This December, we commemorated the 30th anniversary of the HDI.
Out of 189 countries, India has ranked 131 on the Human Development Index 2020 prepared by the United Nations Development Programme (UNDP). With an HDI value of 0.645, the country fell in the medium human development category.
People are the real wealth of a nation. The basic objective of development should be to create an enabling environment for people to live long, healthy and creative lives. This may appear to be a simple truth.
Background
- The human quest for knowledge has been sustained by an unspoken assumption: that the answers to life’s questions can be found if we try hard enough.
- And when we do, we will be able to reorganize society in rational ways, free from superstition, dogma, and oppression.
- Yet, the ideas that liberate one generation become the shackles of the next. It is the relentless march of ideas that add to the beauty, sense and the meaning of life.
- One such simple, but the transformational idea was the Human Development Index (HDI) as a measure of progress.
The Human Development Index
- The HDI combines indicators of life expectancy, education or access to knowledge and income or standard of living, and captures the level and changes to the quality of life.
- The index initially launched as an alternative measure to the gross domestic product, is the making of two acclaimed economists from Pakistan and India, namely Mahbub ul Haq and Amartya Sen.
- It stresses the centrality of human development in the growth process and was first rolled out by the United Nations Development Programme in 1990.
Dimensions of the Human Development Index
The idea that progress should be conceived as a process of enlarging people’s choices and enhancing their capabilities is the central premise of the HDI.
Since its launch, the HDI has been an important marker of attempts to broaden measures of progress. The HDI considers three main dimensions to evaluate the development of a country:
1. Long and healthy life
The long and healthy life dimension is measured by life expectancy at birth. The life expectancy at birth is a statistical measure that an average individual is expected to live based on certain demographic factors such as the year of birth and current age.
2. Education
This is a second dimension in the HDI. The indicators of education are the expected years of schooling and the mean years of schooling. According to the UN, the average maximum years of schooling is 18 years, while the mean maximum years of schooling is 15 years.
3. Standard of living
The standard of living is usually measured by the gross national income (GNI) per capita. The GNI indicates the total domestic and foreign output created by the residents of a certain country.
Major highlights of the 2020 Report
- Out of 189 countries, Norway, Ireland and Switzerland are in the top three rungs.
- The size of economic resources, as usual, has been a key factor affecting human development; the distribution and allocation of these resources also play a major role in determining the level of human development.
- The 2019 HDI ranks India with a per capita income of $6,681 in the 131st position, a notch lower than its 130th rank in 2018, which puts it in the medium human development category.
What India has achieved over the years?
- The report stated that since 1990, the HDI value of India has increased to 0.645 from 0.429, registering an increase of over 50%.
- During the same period, the life expectancy at birth in India rose by nearly 12 years, while mean years of schooling witnessed an increase of 3.5 years.
- During this while, the expected years of schooling also rose by 4.5 years.
- Moreover, during this period, GNI per capita of India also increased, registering a rise of nearly 274%.
India has gained but still lags far behind
- However, trends for the last three decades indicate that India has raised its HDI score at an annual average rate of 1.42%, almost a third higher than the 1% growth clocked by developing countries as a whole.
- But India’s gains still lag behind many other Asian nations like China (1.47%), Bangladesh (1.64%), Cambodia (1.66%) and Myanmar (1.86%).
- And a closer look at the other composite indices from the family of development indices shows that India falters badly in many areas, especially on the gender and income distribution fronts.
All of which isn’t surprising given that it was in 1991 that India initiated economic liberalisation. The HDI improvement over this period essentially captures the benefits that accrued to Indian society from that historic decision.
- Decline in Infant Mortality Rate & Maternal Mortality Rate.
- Increased Immunization.
- Better housing, sanitation and education.
- Smaller families, growing income.
- Improved public healthcare infrastructure, particularly, preventive healthcare.
Very often has been insisted on the inadequacy of income as the sole indicator of welfare and augmented, that measuring income is losing its utility, becoming more puzzling and contributes only insignificantly to human development.
Limitations of HDI
HDR has been always disputable and has caught the public-eye, whenever it was published. It has many reasons.
One of them is that the concept of human development is much deeper and richer than what can be caught in any index or set of indicators. Another argument is that its concept has not changed since 1990 when it was also defined in the first.
(1) An incomplete indicator
- Human development is incomplete without human freedom and that while the need for qualities judgement is clear; there is no simple quantitative measure available yet to capture the many aspects of human freedom.
- HDI also does not specifically reflect quality of life factors, such as empowerment movements or overall feelings of security or happiness.
(2) Limited idea of development
- The HDI is not reflecting the human development idea accurately.
- It is an index restricted to the socio-economic sphere of life; the political and civil spheres are in the most part kept separate.
- Hence there is a sub-estimation of inequality among countries, which means that this dimension is not being taken into consideration appropriately.
(3) A vague concept
- Concerning data quality and the exact construction of the index HDI is conceptually weak and empirically unsound.
- This strong critic comes from the idea that both components of HDI are problematic. The GNP in developing countries suffers from incomplete coverage, measurement errors and biases.
- The definition and measurement of literacy are different among countries and also, this data has not been available since 1970 in a significant number of countries.
(4) Data quality issues
- The HDI, as a combination of only four relatively simple indicators, doesn’t only raise a questions what other indicators should be included, but also how to ensure quality and comparable input data.
- It is logical that the UNDP try to collect their data from international organizations concentrating in collecting data in specific fields.
- Quality and trustworthiness of those data is disputable, especially when we get the information from UN non-democratic members, as for example Cuba or China.
(5) A tool for mere comparison
- The concept of HDI was set up mainly for relative comparison of countries in one particular time.
- HDI is much better when distinguishing between countries with low and middle human development, instead of countries at the top of the ranking.
- Therefore, the original notion was not to set up an absolute ranking, but let’s quite free hands in comparison of the results.
(6) Development has to be greener
- The human development approach has not adequately incorporated environmental conditions which may threaten long-term achievements on human development. The most pervasive failure was on environmental sustainability.
- However, for the first time in 2020, the UNDP introduced a new metric to reflect the impact caused by each country’s per-capita carbon emissions and its material footprint.
- This is Planetary Pressures-adjusted HDI or PHDI. It measured the amount of fossil fuels, metals and other resources used to make the goods and services it consumes.
(7) Wealth can never equate welfare
- Higher national wealth does not indicate welfare. GNI may not necessarily increase economic welfare; it depends on how it is spent.
- For example, if a country spends more on military spending – this is reflected in higher GNI, but welfare could actually be lower.
Significance of HDI
Social measures of development ought to be factored in to calculate a country’s overall level of development. Some believe that additional factors such as human rights and happiness are very important. But still, HDI is a relevant factor.
- It is one of the few multidimensional indices as it includes indicators such as literacy rate, enrollment ratio, life expectancy rate, infant mortality rate, etc.
- It acts as a true yardstick to measure development in real sense.
- Unlike per capital income, which only indicates that a rise in the per capital income implies economic development; HDI considers many other vital social indicators and helps in measuring a nation’s well-being.
- It helps as a differentiating factor to distinguish and classify different nations on the basis of their HDI ranks.
Lessons for India
- Global experiences offer India a way out of this predicament.
- Studies show that high growth accompanied by more effective income distribution and female empowerment strategies can help enhance human development, even with moderate social expenditures.
- Clearly, India’s HDI scores can also be substantially enhanced if a politically committed government rolls out inclusive policies that strengthen public health, education and nutrition, and end gender discrimination to usher in a more egalitarian order.
Way forward: It lies in Sustainable Development
- Both sustainable development and poverty eradication are both long-term and urgent endeavours, requiring not only the gradual and substantial redirection of country policies but a rapid response to pressing problems.
- Ideally, sustainable development could provide an overarching framework within which all sub-goals (eg poverty eradication, social equality, ecosystem maintenance, climate compatibility) are framed.
- It is not a subset of development; it is development (in a modern world of resource limits).
- Environmental issues are not one factor among many but the meta-context within which poverty and other goals are sought.
- Investing more in public research could lead to technological solutions to poverty and sustainability problems becoming more rapidly and openly available.
Developed nations owe it to all
- To engage the broad coalition of support required to maintain high levels of development co-operation, rich countries will have to appeal to mutual benefit, not just charity.
- There is a serious danger that poor countries may come under pressure to compromise on poverty reduction objectives for the sake of the planet – “green aid conditionalities” could emerge.
- It should be made explicit that the poorest countries should follow whatever path best brings them out of poverty, including engaging in dirty growth if that means eradicating poverty faster.
Not to forget
- From its beginnings, the HDR has argued for taking seriously the role of local specificity in thinking about economic and social development.
- This recognition underlines the inherent limitations of global indicators and rankings. Such indicators can only help prompt focus and consideration relative backwardness.
Conclusion
- To sum up, the introduction of the HDI three decades ago was an early attempt to address the shortcomings in conventional measures of wellbeing.
- The HDI has continued to attract widespread attention and motivates the work of activists, scholars and political leaders around the world.
- The HDI compels us to ask what matters more, the quantitative expansion of an economy, or the qualitative improvement in the capabilities of society.
- Indeed the revival of interest in this subject at the highest levels of government is the need of the hour.
If a metaphor is used, human development accounting represents a house and the HDI is the door to the house. One should not mistake the door to be the house and one should not stop at the door, rather one should enter the house.
References
https://www.epw.in/tags/human-development-index#slideshow-2
https://www.deccanherald.com/opinion/the-measure-of-progress-926696.html
