It is a report card that cannot be ignored. Earlier this month, the United Nations Development Programme (UNDP) published its annual Human Development Index or HDI, as part of the 2011 Human Development Report (HDR).
India ranks 134thof the 187 countries included in this report.
At the top of the scale are Norway, Australia, Netherlands, the United States and New Zealand while Chad, Mozambique, Burundi, Niger and Congo occupy the bottom five places. Overall, it is a dismal picture for the South Asian countries with Sri Lanka performing the best at 97, followed by the Maldives (109), India, Bhutan (141), Pakistan (145), Bangladesh (146), Nepal (157) and Afghanistan (172). Significantly, India also ranks behind war-torn economies like Iraq and Palestine.
The HDI ranks countries on a scale of zero to one, with one being the highest. India’s value is 0.547, below both the average global value (0.682) and the average South Asian value (0.548). However India’s HDI value has improved in recent years, from 0.344 in 1980.
India remains classified as ‘medium human development’, on a scale that includes very high, high, medium and low human development.
What’s the point of the HDI?
For several decades, indicators such as the Gross National Income (GNI) or the Gross National Product (GNP) were used to measure a country’s performance or growth. The GNI could therefore tell us what the average national income was, how well a country had performed in that year, whether it had improved on its performance in previous years and how it compared with other countries in the same region.
But for economists like the late Mahbub ul Haq from Pakistan and India’s Amartya Sen, such indicators could not, and did not tell the whole story. For instance, what did the GNI tell us about the distribution of wealth within a country? What did we know about access to education or health care services? What was the average life expectancy of an individual in a country? In other words, does increased economic growth in a country always translate into an overall better quality of life for its people? Does improved development necessarily mean more choices and increased access to resources?
The HDI was developed in response to these gaps in our understanding of a country’s overall performance. Since it was first published in 1990, the HDI has undergone many changes but at its core, it remains a tool that puts people first. The HDI is also used to question or contradict robust government statements on flourishing economies. A country can have a strong GNI but perform poorly on the HDI, indicating that there are poor or unacceptable inequities in the distribution of wealth among people.
What the HDI measures
The HDI is calculated on the basis of three criteria that all contribute towards an individual’s overall well-being — health, knowledge (or education) and income. Each of these is in turn measured by either one powerful indicator or a cumulative set of indicators.
Health is measured by life expectancy at birth; ie when a person is born in a country, how long can s/he expect to live, on average? The life expectancy calculation thus takes into account the various risks of early mortality or death for an individual. The quality of available health care is a crucial contributor to life expectancy but equally important is the actual access an individual has to health services.
For instance, how far does a woman have to travel to seek medical help at the time of childbirth? According to the 2011 HDI, India’s life expectancy is 65 years on average, a significant improvement from 61 years in 2000 (as calculated by the World Health Organisation). Indian Women are expected to live marginally longer (66 years) than men (63 years).
Until 2010, education or knowledge was measured by combining the literacy rate of adults with school enrolment rates (ie how many students were enrolled in schools, from the primary level right up to university?). However, this has been somewhat modified and knowledge is now calculated by combining two different criteria. The first is the number of years a child of school-going age is expected to be in school (at the point when s/he enters school).
In the 2011 HDI, this is now 10.3 years in India. The second measure is the mean number of years of schooling that adults over the age of 25 have already experienced. This is a worrying 4.4 for India. However, we can interpret this positively to mean that children who are now of school-going age have greater access to education. Development economists argues that these two indicators provide a clearer, more accurate picture since they take into account access to school in the past and the present.
The third and final measure, income, is now measured by the Gross National Income; ie how does income actually flow to the residents of a country? Until last year, the GDP was used to calculate this. However, the GDP merely tells us the monetary value of all goods and services that are produced in and by a country but not whether these goods and services are actually utilised by all the residents of the country.
Other complementary indices
The HDI, however complex, is not a stand-alone measure of development. The UNDP makes it clear that although the HDI is a composite index, it does not include several relevant indicators such as political participation or gender equality. For this reason, since 2010, the UNDP has begun to include three other indices in the annual Human Development Report — the Gender Inequality Index (GDI), the Inequality-adjusted HDI (IHDI) and the Multidimensional Poverty Index (MPI).
The IHDI was developed in order to look at the inequalities that may exist within a country, in terms of health, knowledge and income. When the HDI is ‘adjusted’ for any possible internal inequalities, several countries slip down the rankings. For instance, the United States ranks 4th on the HDI scale but has fallen to 23 on the IHDI for two reasons — inequality in income distribution and unequal access to health care. On the other hand, countries like Sweden and Denmark rank higher on the IHDI than the HDI because they have better equality in distribution of income and access to health and education.
More simply, in a perfect world, where all individuals have equal access to all resources, the HDI and the IHDI would be exactly the same. But given the existing levels of inequality, the IHDI is a more accurate representation of the actual, and contrasting, levels of human development within a country.
Therefore, while India’s 2011 HDI is 0.548, the IHDI is only 0.378 when adjusted for inequalities.
To recognise and take into account the disadvantages that woman and girls face, the UNDP has also introduced the Gender Inequality Index (GII). The GII is calculated on the basis of five key indicators — the participation of women in the labour force, representation in parliament, number of years of schooling, maternal mortality (the number of women who die in childbirth) and adolescent fertility. India ranks 129 on the GII scale and is the lowest in South Asia behind Maldives (52), Sri Lanka (74), Bhutan (98), Bangladesh (112), Nepal (113) and Pakistan (115).
The final complementary index is Multidimensional Poverty Index (MPI) which further breaks down poverty-related factors at the level of the family. The MPI takes a closer look at 10 crucial indicators including access to electricity, clean water, toilets and cooking fuel, among others. According to the 2011 MPI, over 53 per cent of India’s population live in a state of multi-dimensional poverty and lack access to several of the ten indicators. Overall, South Asia has the largest percentage of the multi-dimensionally poor.
So what?
It has been argued that the HDI and related indices are, potentially, powerful tools for policy change and advocacy. India currently invests 3.1 per cent of total expenditure in education and a paltry 1.1 per cent in health. The HDI report reiterates the urgent need to increase this investment in both education and health, thereby directly improving the overall well-being of the country.
The HDI can be accessed at http://hdr.undp.org/en/statistics/hdi/