & HDI Score in 2017
Country Per Capita HD-based HDI Score Income-based
Income-based Rank Rank - HDI-based
iRank rank
1. Very High Human Development :
Norway 6 1 0.953 (+)5
Switzerland 10 2 0-944 (+)8
Australia 21 3 0-939 (+)18
2. High Human Development :
Iran 63 60 0.798 (+)3
Turkey 50 64 0-791 (-)14
Sri Lanka 90 76 0-770 (+)14
Brazil 81 79 0-759 (+)2
China 77 86 0-752 (-9
3. Medium Humnan Development :
Philippines 106 113 0-699 ()7
Egypt 100 115 0-696 (-15
Iraq 67 120 0-685 (-53
India 125 130 0-640 (-)5
Bangladesh 145 136 0-608 (+)9
Kenya 158 142 0-590 (+)16
Pakistan 136 150 0-562 (-14
3. Low IHuman Development :
Zimbabwe 173 156 0-535 (+)17
Nigeria 137 157 0-532 (-)20
Rwanda 169 158 0-524 (+)11
Ethiopia 172 173 0-463 (-1
Source :Hunan Development Report (2018), UNDP;
(Note : Here, (+) sign implies better ranking in HDI and (-) signinplies poorer ranking in HDI
score].
Table-3
Trend of Human Development in India and her neighbouring nations
HDIValue*
Year India China Pakistan SriLanka
0.320 0-368 0-311 0-513
1980
0-389 0.460 0-359 0-558
1990
0-518 0-389 0-584
1995 0.415
0.440 0-567 0.416 NA
2000
0-482 0-616 0.468 0-635
2005
0-519 0-663 0-490 0-658
2010
0-752 0-562 0-770
2017 0-640
86 150 76
HDI Rarnk in 2017 130
Source : Human Development Report (2018), UNDP, (* Based on the new HDIformula)
This table (Table-3) shows that India along with her neighbouring countries has experienced a gradual
improvement in human developmernt during 1980-2017. But Indiaís rank is 130th among the 189
statistical figures
nations, while Chinaand Sri Lanka secured higher ranks. Let us have a look at
and life expectancy
concerning mean years of schooling, expected years of schooling, per capita income
at birth in India and her neighbouring countries.
Table-4
neighbouring nations during 2010-17
Factors Influencing Human Development in India & her
Pakistan Sri lanka
Variable India China
20102017 2010 2017. 2010 2017
2010 2017
(a) Mean years of 6.4 7-5 7-8 4.9 5-2 8-2 10-9
schooling 4.4
(b) Expected years of 11.4 13-8 6-8 8-6 12-0 13-9
10-3 12:3
schooling
(c) Life expectancy at 76-4 67-2 66-6 74-4 75-5
64-4 68-8 73-5
birth (Years)
(d) Per capita income 4,886 11,326
3,337 6,353 7,258 15,270 2,678 5,311
(PPP $)
UNDP
Source : Human Development Report (2011,2018),
China and Sri Lanka than that of India
This table (Table-4) clearly indicates the superior position of
in respect of human development. which performed so well in terms of human
It is important to note that the economy of Sri Lanka Economists have pointed out the
development has been facing a serious economic crisis since 2022. undertaking some
growing dependenceof SriLanka on foreign debt (particularly from China)some for
large infrastructuralprojects, its strict imnport policy leading to a shortage of important inputs
the principal reasons behind
and falling revenue from its tourism service during COVID pandemic are basic needs of the common
her growing debt burden. The government of Sri Lanka failed to meet the of fossil
people. The government does not have enough fund even for meeting the import demands
fuel.Thus, it becomes clear that faulty economic policy can be disastrousfor the economic well-being
of the common people.
