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Indian Economy / Macro Social Aggregates

Human Development in India

The concept of Human development was being developed by Late Prof. Mahbub ul Haq from Pakistan and Prof. Amartya Sen from India. Mahbub ul Haq and Amartya Sen gave social dimension to the growth of a country. It was adopted by United Nations Development Programme (UNDP). Human development is a process of enlarging people's choices.

Human Development Index

  • Human development is being measured with Human Development Index (HDI) based on the following 3 parameters

    • Longevity Index based on Life Expectancy at Birth (LEB). The Maximum value of LEB is 85 and the Minimum value is 25.

    • Education Index based on a combination of Adult Literacy Rate with 2/3rd weight and Gross Enrollment in the Primary, Secondary and Tertiary education (Intermediate and Above) with 1/3rd weight.

      The Maximum value of Adult Literacy is 100 and the Minimum value is 0. Similarly, the Maximum value of Gross Enrollment value is 100 and the Minimum value is 0.

    • Standard of Living Index based on Per Capita Real GDP measured at PPP. The Maximum Per Capita is $40,000 and the Minimum is $100.

  • To have comparability across the countries, dimension indices were worked out for each parameter and it is defined as follows,

    Dimension Index = (The Actual Value - The Minimum Value) / (The Maximum Value - The Minimum Value)

    The Dimension Index for each parameter lies between 0 and 1. The simple average of the three dimensional indices gives the HDI.

  • From the year 2010 onwards, the formula has been changed

    • The LEB Minimum value is changed to 20.

    • The Education Index is simple average of Mean Years of Schooling Index (MYSI) and Expected Years of Schooling Index (EYSI), where MYSI is (Mean Years of Schooling / 15) and EYSI is (Expected Years of Schooling / 18).

    • The Maximum value of Per Capita is increased from $40,000 to $75,000.

    • The HDI will be the geometric mean of the above three indices instead of simple average.

  • Adopting the above concepts and methodology, UNDP has been working out the HDI for each of the member countries and releases the UNDP report on human development since 1990.

  • Countries having HDI of 0.9 or above are categorized as Very High Development Countries. Those having 0.8 to 0.899 are High Development Countries.

    Those having 0.5 to 0.799 are Medium Development Countries. Those having less than 0.5 are Low Development Countries.

  • For the year 2018, Human Development Index for India stood at 0.640 and ranked at 130 in the world. India is bracketed under Medium Development Countries (developing country). The first state to bring state level Human Development Report was Madhya Pradesh, in 1995.