What is HDI and how it measures development?

What is HDI? HDI (Human Development index) is a way of measuring development by combining indicators of life expectancy, educational attainment and income. The breakthrough for the HDI was the creation of a single statistic which was to serve as a frame of reference for both social and economic development. The HDI sets a minimum and a maximum for each dimension, called goalposts, and then shows where each country stands in relation to these goalposts, expressed as a value between 0 and 1.

It is also used to distinguish to a large extent, whether the country is a developed, a developing or an underdeveloped country, and also to measure the impact of economic policies on quality of life. The HDI was created to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone. The HDI can also be used to question national policy choices, asking how two countries with the same level of GNI per capita can end up with such different human development outcomes.

For example, the Bahamas and New Zealand have similar levels of income per person, but life expectancy and expected years of schooling differ greatly between the two countries, resulting in New Zealand having a much higher HDI value than the Bahamas. These striking contrasts can stimulate debate about government policy priorities.

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CALCULATION OF HDI

1. Life expectancy index (LEI) = (LE-20)/(83. 4-20)
2. Education index (EI) = v(MYSI*EYSI)/ 0. 951
3. Income Index (II) Log (GNIpc)-log(100)]/ [Log (107721) - log (100)]

LE: Life expectancy at birth MYS: Mean years of schooling (Years that a 25-year-old person or older has spent in schools) EYS: Expected years of schooling (Years that a 5-year-old child will spend with his education in his whole life)- GNIpc: Gross national income at purchasing power parity per capita

India ranks a low 134 among 187 countries in terms of the human development index (HDI), which assesses long-term progress in health, education and income indicators, said a UN report released on Wednesday. Although placed in the "medium" category, India's standing is way behind scores of economically less developed countries, including war-torn Iraq as well as Philippines. India’s ranking in 2010 was 119 out of 169 countries Sri Lanka has been ranked 97, China 101 and the Maldives 109.

Bhutan, otherwise respected for its quality of life, has been placed at 141, behind India Pakistan and Bangladesh are ranked 145 and 146 in the list of countries that is headed by Norway and in which the Democratic Republic of Congress is at the bottom. The other two countries in South Asia, Nepal and Afghanistan, occupy ranks 157 and 172. According to the “UN Human Development Report, 2011: Sustainability and Inequality”, India’s HDI is 0. 5 compared to 0. 3 in 2010.

COMPONENTS OF THE HUMAN DEVELOPMENT INDEX

The education component of the HDI is now measured by mean of years of schooling for adults aged 25 years and expected years of schooling for children of school entering age. Mean years of schooling are estimated based on educational attainment data from censuses and surveys available in the UNESCO Institute for Statistics database and Barro and Lee (2010) methodology). Expected years of schooling estimates are based on enrolment by age at all levels of education and population of official school age for each level of education.

Expected years of schooling are capped at 18 years. The indicators are normalized using a minimum value of zero and maximum values are set to the actual observed maximum value of mean years of schooling from the countries in the time series, 1980–2010, that is 13. 1 years estimated for Czech Republic in 2005. Expected years of schooling are maximized by its cap at 18 years. The education index is the geometric mean of two indices. The life expectancy at birth component of the HDI is calculated using a minimum value of 20 years and maximum value of 83. 4 years.

This is the observed maximum value of the indicators from the countries in the time series, 1980–2010. Thus, the longevity component for a country where life expectancy birth is 55 years would be 0. 552. For the wealth component, the goalpost for minimum income is $100 (PPP) and the maximum is $107,721 (PPP), both estimated during the same period, 1980-2011. The decent standard of living component is measured by GNI per capita (PPP$) instead of GDP per capita (PPP$) The HDI uses the logarithm of income, to reflect the diminishing importance of income with increasing GNI.

The scores for the three HDI dimension indices are then aggregated into a composite index using geometric mean. The HDI facilitates instructive comparisons of the experiences within and between different countries.

FACTORS AFFECTING HDI

There are various factors that affect the economic development of any economy like health, education, per capita income, gender inequality, deforestation, population, pollution levels, literacy rate, infant mortality rate etc. Let us see a few of them one by one and try to find where India lags behind majority of the economies and why there is a mismatch in India’s growth and evelopment. A) Education index Education is an important indicator of a nation’s wellbeing, standard of living and is a measure of the economic development and quality of life which further helps in determining whether an economy is developed, developing or underdeveloped. India’s Shortfalls The Indian government has been lethargic in this aspect and has failed in ensuring a better education framework. Here, the government alone is not to be blamed. A majority of Indian population tend to neglect primary education. Poverty has been a major cause leading to lower literacy rates in India.

Poor parents in underdeveloped states and backward regions make their children work to support the family financially. Girls in rural areas are forced to stay back at home and do daily chores. Also, education funding in rural areas is quite low. Uneducated parents don’t find it important to educate their children and this vicious cycle continues leaving the whole community uneducated. The government is not spending enough in education. Currently around 4% of GDP is being spent on education much lower than the target of 6% of GDP.

Lower enrolment, high dropout rates, teacher absenteeism, poor instruction qualities, poor infrastructural facilities like classrooms, libraries, low encouragement and gender inequality are the root causes of low education index in India. About 30% of the world’s illiterate population belongs to India.

Health Index 2% of India’s children below the age of three are malnourished, almost twice the statistics of sub-Saharan African region of 28%. Although India’s economy grew 50% from 2001–2006, and its child-malnutrition rate only dropped 1%, lagging behind countries of similar growth rate. Malnutrition impedes the social and cognitive development of a child, reducing his educational attainment and income as an adult. These irreversible damages result in lower productivity. Infant mortality rate Approximately 1. 72 million children die each year before turning one.

The under five mortality and infant mortality rates have been declining, from 202 and 190 deaths per thousand live births respectively in 1970 to 64 and 50 deaths per thousand live births in 2009. However, this rate of decline is slowing. Reduced funding for immunization leaves only 43. 5% of the young fully immunized. Infrastructure like hospitals, roads, water and sanitation are lacking in rural areas. Shortages of healthcare providers, poor intra-partum and newborn care, diarrheal diseases and acute respiratory infections also contribute to the high infant mortality rate.

Inadequate safe drinking water Access to protected sources of drinking water has improved from 68% of the population in 1990 to 88% in 2008. However, only 26% of the slum population has access to safe drinking water, and 25% of the total population has drinking water on their premises. This problem is exacerbated by falling levels of groundwater caused mainly by increasing extraction for irrigation. Insufficient maintenance of the environment around water sources, groundwater pollution, excessive arsenic and fluoride in drinking water pose a major threat to India's health. Rural health

Rural India contains over 68% of India's total population with half of it living below struggling for better and easy access to health care and services. Health issues confronted by rural people are diverse and many – from severe malaria to uncontrolled diabetes, from a badly infected wound to cancer. Postpartum maternal morbidity is a serious problem in resource-poor settings and contributes to maternal mortality, particularly in rural India; however, Misoprostal has been identified as a cost-effective maternal mortality intervention for home births. A study conducted in 2009, using multinomial logistic regression methods, found that 43. % of mothers reported to have experienced postpartum morbidities six weeks after delivery. Rural medical practitioners are highly sought after by people living in rural India as they more financially affordable and geographically accessible than practitioners working in the formal public health care sector. The National Rural Health Mission (NRHM) was launched in April 2005 by the Government of India. The goal of the NRHM is to provide effective healthcare to rural people with a focus on 18 states which have poor public health indicators and/or weak infrastructure.

GDP per capita (PPP) It is defined as GDP divided by the total population of a country. Per capita income is often used as a measure of the wealth of the population of a nation, particularly in comparison to other nations. The very fact that India in spite of being the 4th largest economy stands 140th in terms of per capita income indicates that the income is distributed unevenly where a very percentage of the population is rich while majority is poor.

Poverty in India is widespread, with the nation estimated to have a third of the world's poor. In 2011, World Bank stated, 32. 7% of the total Indian people falls below the international poverty line of US$ 1. 25 per day (PPP) while 68. 7% live on less than US$ 2 per day. Lack of a market economy & over government regulation and red tape, known as License Raj is the main cause of poverty in India.

While other Asian countries like China, Singapore and South Korea started with the same poverty level as India after independence, India adopted a socialist centrally planned, closed economy. Another cause is a high population growth rate, although demographers generally agree that this is a symptom rather than cause of poverty. While services and industry have grown at double digit figures, agriculture growth rate has dropped from 4. 8% to 2%. About sixty percent of the population depends on agriculture whereas the contribution of agriculture to the GDP is about eighteen percent.

The surplus of labor in agriculture has caused many people to not have jobs. Farmers are a large vote bank and use their votes to resist reallocation of land for higher-income industrial projects. D) Gender Inequality Index There is strong evidence to suggest that India is a country of high concern in relation to missing women. The 2011 Census found a worrying trend in child sex ratios with only 914 females for 1,000 males, a drop from 927 in 2001. Using data from the 2011 Census in India, after adjusting for excess mortality rates in girls, the estimates of number of selective abortions of girls rose from 0 to 2 million in the 1980s, to 1. to 4. 1 million in the 1990s, to 3. 1 to 6. 0 million in the 2000s. The study shows that the problem is in fact growing amongst the middle class which suggests that missing women cannot be attributed to poor socio-economic status. The male/female sex ratio for the total population in 2012 is 1. 08. According to data from the 2006-2007 Demographic and Health Survey for India, 41. 5% of girls and 45. 3% of boys under the age of two had received all their vaccinations. Under-five mortality rates were higher for girls than for boys (79. 2 per 1000 live births for girls, 69. % for boys), while malnutrition rates were equal or slightly higher for girls. Given that in most contexts, rates of under-five mortality and malnutrition are higher for boys than for girls, this would indicate bias towards sons in regard to early childhood care. Gender-disaggregated data in regard to child labor was unavailable. Primary and secondary school enrolment and attendance rates are lower for girls than for boys indicating some son preference in regard to access to education.

Conclusion

“Economic growth” and “development” of any economy should go hand in hand unlike Indian economy where there is a huge contrast in this regard. India should focus on primary education, basic healthcare, gender equality and other social, environmental and economic aspects to ensure sustainable development. India has been very slow in reacting to the transformation of economy restructuring. Masses need to be educated about family planning, importance of education, gender inequality especially in rural areas so that they don’t take much time to adapt to an environment which is essential for development.

Educational institutes should be set up on a large scale focusing more on basic education. Healthcare sector needs to be given prime importance. We need to take advantage of the technology available to us. Corruption is the biggest hindrance coming in the way of development and thus should be kept in check. India has till date come up with many schemes and programs for the poor section but has repeatedly failed to implement them effectively. So, while economic growth is vital to the economy, human development is to be given equal importance which decides or shows the true picture of the economy.

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