Human Development Index: A snapshot

Last year I wrote on HDI, which is an index incorporating ten indicators under the broad criteria of education, health and living standard. New data propel me to revisit HDI. Further, this year too, I am writing on HDI after writing on income distribution the previous month, for nothing could be more useful than examining India’s HDI in the context of static income distribution.

India’s cross-country HDI rank is 130 out of 188 countries in 2017 (Table 1) in contrast to 131 in 2015 (shown in my October 17, 2017 article), thus demonstrating little improvement. Its HDI — maximum being 1 —improved from 0.63 to 0.64, life expectancy from 68.3 to 68.8 years at birth, average school years from 6.3 to 6.4, and per capita GNP from $5,691 to $6,363 (at 2011 Purchasing Power Parity). It is obvious that, while the HDI indicators improved insignificantly, per capita GNP increased by 12 per cent, a telltale sign of income growth being concentrated primarily on high deciles.

Table 2 takes three time points — 2012, 2015 and 2017 — to intensify the facts. Between 2012-17, India’s HDI rank improved by 2 but this improvement fell behind South Africa (6), China (7) and Brazil (7). The next column shows Atkinson’s Coefficient of Human Inequality (CHI), which indicates the extent of inequality in a country. Again, while India improved its CHI during 2012-17, its improvement lagged behind those emerging economies. It also appears that, with year-on-year tracking, India’s improvement was better during 2012-15 than 2015-17.

Illustration by Ajay Mohanty

Inequality, as measured by CHI, can be incorporated into the HDI, thus yielding a composite Inequality Adjusted HDI (IHDI) (Table 2, Column 3). Obviously, as long as there is inequality, it will worsen HDI. Thus IHDI would be lower than HDI (see Table 1, Column 1, to compare). This loss when IHDI and HDI are compared is tracked in Table 2, Column 4. Note that the percentage loss between HDI and IHDI is highest for India (other than South Africa), again revealing that inequality continues to have frustrating ramifications for India’s human development in a cross-country lineup.

Cross-country comparisons can be sharpened through the UN’s concept of “multi-dimensional” poverty (MDP) that inserts “deprivation cutoffs” on the above-mentioned criteria. For example, if no household member aged 10 years or older has completed five years of schooling, the household is defined as deprived in schooling.[1]MDP occurs where 33 per cent of the population is in overall, weighted deprivation, and Severe MDP occurs where 50 per cent are thus deprived.

Table 3 reveals that 27.5 per cent of the Indian population were in MDP (data reported 2018), and 8.6 per cent in Severe MDP. These figures are far smaller for Brazil, China and South Africa. Though India has made strides over the last two decades in reducing MDP and Severe MDP, speed must be regained to achieve the UN Sustainable Development’s 2030 Goal of “leaving no one behind” in severe poverty to which India is signatory.

In October, the BBC in its series on modern day slavery, had a one hour coverage on India. It bared scores of little boys and girls being transported across the country and disappearing from their parents’ sights who said they had no financial ability to search for their children. Even where children stayed with parents, it was alarming. A 3-year old being put to collect mica in a mine was explained by the mother simply: They had to try to return the debt into which their children were born. The world too watched this bioscope. As Bipul Bhattacharya expressed succinctly in his Letter to the Editor of this paper on October 22, 2018, on the matter of improving India’s depressing income distribution, “…how many more decades will it take…? …that is a more important (question) than when India will become the third largest economy in the world in terms of PPP or whether India is the fastest growing economy in the world.”

[1] For deprivation cutoff points for school attendance, child mortality, nutrition, sanitation, electricity, drinking water, flooring, cooking fuel, and assets ownership, see Akire and Kanagaratnam, “MPI Methodological Note,” UNESCO, Winter 2017-18

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