3

Human Development Approach

CHAPTER OUTLINE
3.1 Introduction
3.2 Goals of Human Development Set by UN-Millenium
Summit
3.3 Human Development Index (HDI)
3.4 Inequality Adjusted HDI (IHDI)
3.5 Gender Inequality Index (GII)
3.6 Multi-Dimensional Poverty Index (MPI)
3.7 Human Development : Inter-Regional comparisons in
India
3.8 Challenges Ahead
3.9 Development as Freedom to Mankind

"Economic development implies the need to bridge regional social and

economic disparities, as well as, the empowerment of the poor and
marginalized, especially women to make the entire development process
more inclusive". Economic Survey 2012-13

3.1 INTRODUCTION
Human development is a corollary of economic development. It is a
process followed for the enlargement of human choices—whether economic,
social, political or cultural. The basic objective of development at all levels
is to enable people:
(i) To lead a long and healthy life,
(ii) To acquire more and more knowledge and
(iii) To acquire resources (wealth) required for leading a decent life.
26 Issues in Economic Development

Human Development Report in 1990 observed that, “People are the

real wealth of a nation”. In general, human welfare is equated with the
quantity of material wealth. Stable GDP growth rate is essential and its
importance can hardly be under estimated. However, we must remember
that all material wealth is meant to be used by mankind only. 'Accumulation
of material wealth is a means to an end. So, real human development lies in
the sustained improvement in the quality of human lives’. Human development
in a nutshell is a people oriented strategy rather than a production-oriented
strategy. Human development, according to Human Development Report
2010, can be judged on the basis of following achievements.
(i) Empowerment,
(ii) Sustainability and vulnerability,
(iii) Human security,
(iv) Perceptions of human well-being,
(v) Community well-being and civic life,
(vi) Decent work and working environment,
(vii) Education, research and training and
(viii) Health care facilities.
India’s Human Development progress during plan period (1950-51 to
2013-14) is presented in Table 3.1.
Table 3.1: Basic indicators of India’s Human Development.
Year Life Expectancy Literacy Rate Birth Rate Death Rate Infant Mortality Rate
(Percent of (BR) (DR) (IMR)
At birth (in years) population) (Per 1000) (Per 1000) Rate (Per 1000)
1950-51 32.1 18.5 39.9 27.4 146
2013-14 67.0 71.0 21.0 6.9 44
2017-18* 69.0 96.1 20.0 6.2 32
* Source: Economic Survey, 2020-21 Table A-157 and A-158
Over the decades since 1951 one finds that along with smart-economic
progress, a lot has been done in the realm of medical facilities, spread of
awareness about diseases, vaccinations, expanding the number of hospitals
and health centres, due to which life-expectancy at birth has been increasing
continuously. General Death Rate (DR) has declined from 27.4 (per 1,000)
to 6.9 (per 1,000) in 2013-14 to 6.2 in 2018. Similarly, Infant Mortality
Rate (IMR) per 1,000 has been brought down from 146 in 1950-51 to 44
Human Development Approach 27

(per 1,000) in 2013-14 to 32 per 1,000 in 2018. However, more remains to

be done and larger amount of resources needs to be made available to the
health sector.
At the time of Independence, India was a low-income, high fertility
country with poor life expectancy and infant mortality rate (IMR), but in
2021 it has started looking good on many health indicators now such as :
(1) Median Age Up in a Still Young Country : Median age is the age that
divides a country’s population into two halves – younger and older than it. In
the 1950s, India’s median age was below 20. While India’s median age is still
among the youngest in the world, it has inched closer to where Europe was
in the 1950s. During 1950-2020, India’s median age has risen from 21 to 29;
that of US from 30 to 38; that of UK from 35 to 40; that of China from 24 to
38 and that of Pakistan from 20 to 23 respectively.
(2) Fertility Rate Down and Population Growth Slowing : India’s total fertility
(births per woman) has declined from 5.9 in 1950, when the UK and US
were at 2.2 and 3.3 respectively, to 2.0 now, that of UK is 1.8 and US is also
at 1.8. Annual rate of population growth in 1950 was 1.7 in India, 2.0 in
china, and 1.5 in US. It has been brought down in 2020 to 1.1 in India, 0.5 in
China and 0.3 in USA.
(3) Life Expectancy has Almost Doubled : During this period of 70 years,
India’s life expectancy has increased from 37 years to 69 years; in China
from 44 to 77 ; in UK it increased from 69 to 81 and in US it has risen from
69 to 79.
(4) Infant Mortality Rate (IMR) : Infant deaths per 1000 live births has declined
from 181 to 32 in India; in China from 129 to 10; in US from 30 to 6 and in
UK it has declined from 28 to 4.

3.2 GOALS OF HUMAN DEVELOPMENT SET BY UN-

MILLENIUM SUMMIT
A UN-Millennium Summit of 189 heads of states was held in September
2000, that fixed certain goals to be achieved by 2015. These goals are
summarized here:
(i) Percentage of people living on less than US$ 1 per day per head to
be reduced to half.
(ii) Number of people suffering from hunger be reduced to half.
(iii) Half of world’s population must be enabled to have access to safe
drinking water.
28 Issues in Economic Development

(iv) Primary education facility be made available to all children universally.

(v) In the field of access to education, no gender discrimination be
allowed to exist.
(vi) Maternal mortality rates be reduced by 75 percent.
(vii) Infant mortality rate be brought down by 67 present
(viii) Diseases like HIV/AIDS and Malaria be eliminated completely.
Human Development Report of 1990 and 2010 have fixed four Human
Development Indices, were fixed which were to be focused in all the countries
and at all times. These are:
(a) HDI- Human Development Index
(mentioned by HDR – 1990)
(b) IHDI-Inequality Adjusted HDI These three were
(c) GII-Gender Inequality Index mentioned by
(d) MPI-Multidimensional Poverty Index HDR-2012

3.3 HUMAN DEVELOPMENT INDEX (HDI)

With the help of HDI, an attempt is made to measure the achievements
in the field of various components of HDI, like education, health and income
of the country. In other words, HDI is used to measure the standard of
living of people in a country. HDI was developed by the United Nations’
Development Programme (UNDP) in its Report on Human Development in
1990. Through HDI an effort has been made to compare the situation
(level of human development) in different countries and list them according
to some kind of ranking on a common scale. Initially, three indicators were
fixed as essential choices. These were:
(i) Life expectancy at birth to judge the status of medical and health
facilities.
(ii) Literacy and educational attainments to represent the level of
knowledge and skill.
(iii) Real GDP per capita on PPP—purchasing power parity basis in
terms of US dollars.
As per the Human Development Report 2013, India is placed at 136th
position out of 187 countries with HDI value as 0.554. According to UNDP,
IMF Estimates for 2015, India’s place in HDI ranking has been improved
to 130th place. Though India’s GDP per capita is one-ninth of USA’s GDP.
(Source: TOI-Statistics, December 2015) HDI value of India was 0.320 in
Human Development Approach 29

1980 and 0.440 in 2000. Thus, India’s HDI value increased from 0.320 in
1980 to 0.554 in 2013 (an improvement of 73 percent over a period of 33
years). Life expectancy in India has increased from 55.1 years in 1980 to
67.0 years in 2013 (an improvement 21.6 percent). Expected years of
schooling has incased from 6.3 years in 1980 to 10.7 years in 2013 (an
improvement of 70 percent) and Gross National Income per capita (PPP in
US$ from 944 in 1980 to 3,285 in 2013 (an increase of 347.9 per cent).
When we compare HDI values in India with that of Bangladesh and Pakistan,
we find these were in close proximity to each other in 1980. But, in 2013
India has left them far behind particularly in terms of GNI per capita.
However, India’s HDI (0.554 in 2013) is not much different from the average
of 0.548 in the countries of South Asia. However, it is definitely below the
world’s average of 0.682.

3.4 INEQUALITY ADJUSTED HDI (IHDI)

As has been discussed above, HDI presents an average number of the
human development of components like life expectancy index, gross enrolment
index, literacy index and GDP index achieved in a country. This being an
average succeeds in disguising (covering) actual inequalities in the distribution
of human development across the total population of a country. In the
Human Development Report (HDR) 2010, an attempt was made to calculate/
estimate the inequality adjusted HDI, i.e., IHDI, which takes into consideration
the inequalities existing in all the dimensions of the HDI viz. life expectancy,
adult literacy rate and standard of living. In this way, IHDI presents the
actual position of human development, achieved by a country in three
dimensions.
Thus, HDI can be treated as an index of exante potential/possible/
future/human development and the IHDI as an index of exposts/actual or
real human development. The difference between HDI and IHDI is equal to
the gap by which HDI happens to be greater than IHDI. As per HDR-2013,
India’s IHDI value is 0.392 and its place in ranking is 137th out of 187
countries.

3.5 GENDER INEQUALITY INDEX (GII)

In the Human Development Report (HDR) of 2010, an attempt was
made to estimate Gender Inequality Index to show how disadvantageously
women are placed in terms of (i) reproductive health (ii) empowerment
and (iii) economic activity.
30 Issues in Economic Development

In HDR 2011, it was mentioned about India that only 10.7 percent or
58 of total 543 parliamentary seats were held by women and 26.6 percent
of female population had attained secondary level education. As against
this, percentage of male counter parts was 50.4. Approximately, 230 women
died due to pregnancy related causes after every 1,00,000 live births and
adolescents (girls of the age of 13 to 17) fertility rate was 80.3 births per
1,000 live births. In the labour market, participation of female labourers
was 32.8 percent. As a result, Gender Inequality Index (GII) value of
India was measured at 0.617, with a ranking of 127 out of 187 countries.
This information brings to the fore front that gender equality is a necessary
condition for human development. For the purpose of comparison, Bangladesh
and Pakistan are ranked at 146 and 145 respectively in this respect.

3.6 MULTI-DIMENSIONAL POVERTY INDEX (MPI)

Human Poverty Index (HPI) tries to collect various aspects of non-
income or non-monetary deprivations such as poor survival chances, unjust
employment of children, child prostitution, bonded labour, hunger,
environment pollution domestic violence and social exclusion or caste
discrimination. Thus, human poverty index measures poverty by denial of
choices and opportunities.
Construction of Multi-dimensional Poverty Index (MPI) is an attempt
to show overlapping deprivations by which individuals or households are
found suffering in common MPI shows deprived and destitutes in the same
families in the spheres of education, health and standard of living. Deprivations
in terms of education and health each depend on two indicators mentioned
below. The standard of living dimension is based on six indicators. All
these are required to construct the MPI for a household. These have been
provided weights. Any household with the positive score of 3 out of ten is
considered deprived or multi-dimensionally poor. Those households who
score 2 to 3 are vulnerable i.e., at risk of becoming multi-dimensionally
poor.
For the convenience of students these Ten Indicators are presented in
Table 3.2.
Table 3.2: Multi-Dimensional Poverty Index (MPI)
S. No. Dimensions Indicators
1. Health (i) At least one family member is malnourished.
(ii) One or more mortalities among children has been
witnessed.
Human Development Approach 31

2. Education (i) None has attended school for more than five
years.
(ii) Not even one child, out of school going age, is
enrolled in school.
3. Standard of Living (i) No power for lighting.
(ii) Clean drinking water not available.
(iii) No proper sanitation facility available.
(iv) Mostly houses have ‘Kachcha’ floor.
(v) Families use dung cakes, fire wood or charcoal
for cooking food.
(vi) Households have no assets or hardly have one
like bicycle, radio, refrigerator, telephone or
television or motorcycle.

As per the findings of HDR-2013 in India, 53.7 percent of population

suffered from multiple deprivations and another 16.4 percent households
were vulnerable to fall in the category of multiple depreivations.
Poverty measured in terms of income has been a tradition. Now a days
it is said that international poverty line is below Purchasing Power Parity
(PPP) US$ 1.25 per day per head. In India, multi-dimensional poverty is
estimated at 26.2 percent.

3.7 HUMAN DEVELOPMENT : INTER-REGIONAL

COMPARISONS IN INDIA
Human development assumes great economic significance in our country,
as the demographic dividend can be reaped only if this young population is
healthy, educated and skilled.
Economic development that has taken place in India during the last 65
years has not benefitted the entire population and all the regions of the
country uniformally. Fruits of development have not percolated/dripped
down the stream equally; consequently, the greatest tragedy of our development
is that it has not been inclusive.
Many segments of the population like landless agricultural labourer,
marginal farmers, scheduled castes (SCs) scheduled tribes (STs), and
other backward classes (OBCs) continue to suffer from social and financial
exclusion. Figures of socio-economic development show that wide regional
disparities can be seen. Some of these are mentioned here:
32 Issues in Economic Development

(1) As per Tendulkar Committee Report (2009-10) using NSS 66th round (2009-
10) highest poverty ratio (in percent for 2009-10) existed in Bihar (53.5percent
against the national average of 29.8 percent). This goes to show that poverty
in Bihar was about 80 percent than national average. Poverty ratio was 37.9
percent in Assam, 36.7 in Madhaya Pradesh, 37.0 an Odisha and 37.7 in
Uttar Pradesh as against this it was 9.5 percent in Himachal Pradesh, 12.0 in
Kerala, 15.9 in Punjab and 17.1 in Tamil Nadu (Source: Economic Survey
2012-13. Table 13.8).
(2) Figures of Monthly Per Capita Expenditure (MPCE) confirms the existence
of disparity in the MPCE as well as food share (percentage of expenditure
on food in the total monthly expenditure) across states. The same has been
presented in Table 3.3
Table 3.3: Rural-Urban Disparity 2009-10
Assam Bihar Kerala Punjab West Bengal All India
Average MPCE (Rural) (`) 1003 780 1835 1649 952 1054
Percent Share of Food (Rural) 58.1 64.7 45.9 48.2 63.5 57 .0
Average MPCE (Urban) (`) 1755 1238 2413 2109 1965 1984
Percent Share of Food (Urban) 52.9 52.9 40.2 44.3 46.2 44.4
Source: Economic Survey 2012-13, Table 13.8.

In states where average MPCE is lower, the share of expenditure on food in

total expenditure is higher. One can see from the table MPCE (Rural) in Bihar
is `780 in comparison to All India Average MPCE (Rural) as `1,054. But,
food share in Bihar is about 65 percent in comparison to all India average of
57.0 percent only. Similarly, in Assam, MPCE (Urban) is `1,755 with food
share of 52.9 percent against all India average MPCE (Urban) of `1,984 and
food share of only 44.4 percent. Expenditure on food being the primary need
of people for survival forms a high percentage of MPCE in states where
average MPCE is relatively low.
(3) Unemployment Rates for 2009-10 (per 1,000) according to usual status also
showed wild disparities. Rural unemployment per 1,000 was lowest 4 in
Rajasthan, 5 in Karnataka 6 in Maharashtra, 7 in Madhya Pradesh, 39 in
Assam, 75 in Kerala with 16 as all India average. Unemployment (Urban) per
1,000 was lowest 22 in Rajasthan, 73 in Bihar, 52 in Assam, 49 in Himachal
Pradesh, 73 in Kerala, 40 in West Bengal and 34 as All India average.
(4) Health-wise comparison can be presented with the help of the following five
indicators:
Human Development Approach 33

(i) Life expectancy for males was reported to be 71.5, the highest in
Kerala, 61.0 in Assam, 61.1 in Madhya Pradesh, 65.5 in Bihar,
67.1 in Tamil Nadu and 64.6 was average for all India.
(ii) Life expectancy for females was 76.9 in Kerala again the highest,
63.2 the lowest in Assam and 67.7 as the average for all India.
(iii) Infant mortality rate (per 1,000 live birth in 2011) was 44 as all
India average. It was 59 and 57 in Madhya Pradesh and Odisha
and 22 in Tamil Nadu, 25 in Maharashtra, 12 in Kerala.
(iv) Birth rate (per 1,000 in 2011) was 21.8 for all India, where as it
was 27.8 in Uttar Pradesh and 27.7 in Bihar.
(v) Death rate (per 1,000 in 2011) was 6.3 lowest in Maharashtra and
8.5 the highest in Odisha. For all India it was 7.1.
(5) In the field of education, Madhya Pradesh occupies the highest GER (6-13
years of 122.6 in 2010-11, while Assam has the lowest of 84.0. The All India
average is 104.3 Pupil-teacher ratio in primary and middle schools is the
lowest at 15 & 14 in Himachal Pradesh, 79 & 69 in Uttar Pradesh and 76 &
51 in Bihar. This ratio is 43 and 33 respectively on all India basis.
(6) Average person days per household under MGNREGA in 2011-12 was 58
the highest in Andhra Pradesh followed by Himachal Pradesh and Maharashtra
with 53 & 50 respectively. It was the lowest in Assam and Punjab with 26
person days only. At the all India level, average person days per household
was 43 only.

3.8 CHALLENGES AHEAD

Experience the world over and India is no exception, reveals that the
structure and quality of growth demand more attention to human development,
employment generation, poverty reduction and long term sustainability.
Pressures are developing in India, as in other countries, to reduce the damage
caused due to that development process which has not reduced problems
of conservation pollution, inequality and unemployment. The Human
Development Report, (1996) therefore makes a strong assertion: “Development
that perpetuates today’s in equalities is neither sustainable nor worth sustaining.”
According to the Human Development Report (HDR) 2015, India with
an HDI of 0.554 in 2012, with its overall global ranking at 136 (out of 186
countries) has moved up in 2015 to 130th place.
India has a long way to go as it is still in the medium human development
category with countries like China, Egypt, Indonesia and South Africa,
having better overall HDI within the same category. The existing gap in
34 Issues in Economic Development

health and education indicators in India as compared to developed countries

as well as many of the developing countries highlight the need for much
faster and wide spread of basic health and education facilities. Life expectancy
at birth in India was 64.6 years for males and 67.7 years for females in
2012, It needs to be increased progressively.
The HDR measures inequality in terms of two indicators. The first is
the income Gini co-efficient. For India, the income Gini co-efficient was
33.4 during 2011-12. It was 36.8 in 2010-11. Thus, inequality has decreased
by 9.2 percent. Efforts must be made to bring down this co-efficient further.
The second indicator is the quintile income ratio, which is a ratio of the
average income of the richest 20 percent of the population to that of poorest
20 percent. This quintile income ratio for India was 4.9 in 2011-12. This
needs to be brought down over a short span of time.

3.9 DEVELOPMENT AS FREEDOM TO MANKIND

Economic Development that has been achieved over the last few decades
has enabled the people to break the shackles of poverty, high population
growth and high infant mortality rates. Due to the overall development the
life expectancy of people has increased. Illiteracy has been reduced and
education and skill development are spreading all around. Development of
irrigation facilities in villages has made people from the dependence on
rains. Development of transport facilities has made people free from walking
on foot and or bullock-carts, cycles etc. to trevel long distances. Similarly
development of science and health care facilities have enabled people free
from the calamities of regular epidemic that used to visit countries and take
away millions of people in its spate.

POINTS TO REMEMBER

3.1 Introduction
1. The basic objective of development at all levels is to enable
people:
(i) To lead a long and healthy life,
(ii) To acquire more and more knowledge and
(iii) To acquire resources (wealth) required for leading a decent
life.
2. Human development, according to Human Development Report
2010, can be judged on the basis of following achievements.
Human Development Approach 35

(i) Empowerment;
(ii) Sustainability and vulnerability;
(iii) Human security;
(iv) Perceptions of human well-being;
(v) Community well-being and civic life;
(vi) Decent work and working environment;
(vii) Education, research and training;
(viii) Health care facilities.

3.2 Goals of Human Development Set by UN-Millenium Summit

1. A UN-Millennium Summit of 189 heads of states was held in
September 2000, that fixed certain goals to be achieved by
2015. These goals are:
(i) Percentage of people living on less than US$ 1 per day per
head to be reduced to half.
(ii) Number of people suffering from hunger be reduced to
half.
(iii) Half of world’s population must be enabled to have access
to safe drinking water.
(iv) Primary education facility be made available to all children
universally.
(v) In the field of access to education, no gender discrimination
be allowed to exist.
(vi) Maternal mortality rates be reduced by 75 percent.
(vii) Infant mortality rate be brought down by 67 present
(viii) Diseases like HIV/AIDS and Malaria be eliminated
completely.
2. Human Development Report of 1990 and 2010 have fixed four
Human Development Indices, were fixed which were to be
focused in all the countries and at all times. These are:
(i) HDI-Human Development Index (mentioned by HDR –
1990);
(ii) IHDI-Inequility Adjusted HDI;
(iii) GII-Gender Inequality Index;
(iv) MPI-Multidimensional Poverty Index.
36 Issues in Economic Development

3.3 Human Development Index (HDI)

HDI is used to measure the standard of living of people in a
country. Initially, three indicators were fixed as essential choices.
These were:
(i) Life expectancy at birth to judge the status of medical and
health facilities.
(ii) Literacy and educational attainments to represent the level
of knowledge and skill.
(iii) Real GDP per capita on PPP—purchasing power parity
basis in terms of US dollars.

3.4 Inequality Adjusted HDI (IHDI)

HDI presents an average number of the human development
of components like life expectancy index, gross enrolment index,
literacy index and GDP index achieved in a country. This being
an average succeeds in disguising (covering) actual inequalities
in the distribution of human development across the total
population of a country.

3.5 Gender Inequality Index (GII)

In the Human Development Report (HDR) of 2010, an attempt
was made to estimate Gender Inequality Index to show how
disadvantageously women are placed in terms of (i) reproductive
health (ii) empowerment and (iii) economic activity.

3.6 Multi-Dimensional Poverty Index (MPI)

1. Human Poverty Index (HPI) tries to collect various aspects of
non-income or non-monetary deprivations such as poor survival
chances, unjust employment of children, child prostitution,
bonded labour, hunger, environment pollution domestic violence
and social exclusion or caste discrimination. Thus, human poverty
index measures poverty by denial of choices and opportunities.
2. Construction of Multi-dimensional Poverty Index (MPI) is an
attempt to show overlapping deprivations by which individuals
or households are found suffering in common MPI shows
deprived and destitutes in the same families in the spheres of
education, health and standard of living. Deprivations in terms
Human Development Approach 37

of education and health each depend on two indicators mentioned

below, The standard of living dimension is based on six indicators.
All these are required to construct the MPI for a household.
These have been provided weights. Any household with the
positive score of 3 out of ten is considered deprived or multi-
dimensionally poor. Those households who score 2 to 3 are
vulnerable i.e., at risk of becoming multi-dimensionally poor.

3.7 Human Development: Inter-Regional Comparisons in India

Human development assumes great economic significance in
our country, as the demographic dividend can be reaped only
if this young population is healthy, educated and skilled.

3.8 Challenges Ahead

India has a long way to go as it is still in the medium human
development category with countries like China, Egypt, Indonesia
and South Africa, having better overall HDI within the same
category. The existing gap in health and education indicators
in India as compared to developed countries as well as many
of the developing countries highlight the need for much faster
and wide spread of basic health and education facilities. Life
expectancy at birth in India was 64.6 years for males and 67.7
years for females in 2012, It needs to be increased progressively.

3.9 Development as Freedom to Mankind

Economic Development that has been achieved over the last
few decades has enabled the people to break the shackles of
poverty, high population growth and high infant mortality rates.
Due to the overall development the life expectancy of people
has increased. Illiteracy has been reduced and education and
skill development are spreading all around. Development of
irrigation facilities in villages has made people from the dependence
on rains. Development of transport facilities has made people
free from walking on foot and or bullock-carts, cycles etc. to
trevel long distances. Similarly development of science and
health care facilities have enabled people free from the calamities
of regular epidemic that used to visit countries and take away
millions of people in its spate.
38 Issues in Economic Development

Check Your Progress

1. Explain Human Development Index as a measure of Economic Development.

2. “Economic growth is the means to achieve the end which is the improvement
in the quality of life of human beings”. Comment.
3. Explain the concept of human development as distinguished from economic
development. Comment on India’s HDI in recent years.
4. Write short notes on:
(i) Human Development Index
(ii) Inequality Adjusted HDI
(iii) Gender Inequality Index
(iv) Multi Dimensional Poverty Index.
 