Human Development Report by UNDP

Giving primacy to Human Development


From UPSC perspective, the following things are important :

Prelims level: HDI Index;

Mains level: Key issues related to Human Development;

Why in the News?

Two recent reports reveal some important facets of India’s Development.

  • The Human Development Report 2023-24, published by the UNDP, takes a comparative perspective and maps the achievements in the area of human development.
  • A paper published by the World Inequality Lab in March 2024 provides long-term trends in income and wealth inequality in India between 1922 and 2023.

About HDI:

The Human Development Index (HDI) is a measurement system used by the United Nations to evaluate the level of individual human development in each country. It was introduced by the U.N. in 1990.

How is the HDI measured?

The HDI is the geometric mean of the three dimensions above, with indices calculated separately for each country using data on life expectancy, schooling and per capita income. The final result always gives a value between 0 and 1 which defines, according to the UNDP, the four degrees of human development detailed below:

  • Very high: countries with a HDI above 0.80.
  • High: countries with a HDI between 0.70 and 0.80.
  • Medium: countries with a HDI between 0.55 and 0.70. (India is here)
  • Low: countries with a HDI below 0.55.

India’s poor ranking in HDI:

  • Regional Trends: India’s HDI ranking has improved marginally over the years, but it still lags behind several countries, including Bhutan, Bangladesh, Sri Lanka, and China. In 2022, India ranked 134 out of 193 countries.
  • Low HDI Value: Despite the incremental improvement in ranking, India’s HDI value remains relatively low. The HDI value increased from 0.633 in 2021 to 0.644 in 2022.
  • Gender Inequality Index (GII): While India showed improvement in its GII ranking in 2022, moving from 122 out of 191 countries in 2021 to 108 out of 193 countries in 2022, significant gender disparities persist. Notably, India faces one of the largest gender gaps in labor force participation rates, with a substantial difference between men (76.1%) and women (28.3%).
  • Medium Human Development Categories: India’s HDI ranking places it within the medium human development category alongside countries like Myanmar, Ghana, Kenya, Congo, and Angola.

Key concerns related to Human Development:

  • Increasing Disparity Between Countries: The report underscores a concerning trend of growing inequality between countries, particularly between those at the upper and lower ends of the Human Development Index (HDI).
  • Economic Concentration: The concentration of economic power in a few countries is exacerbating global inequality. Nearly 40% of the global trade in goods is controlled by just three or fewer countries
  • Tech Company Dominance: The dominance of large technology companies further exacerbates inequality, with the market capitalization of the top three companies surpassing the GDP of the majority of countries.

Widening inequality:

  • Income Disparities in India: The study from the World Inequality Lab reveals stark income disparities in India, with the bottom 50% of the population receiving only 15% of the national income.
    • Conversely, the top 1% earns on average 23 times more than the average Indian, and the top 10,000 individuals earn 2,069 times the average Indian.
  • Reduction of Middle-Class size: During the period from 2014 to 2022, the incomes of the middle 40% of the income distribution have grown slower than the bottom 50%. This trend suggests a potential reduction in the size of the ‘middle class.
  • High Household Debt and Low Savings: Household debt levels in India have reached a record high of 40% of GDP, while net financial savings have plunged to 5.2% of GDP.

Way Forward: 

  • Promote Inclusive Growth Policies: Implement policies that prioritize inclusive growth, focusing on reducing income disparities, and enhancing access to education, healthcare, and economic opportunities for all segments of society.
  • Enhance Social Safety Nets: Strengthen social safety nets to provide support to vulnerable populations, including targeted welfare programs, universal healthcare coverage, and unemployment benefits.

Mains PYQ: 

Q Despite the consistent experience of high growth, India still goes with the lowest indicators of human development. Examine the issues that make balanced and inclusive development elusive.(UPSC IAS/2019)

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