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Analysis of HDI 2019 – An Index for Enlarging People’s Choices

The constructive voices for viewing the development of human being beyond the prism of income is as old as the birth of GDP. It was the year 1990 when an index, popularly called Human Development Index (HDI) successfully constructed to use as a proxy for indicating the achievement of the basic capabilities of the people of a country and the globe as a whole. Imbibing basic capabilities among the people is the fundamental duty of an affluent nation.

Enhancing the basic capabilities of people is an indispensable part of human development. Even UNDP acknowledges the power of a nation has a high level of capabilities among people. That is the reason why, since the inception of the HDI Report, UNDP has not deviated in the last three decades from its focused agendas of seeing a well-off/happy society across the world.

Although unquestionably, no one can guarantee human happiness, it does not mean that there is no significant impact on the development process. The development process can create an inductive environment for people’s choices which might further lead to people’s happiness. This is originally Amartya Sen’s capability approach of human well-being which further UNDP adopted to monitor human development and divert the attention of people substantially from economic growth to human development.

The very first report broadly defined human development as “human development is the process of enlarging people’s choices. The most critical of these wide ranges- ranging choices are to live a long and healthy life, to be educated, and to have access to resources needed for a decent standard of living. Additional choices include political freedom, guaranteed human rights and personal self-respect”.

The inaugural report also reported that development enables people to have these choices. Amartya Sen the architect of this index (HDI) once wrote that question likes-“do they (people) have the capability to live long? Can they avoid mortality during infancy and childhood? Can they escape preventable morbidity? Do they avoid illiteracy? Are they free from hunger and undernourishment? Do they enjoy personal liberty and freedom?” were primarily used to develop HDI.

Mahbub Ul Haq- another prominent architect of HDI in his 1995 work wrote that HDI followed six basic principles as guidelines that are to; (i) measure the basic purpose of human development- to enlarge people`s choice; (ii) include a limited number of variables to keep it simple and manageable; (iii) be composite rather than plethora of separate indices; (iv) cover both social and economic choices; (v) be enough flexible in methodology to incorporate, once better alternatives available; (vi) not be too inhibited by lack of reliable and up-to-date data series. Exactly based on their prominent ideas the UNDP designed HDI to cover achievement in three basic dimensions- longevity, education and living standards. To capture the three dimensions, four indicators are used; life expectancy at birth; adult literacy rate; combined gross enrolment in primary, secondary and tertiary education; and GDP per capita in US$ adjusted by Purchasing Power Parity.

The performance on each dimension is expressed as a value between 0 and 1, by applying the general formula; Dimensions Index= Actual Value – Minimum Target Value / Maximum target value – minimum target value. HDI is then calculated as a single average of the dimension’s indices. Over the period,  multiple changes have been made by UNDP likes; In 2010, it launched three indicators, Multidimensional Poverty Index (MPI); Inequality Adjusted Human Development Index (IHDI); and Gender Inequality Index (GII), and Gender Development Index (GDI) in 2014.

Human Development Report, (2019), present HDI for 189 countries with the most recent data of 2018. Out of the 189 countries, 62 are in the very high human development group, 54 in the high, 37 in the medium and only 36 in the low human development group.

The top five countries in the global HDI ranking are Norway (0.954), Switzerland (0.946),  Ireland (0.942),  Germany & Hong Kong (0.939) and Australia (0.938) bottom five are Burundi (0.423), South Sudan (0.413), Chad (0.401), Central African Republic (0.381) and Niger (0.377). In the last five years (between 2013 to 2018) Ireland has achieved the highest increase in HDI rank (13 places up) followed by Thailand and the Dominican Republic, by 12 and 10 places respectively and during the same period, Venezuela has reported the highest downfall in HDI ranking (26 places down) followed by Yemen and the Syrian Arab Republic by 18 and 14 places respectively.

The global HDI value is consistently rising since 1990. Its value is 2018 as reflected in the 2019 report was 0.731 as compared to 0.598 in 1990 which is 21.7 percent more than what it was in 1990. Across the world, the living standard, life span, and education level, of the human being are rising significantly. Now the average life span is 7 years more than what it was in 1990 and more than 130 countries have universal enrollment in primary education. When it comes to the rationality part, the HDI value is rising across all regions. During the periods of 1990-2018, South Asia is the fastest, growing at 45.58 percent, followed by East Asia and Pacific at 41.8 percent and Sub-Saharan Africa at 34.9 percent.

Inequality in income distribution has a reparation effect on many personal and social aspects. More importantly, it has a deep-rooted impact on education, health, voice, access to technology and many more aspects of the human being.  Hence, when there is inequality in income, society, education, health, etc. It has a significant effect on aggregate HDI value.

The data reveal that inequality deeply dented the HDI value of all the groups of countries. Hence, when inequalities adjusted to HDI value- in very high human development the value falls from 0.892 to 0.796, i.e. the loss of 10.7 percent, in case of high human development the value falls from 0.750 to 0.615 i.e. the loss of 17.9 percent, in case of Medium Human Development the value falls from 0.634 to 0.470 i.e. loss of 25.9 percent, and in case of Low Human Development, the value falls from 0.507 to 0.349 i.e. the loss of 31.1 percent and the global HDI value fall to 0.584 from 0.731, or the average loss due to inequality is about 20 percent.

Losses range from 3.6 percent in Japan to 45.3 percent in Comoros. The data drive us to a very serious conclusion, that the countries having very high human development group, lose less from inequality than the countries in the lower group.

India’s Status in HDI since the inception of the Human Development Index.

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As compared to the 2018 HDI report, India has moved to one place above its ranking and for the last five years its HDI score too has been more than the average score of South Asia but lower than the world average. But the positive aspect is that the average annual HDI growth of India is more than South Asia and World.

The impact of inequality in India’s HDI score is much more than in South Asia and the World. Because of the presence of inequality, India suffers an overall loss of 26.33 percent as compared to South Asia of 25.9 percent and the HDI score of the world to 20.2 percent.

For enlarging the choices of the people of India, the Government needs to invest more in education, health, infrastructure and many more other areas that make human life much better. Only investing is not enough, ensuring quality along with quantity is highly important in this technological and innovation-driven third decades of the 21st century. Thus the government needs to shift its approaches beyond GDP centric policies and strategies the policies for key areas that ensure good quality of life of people.