India ranks 132 out of 191 countries in the Human Development Index (HDI) 2021, after registering a decline in its score over two consecutive years for the first time in three decades.

What is Human Development Index (HDI)?

• 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 – HDI

• 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
2. Education
3. Standard of living

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

• 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 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.

Way forward

• 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.

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