Human Development Index

What is HDI? HDI (Human Development index) is a way of measuring development by combining indicators of life expectancy, educational attainment and income. The breakthrough for the HDI was the creation of a single statistic which was to serve as a frame of reference for both social and economic development. The HDI sets a minimum and a maximum for each dimension, called goalposts, and then shows where each country stands in relation to these goalposts, expressed as a value between 0 and 1.It is also used to distinguish to a large extent, whether the country is a developed, a developing or an underdeveloped country, and also to measure the impact of economic policies on quality of life. NEED FOR HDI ————————————————- The HDI was created to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic gro wth alone. The HDI can also be used to question national policy choices, asking how two countries with the same level of GNI per capita can end up with such different human development outcomes.For example, the Bahamas and New Zealand have similar levels of income per person, but life expectancy and expected years of schooling differ greatly between the two countries, resulting in New Zealand having a much higher HDI value than the Bahamas. These striking contrasts can stimulate debate about government policy priorities. ————————————————- CALCULATION OF HDI 1) Life expectancy index (LEI) = (LE-20)/(83. 4-20) 2) Education index (EI) = v(MYSI*EYSI)/ 0. 951 3) Income Index (II) Log (GNIpc)-log(100)]/ [Log (107721) – log (100)] LE: Life expectancy at birth MYS: Mean years of schooling (Years that a 25-year-old person or older has spent in schools) EYS: Expected years of schooling (Years that a 5-year-old child will spend with his education in his whole life) ————————————————- GNIpc: Gross national income at purchasing power parity per capita COUNTRY| GDP RANK| HDI RANK| HDI| India| 4| 134| 0. 571| U. S| 1| 4| 0. 910| U. K| 8| 28| 0. 863| China| 2| 101| 0. 87| Pakistan | 29| 145| 0. 50| Oman| 77| 89| 0. 705| India ranks a low 134 among 187 countries in terms of the human development index (HDI), which assesses long-term progress in health, education and income indicators, said a UN report released on Wednesday. Although placed in the â€Å"medium† category, India's standing is way behind scores of economically less developed countries, including war-torn Iraq as well as Philippines. India’s ranking in 2010 was 119 out of 169 countries Sri Lanka has been ranked 97, China 101 and the Maldives 109.Bhutan, otherwise respected fo r its quality of life, has been placed at 141, behind India Pakistan and Bangladesh are ranked 145 and 146 in the list of countries that is headed by Norway and in which the Democratic Republic of Congress is at the bottom. The other two countries in South Asia, Nepal and Afghanistan, occupy ranks 157 and 172. According to the â€Å"UN Human Development Report, 2011: Sustainability and Inequality†, India’s HDI is 0. 5 compared to 0. 3 in 2010. COMPONENTS OF THE HUMAN DEVELOPMENT INDEXThe education component of the HDI is now measured by mean of years of schooling for adults aged 25 years and expected years of schooling for children of school entering age. Mean years of schooling are estimated based on educational attainment data from censuses and surveys available in the UNESCO Institute for Statistics database and Barro and Lee (2010) methodology). Expected years of schooling estimates are based on enrolment by age at all levels of education and population of official school age for each level of education.Expected years of schooling are capped at 18 years. The indicators are normalized using a minimum value of zero and maximum values are set to the actual observed maximum value of mean years of schooling from the countries in the time series, 1980–2010, that is 13. 1 years estimated for Czech Republic in 2005. Expected years of schooling are maximized by its cap at 18 years. The education index is the geometric mean of two indices. The life expectancy at birth component of the HDI is calculated using a minimum value of 20 years and maximum value of 83. 4 years.This is the observed maximum value of the indicators from the countries in the time series, 1980–2010. Thus, the longevity component for a country where life expectancy birth is 55 years would be 0. 552. For the wealth component, the goalpost for minimum income is $100 (PPP) and the maximum is $107,721 (PPP), both estimated during the same period, 1980-2011. The decent stand ard of living component is measured by GNI per capita (PPP$) instead of GDP per capita (PPP$) The HDI uses the logarithm of income, to reflect the diminishing importance of income with increasing GNI.The scores for the three HDI dimension indices are then aggregated into a composite index using geometric mean. The HDI facilitates instructive comparisons of the experiences within and between different countries. FACTORS AFFECTING HDI There are various factors that affect the economic development of any economy like health, education, per capita income, gender inequality, deforestation, population, pollution levels, literacy rate, infant mortality rate etc. Let us see a few of them one by one and try to find where India lags behind majority of the economies and why there is a mismatch in India’s growth and evelopment. A) Education index Education is an important indicator of a nation’s wellbeing, standard of living and is a measure of the economic development and quality of life which further helps in determining whether an economy is developed, developing or underdeveloped. India’s Shortfalls The Indian government has been lethargic in this aspect and has failed in ensuring a better education framework. Here, the government alone is not to be blamed. A majority of Indian population tend to neglect primary education. Poverty has been a major cause leading to lower literacy rates in India.Poor parents in underdeveloped states and backward regions make their children work to support the family financially. Girls in rural areas are forced to stay back at home and do daily chores. Also, education funding in rural areas is quite low. Uneducated parents don’t find it important to educate their children and this vicious cycle continues leaving the whole community uneducated. The government is not spending enough in education. Currently around 4% of GDP is being spent on education much lower than the target of 6% of GDP.Lower enrolment, high dropout rates, teacher absenteeism, poor instruction qualities, poor infrastructural facilities like classrooms, libraries, low encouragement and gender inequality are the root causes of low education index in India. About 30% of the world’s illiterate population belongs to India. COUNTRY| EDUCATION INDEX| India| 0. 450| The U. S| 0. 939| The U. K| 0. 815| Pakistan| 0. 386| China| 0. 623| Oman| 0. 539| SCALE| EDUCATION INDEX| Very High| 0. 894| High| 0. 715| Medium| 0. 561| Low| 0. 392| B) Health Index 2% of India’s children below the age of three are malnourished, almost twice the statistics of sub-Saharan African region of 28%. Although India’s economy grew 50% from 2001–2006, and its child-malnutrition rate only dropped 1%, lagging behind countries of similar growth rate. Malnutrition impedes the social and cognitive development of a child, reducing his educational attainment and income as an adult. These irreversible damages result in lower productivi ty. Infant mortality rate Approximately 1. 72 million children die each year before turning one.The under five mortality and infant mortality rates have been declining, from 202 and 190 deaths per thousand live births respectively in 1970 to 64 and 50 deaths per thousand live births in 2009. However, this rate of decline is slowing. Reduced funding for immunization leaves only 43. 5% of the young fully immunized. Infrastructure like hospitals, roads, water and sanitation are lacking in rural areas. Shortages of healthcare providers, poor intra-partum and newborn care, diarrheal diseases and acute respiratory infections also contribute to the high infant mortality rate.Inadequate safe drinking water Access to protected sources of drinking water has improved from 68% of the population in 1990 to 88% in 2008. However, only 26% of the slum population has access to safe drinking water,  and 25% of the total population has drinking water on their premises. This problem is exacerbated by falling levels of groundwater caused mainly by increasing extraction for irrigation. Insufficient maintenance of the environment around water sources, groundwater pollution, excessive arsenic and fluoride in drinking water pose a major threat to India's health. Rural healthRural India contains over 68% of India's total population with half of it living below  struggling for better and easy access to health care and services. Health issues confronted by rural people are diverse and many – from severe malaria to uncontrolled diabetes, from a badly infected wound to cancer. Postpartum maternal morbidity is a serious problem in resource-poor settings and contributes to maternal mortality, particularly in rural India; however, Misoprostal has been identified as a cost-effective maternal mortality intervention for home births. A study conducted in 2009, using multinomial logistic regression methods, found that 43. % of mothers reported to have experienced postpartum morbidities six weeks after delivery. Rural medical practitioners are highly sought after by people living in rural India as they more financially affordable and geographically accessible than practitioners working in the formal public health care sector. The  National Rural Health Mission  (NRHM) was launched in April 2005 by the Government of India. The goal of the NRHM is to provide effective healthcare to rural people with a focus on 18 states which have poor public health indicators and/or weak infrastructure. COUNTRY| HEALTH INDEX| India| 0. 717| The U. S| 0. 923| The U.K| 0. 949| Pakistan| 0. 717| China| 0. 843| Oman| 0. 836| SCALE| HEALTH INDEX| Very High| 0. 946| High| 0. 838| Medium| 0. 784| Low| 0. 611| C) GDP per capita (PPP) It is defined as GDP divided by the total population of a country. Per capita income is often used as a measure of the wealth of the population of a nation, particularly in comparison to other nations. The very fact that India in spite of being the 4th larg est economy stands 140th in terms of per capita income indicates that the income is distributed unevenly where a very percentage of the population is rich while majority is poor. COUNTRY| GDP per capita($)|India| 2933| The U. S| 41761| The U. K| 32147| Pakistan| 2369| China| 6200| Oman| 23333| COUNTRY| INCOME INDEX| India| 0. 508| The U. S| 0. 869| The U. K| 0. 832| Pakistan| 0. 464| China| 0. 618| Oman| 0. 778| Poverty in India  is widespread, with the nation estimated to have a third of the world's poor. In 2011,  World Bank  stated, 32. 7% of the total Indian people falls below the  international poverty line  of  US$  1. 25 per day (PPP) while 68. 7% live on less than  US$  2 per day. Lack of a market economy & over government regulation and red tape, known as License Raj is the main cause of poverty in India.While other Asian countries like China, Singapore and South Korea started with the same poverty level as India after independence, India adopted a soc ialist centrally planned, closed economy. Another cause is a high population growth rate, although demographers generally agree that this is a symptom rather than cause of poverty. While services and industry have grown at double digit figures, agriculture growth rate has dropped from 4. 8% to 2%. About sixty percent of the population depends on agriculture whereas the contribution of agriculture to the GDP is about eighteen percent.The surplus of labor in agriculture has caused many people to not have jobs. Farmers are a large vote bank and use their votes to resist reallocation of land for higher-income industrial projects. D) Gender Inequality Index There is strong evidence to suggest that India is a country of high concern in relation to missing women. The 2011 Census found a worrying trend in child sex ratios with only 914 females for 1,000 males, a drop from 927 in 2001. Using data from the 2011 Census in India, after adjusting for excess mortality rates in girls, the estimate s of number of selective abortions of girls rose from 0 to 2 million in the 1980s, to 1. to 4. 1 million in the 1990s, to 3. 1 to 6. 0 million in the 2000s. The study shows that the problem is in fact growing amongst the middle class which suggests that missing women cannot be attributed to poor socio-economic status. The male/female sex ratio for the total population in 2012 is 1. 08. According to data from the 2006-2007 Demographic and Health Survey for India, 41. 5% of girls and 45. 3% of boys under the age of two had received all their vaccinations. Under-five mortality rates were higher for girls than for boys (79. 2 per 1000 live births for girls, 69. % for boys), while malnutrition rates were equal or slightly higher for girls. Given that in most contexts, rates of under-five mortality and malnutrition are higher for boys than for girls, this would indicate bias towards sons in regard to early childhood care. Gender-disaggregated data in regard to child labor was unavailable. Primary and secondary school enrolment and attendance rates are lower for girls than for boys indicating some son preference in regard to access to education. COUNTRY| GENDER INEQUALITY INDEX| India| 0. 646| The U. S| 0. 311| The U. K| 0. 216| Pakistan| 0. 611| China| 0. 224| Oman| 0. 09| Conclusion â€Å"Economic growth† and â€Å"development† of any economy should go hand in hand unlike Indian economy where there is a huge contrast in this regard. India should focus on primary education, basic healthcare, gender equality and other social, environmental and economic aspects to ensure sustainable development. India has been very slow in reacting to the transformation of economy restructuring. Masses need to be educated about family planning, importance of education, gender inequality especially in rural areas so that they don’t take much time to adapt to an environment which is essential for development.Educational institutes should be set up on a large scale f ocusing more on basic education. Healthcare sector needs to be given prime importance. We need to take advantage of the technology available to us. Corruption is the biggest hindrance coming in the way of development and thus should be kept in check. India has till date come up with many schemes and programs for the poor section but has repeatedly failed to implement them effectively. So, while economic growth is vital to the economy, human development is to be given equal importance which decides or shows the true picture of the economy. Human Development Index What is HDI? The Human Development Index (HDI) is a composite statistic used to rank countries by level of â€Å"human development†, taken as a synonym of the older terms â€Å"standard of living† and/or â€Å"quality of life†, and distinguishing â€Å"very high human development†, â€Å"high human development†, â€Å"medium human development†, and â€Å"low human development† countries. HDI was devised and launched by Pakistani economist Mahbub ul Haq, followed by Indian economist Amartya Sen in 1990. The HDI is a comparative measure of life expectancy, literacy, education, and standards of living of a country.It is a standard means of measuring well-being, especially child welfare. It is also used to distinguish whether the country is a developed, a developing or an underdeveloped country, and also to measure the impact of economic policies on quality of life. There are also HDI for states, cities, villages, etc. by local organizatio ns or companies which have interest in the matter. The HDI formula result is a number from 0 to 1, 1 being the best outcome possible. Components of HDI What does HDI tell us?The HDI was created to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone. The HDI can also be used to question national policy choices, asking how two countries with the same level of GNI per capita can end up with such different human development outcomes. For example, the Bahamas and New Zealand have similar levels of income per person, but life expectancy and expected years of schooling differ greatly between the two countries, resulting in New Zealand having a much higher HDI value than the Bahamas.These striking contrasts can stimulate debate about government policy priorities. What are the criteria for a country to be included in the HDI? The Human Development Report Office strives to include as many UN member countries as possible in the HDI. To include a country in the HDI we need recent, reliable and comparable data for all three dimensions of the Index. For a country to be included, statistics should ideally be available from the relevant international data agencies. India’s position in the worldIndia ranks a low 134 among 187 countries in the list that is headed by Norway and in which the Democratic Republic of Congo is at the very bottom in terms of the human development index (HDI). India's ranking in 2010 was 119 out of 169 countries. According to the â€Å"UN Human Development Report 2011: Sustainability and Inequality†, India's HDI is 0. 5 compared to 0. 3 in 2010. Comparison of India with few other countries Countries| Per Capita income in US $| Literacy Rate| Life Expectancy in years| HDI Rank| India| 1600| 74%| 67. 1| 134|US| 48,147| 99%| 79| 4| Canada| 51,147| 99%| 80. 7| 6| Germany| 40,631| 99%| 79. 4| 9| Nepal| 650| 68. 2%| 66. 5| 157| Pakistan| 1250| 70%| 66 . 3| 145| Growth Pattern of India Factors responsible for growth of India The then Prime Minister Narasimha Rao, along with his finance minister Manmohan Singh, initiated the economic liberalization of 1991. The reforms did away with the Licence Raj, reduced tariffs and interest rates and ended many public monopolies, allowing automatic approval of foreign direct investment in many sectors.Since then, the overall thrust of liberalization has remained the same, although no government has tried to take on powerful lobbies such as trade unions and farmers, on contentious issues such as reforming labour laws and reducing agricultural subsidies. By the turn of the 20th century, India had progressed towards a free-market economy, with a substantial reduction in state control of the economy and increased financial liberalization. This has been accompanied by increases in life expectancy, literacy rates and food security, although urban residents have benefited more than agricultural reside nts.Also the boom in IT and other industries in services sector helped India to achieve economic strength whereby foreign currency started pouring in into the market. This was supported by the availability of skilled labours, talented brains and large young population. Growth Pattern of Nepal Nepal’s economic growth continues to be adversely affected by the political uncertainty. Nevertheless, real GDP growth is estimated to increase to almost 5 percent for 2011/2012. This is a considerable improvement from the 3. 5 percent GDP growth in 2010/2011 and would be the second highest growth rate in the post-conflict era.Sources of growth include agriculture, construction, financial and other services. The contribution of growth by consumption fueled by remittances has declined since 2010/2011. While remittance growth slowed to 11 percent (in Nepali Rupee terms) in 2010/2011 it has since increased to 37 percent. Remittances are estimated to be equivalent to 25-30 percent of GDP. In flation has been reduced to a three-year low to 7 percent. The proportion of poor people has declined substantially in recent years. The percentage of people living below the international poverty line (people earning less than US$1. 5 per day) has halved in only seven years. At this measure of poverty the percentage of poor people declined from 53. 1% in 2003/2004 to 24. 8% in 2010/2011. With a higher poverty line of US$2 dollars per-capita per day, poverty declined by one quarter to 57. 3%. However, the income distribution remains grossly uneven. Growth Pattern of Canada Factors responsible for growth in Canada The Canadian economy improved dramatically after 1896, and from that year until 1914, Canada had the world's fastest growing economy. The west was settled, the population grew quickly.The cause of this boom is debated. Whether the settlement of the west was a cause or effect of the boom is one of the most important issues. Globally the economy was improving with the end of the Long Depression. The last semi-humid farmland in the United States was exhausted, leaving Canada with the best unexploited farm land in North America. Technological changes from the steel plow to combine harvesters played an important role, but perhaps the most important development was the practice of dry farming that allowed farmers to profitably grow wheat on the semi-arid southern prairies.The most noted expansion was in western Canada, but at the same time Central Canada was undergoing a period of significant industrialization. While western and central Canada boomed during the pre-World War I years the economies of the three Maritime Provinces grew far more slowly. Investors from US and UK helped fuel country’s economic growth. Growth pattern of USA Factors responsible for growth in USA In the early years of American history, most political leaders were reluctant to involve the federal government too heavily in the private sector, except in the area of transportatio n.In general, they accepted the concept of laissez-faire, a doctrine opposing government interference in the economy except to maintain law and order. This attitude started to change during the latter part of the 19th century, when small business, farm, and labor movements began asking the government to intercede on their behalf. By the turn of the century, a middle class had developed that was leery of both the business elite and the somewhat radical political movements of farmers and laborers in the Midwest and West.Known as Progressives, these people favored government regulation of business practices to, in their minds, ensure competition and free enterprise. Congress enacted a law regulating railroads in 1887 (the Interstate Commerce Act), and one preventing large firms from controlling a single industry in 1890 (the Sherman Antitrust Act). Many of today's U. S. regulatory agencies were created during these years, including the Interstate Commerce Commission and the Federal Tra de Commission. Electrification in the U. S. started in industry ca. 1900 and by 1930 about 80% of power used in industry was electric.Tractors began being mass-produced. In the 1980s, Japan was accelerating its speed and catching up to the USA. In the face of competition from Japan, Americans did not give up hope, but acted with a great sense of urgency. Ronald Reagan called on the industrial association and think-tanks to discuss countermeasures. Through investigation and analysis, they found that the computer and communications industries were beginning to show vitality and had large market potential. In the future, it was possible that they would develop into the world's largest industries.Therefore, the Reagan administration declined to adopt a short-term, profit-oriented competition strategy; rather, it adopted methods that allowed universities to work collaboratively with enterprises to co-develop the computer and communications industries. During the Clinton administration, a large investment was made in building up the world’s internet highway. Growth Pattern of Pakistan Growth Pattern of Germany Factors responsible for growth of Germany Germany's economic growth stemmed from a number of causes. One of the main physical reasons behind economic growth was the sophistication of infrastructure.Between 1845 and 1870 5000 more miles of rail had beenbuilt and in 1850 Germany was building her own locomotives. This increase of rail transport created a huge demand for coal, iron and buildings, therefore industry began on a plant style level. All of this increased the amount of labour needed. The labour need was fuelled by a population growth. From 35 million people in 1840 Germanygrew to 49 million people in 1875 creating a young dynamic workforce,full of innovated ideas for the new industry. Not only was the workforce gained from a population increase, urbanisation also added to the need.People working in factories grew from 4% to 10%. Banks, particular ly investment banks gave a great stimulus to industrialization. It was a combination of commercial enterprise, investment, and investment trusts backed by large central banks. The second industrial revolution was promoted by a number of important factors. Most important of these was probably the scientific-technological developments at the end of the century. Another factor which propelled German industry forward was the unification of the monetary system, made possible in part by political unification.Another economic factor was the increased markets,domestic and overseas. Comparison of growth patterns Why HDI of India is low? While we are steadily increasing our investments in health and education, we have been let down at the most basic level: female mortality rates. Our maternal mortality figures are 450 deaths per 100,000, which is the worst in south Asia. Our adolescent fertility rates also let us down, as do figures for female education. Yet, a quick stroll through the HDI fi gures does show some improvement across sectors in most parts of the country.The stumbling blocks are Uttar Pradesh, Bihar, Madhya Pradesh, Jharkhand, Chhattisgarh, parts of West Bengal and even Maharashtra. Quite obviously, in our race to get ahead, we have forgotten the basics. It has taken us over 60 years since the Constitution was adopted to pass the Right to Education Act for free and compulsory secondary education to all, even though it has long been a part of our Directive Principles. Our dropout rate is high and the girl child is the first to lose the race to school. More painful is the rich-poor divide.Our cities may be full of state-of-the-art hospitals, ready to cater to medical tourists, but village after village in India does not even have access to primary health care. We supply doctors all over the world but are unable to service our own needy. It is almost as if we have got so used to being a poor country that we hardly notice it any more. But as the Sensex and the economy show, India is no longer an ultra-poor country in the aggregate. But we still have a shockingly large proportion of poor people who are being deprived of just about everything.This HDI report is just one more reminder of how far we have to go. It tells us where our priorities should be. India has made huge strides in the field of education and water supply system but the biggest block in the human development indices for India is in the field of sanitation where 58 per cent of open defecation in the world takes place in India. A mere expenditure of Rs 2000 crore (Rs 20 billion) in the field of sanitation is being made while the budget for water supply was Rs 20,000 crore (Rs 200 billion). AgricultureSlow agricultural growth is a concern for policymakers as some two-thirds of India’s people depend on rural employment for a living. Current agricultural practices are neither economically nor environmentally sustainable and India's yields for many agricultural commodities are low. Poorly maintained irrigation systems and almost universal lack of good extension services are among the factors responsible. Farmers' access to markets is hampered by poor roads, rudimentary market infrastructure, and excessive regulation. Agricultural output of India lags far behind its potential.The low productivity in India is a result of several factors. According to the World Bank, India's large agricultural subsidies are hampering productivity-enhancing investment. While overregulation of agriculture has increased costs, price risks and uncertainty, governmental intervention in labour, land, and credit markets are hurting the market. Infrastructure such as rural roads, electricity, ports, food storage, retail markets and services are inadequate. Further, the average size of land holdings is very small, with 70% of holdings being less than one hectare in size.The partial failure of land reforms in many states, exacerbated by poorly maintained or non-existent land reco rds, has resulted in sharecropping with cultivators lacking ownership rights, and consequently low productivity of labour. Adoption of modern agricultural practices and use of technology is inadequate, hampered by ignorance of such practices, high costs, illiteracy, slow progress in implementing land reforms, inadequate or inefficient finance and marketing services for farm produce and impracticality in the case of small land holdings. The allocation of water is inefficient, unsustainable and inequitable.The irrigation infrastructure is deteriorating. Irrigation facilities are inadequate, as revealed by the fact that only 39% of the total cultivable land was irrigated as of 2010, resulting in farmers still being dependent on rainfall, specifically the monsoon season, which is often inconsistent and unevenly distributed across the country. Corruption Corruption has been one of the pervasive problems affecting India. A 2005 study by Transparency International (TI) found that more than half of those surveyed had firsthand experience of paying bribe or peddling influence to get a job done in a public office in the previous year.A follow-on 2008 TI study found this rate to be 40 percent. In 2011, Transparency International ranked India at 95th place amongst 183 countries in perceived levels of public sector corruption. In 1996, red tape, bureaucracy and the Licence Raj were suggested as a cause for the institutionalised corruption and inefficiency. More recent reports suggest the causes of corruption in India include excessive regulations and approval requirements, mandated spending programs, monopoly of certain goods and service providers by government controlled institutions, bureaucracy with discretionary powers, and lack of transparent laws and processes.The Right to Information Act (2005) which requires government officials to furnish information requested by citizens or face punitive action, computerisation of services, and various central and state governmen t acts that established vigilance commissions, have considerably reduced corruption and opened up avenues to redress grievances. The number of people employed in non-agricultural occupations in the public and private sectors. Totals are rounded. Private sector data relates to non-agriculture establishments with 10 or more employees. The current government has concluded that most spending fails to reach its intended recipients.A large, cumbersome and tumor-like bureaucracy sponges up or siphons off spending budgets. India's absence rates are one of the worst in the world; one study found that 25% of public sector teachers and 40% of public sector medical workers could not be found at the workplace. The Indian economy has an underground economy, with an alleged 2006 report by the Swiss Bankers Association suggesting India topped the worldwide list for black money with almost $1,456 billion stashed in Swiss banks. This amounts to 13 times the country's total external debt. EducationInd ia has made huge progress in terms of increasing primary education attendance rate and expanding literacy to approximately three-fourth of the population. India's literacy rate had grown from 52. 2% in 1991 to 74. 04% in 2011. The right to education at elementary level has been made one of the fundamental rights under the eighty-sixth Amendment of 2002, and legislation has been enacted to further the objective of providing free education to all children. However, the literacy rate of 74% is still lower than the worldwide average and the country suffers from a high dropout rate.Further, there exists a severe disparity in literacy rates and educational opportunities between males and females, urban and rural areas, and among different social groups. Infrastructure In the past, development of infrastructure was completely in the hands of the public sector and was plagued by slow progress, poor quality and inefficiency. India's low spending on power, construction, transportation, teleco mmunications and real estate, at $31 billion or 6% of GDP in 2002 had prevented India from sustaining higher growth rates.This has prompted the government to partially open up infrastructure to the private sector allowing foreign investment, and most public infrastructure, barring railways, is today constructed and maintained by private contractors, in exchange for tax and other concessions from the government. While 80% of Indian villages have at least an electricity line, just 44% of rural households have access to electricity. Some half of the electricity is stolen, compared with 3% in China. The stolen electricity amounts to 1. 5% of GDP.Transmission and distribution losses amount to around 20%, as a result of an inefficient distribution system, handled mostly by cash-strapped state-run enterprises. Almost all of the electricity in India is produced by the public sector. Power outages are common, and many buy their own power generators to ensure electricity supply. 6] Substantia l improvements in water supply infrastructure, both in urban and rural areas, have taken place over the past decade, with the proportion of the population having access to safe drinking water rising from 66% in 1991 to 92% in 2001 in rural areas, and from 82% to 98% in urban areas.However, quality and availability of water supply remains a major problem even in urban India, with most cities getting water for only a few hours during the day. Economic disparities A critical problem facing India's economy is the sharp and growing regional variations among India's different states and territories in terms of poverty, availability of infrastructure and socio-economic development. Six low-income states – Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa and Uttar Pradesh – are home to more than one third of India's population.Severe disparities exist among states in terms of income, literacy rates, life expectancy and living conditions. The five-year plans, especially i n the pre-liberalization era, attempted to reduce regional disparities by encouraging industrial development in the interior regions and distributing industries across states, but the results have not been very encouraging since these measures in fact increased inefficiency and hampered effective industrial growth.After liberalization, the more advanced states have been better placed to benefit from them, with well-developed infrastructure and an educated and skilled workforce, which attract the manufacturing and service sectors. The governments of backward regions are trying to reduce disparities by offering tax holidays and cheap land, and focusing more on sectors like tourism which, although being geographically and historically determined, can become a source of growth and develops faster than other sectors.In fact, the economists fail to realize that ultimately the problem of equitable growth or inclusive growth is intricately related to the problems of good governance and tran sparency. HDI for Indian states State| HDI| Rank| Maharashtra| 0. 689| 12| Madhya Pradesh| 0. 375| 33| Kerala| 0. 921| 1| Reasons for low HDI in Madhya Pradesh and Maharashtra as compared to Kerala: Life Expectancy: The life expectancy in MP is 56. 5 years for male and 56. 2 years for females averaging around 56. 4. The life expectancy in Maharashtra is 64. 5 for males and 67 for females averaging to 65. 8 years for the total population.The life expectancy in Kerala is 73. 5 years. As an important component of HDI life expectancy should be higher, but here it is low as compared to Kerala. Literacy rate: The literacy rate in MP is only 64. 11% which is very low. More than that literacy rate of women is very low. The literacy rate in Maharashtra is 77. 21 % whereas in Kerala it is 90. 92 %. Literacy is reasonably a good indicator of development in a society. Spread and diffusion f literacy is generally associated with essential trait of today’s civilization such as urbanization , modernization, industrialization, communication and commerce.Standard of living: The main factors influencing standard of living are poverty, physical infrastructure, regional imbalance. Poverty is very high in MP. Also the physical infrastructure is very poor. Poverty is high I Maharashtra because of high population. The physical infrastructure varies from region to region. In cities like Mumbai and Pune the infrastructure is world class, but in other regions of the state the infrastructure is not so good which shows regional imbalance Poverty in Kerala is very low. All over Kerala the physical infrastructure is good, there is no regional imbalance. Human Development Index Introduction: The Human Development Index (HDI) is a composite statistic used to rank countries by level of â€Å"human development† and separate â€Å"very high human development†, â€Å"high human development†, â€Å"medium human development†, and â€Å"low human development† countries. The Human Development Index (HDI) is a comparative measure of life expectancy, literacy, education and standards of living for countries worldwide. It is a standard means of measuring well-being, especially child welfare. It is used to distinguish whether the country is a developed, a developing or an under-developed country, and also to measure the impact of economic policies on quality of life. There are also HDI for states, cities, villages, etc. by local organizations or companies. Background: The origins of the HDI are found in the annual Human Development Reports of the United Nations Development Programme (UNDP). These were devised and launched by Pakistani economist Mahbub ul Haq in 1990 and had the explicit purpose ‘‘to shift the focus of development economics from national income accounting to people centered policies’’. To produce the Human Development Reports, Mahbub ul Haq brought together a group of well-known development economists including: Paul Streeten, Frances Stewart, Gustav Ranis, Keith Griffin, Sudhir Anand and Meghnad Desai. But it was Nobel laureate Amartya Sen’s work on capabilities and functionings that provided the underlying conceptual framework. Haq was sure that a simple composite measure of human development was needed in order to convince the public, academics, and policy-makers that they can and should evaluate development not only by economic advances but also improvements in human well-being. Sen initially opposed this idea, but he went on to help Haq develop the Human Development Index (HDI). Sen was worried that it was difficult to capture the full complexity of human capabilities in a single index but Haq persuaded him that only a single number would shift the attention of policy-makers from concentration on economic to human well-being. Data collection: Life expectancy at birth is provided by the UN Department of Economic and Social Affairs; mean years of schooling by Barro and Lee (2010); expected years of schooling by the UNESCO Institute for Statistics; and GNI per capita by the World Bank and the International Monetary Fund. For few countries, mean years of schooling are estimated from nationally representative household surveys. Many data gaps still exist in even some very basic areas of human development indicators. While actively advocating for the improvement of human development data, as a principle and for practical reasons, the Human Development Report Office does not collect data directly from countries or make estimates to fill these data gaps in the Report. Dimensions and calculation: Published on 4 November 2010, starting with the 2010 Human Development Report the HDI combines three dimensions: 1. A long and healthy life: Life expectancy at birth 2. Access to knowledge: Mean years of schooling and Expected years of schooling 3. A decent standard of living: GNI per capita (PPP US$) The HDI combined three dimensions up until its 2010 report: 1. Life expectancy at birth, as an index of population health and longevity 2. Knowledge and education, as measured by the adult literacy rate (with two-thirds weighting) and the combined primary, secondary, and tertiary gross enrollment ratio (with one-third weighting). 3. Standard of living, as indicated by the natural logarithm of gross domestic product per capita at purchasing power parity. New methodology for 2010 data onwards: In its 2010 Human Development Report the UNDP began using a new method of calculating the HDI. The following three indices are used: LE ¬-20 1. Life Expectancy Index (LEI) = 63. 2 vMYSI . EYSI 2. Education Index (EI) = 0. 951 ln (GNIpc) – ln (163) 3. Income Index (II) = ln(108,211) – ln (163) Finally, the HDI is the geometric mean of the previous three normalized indices: HDI = v LEI . EI . II 2010 report: The 2010 Human Development Report by the United Nations Development Program was released on November 4, 2010, and calculates HDI values based on estimates for 2010. Criticisms: The Human Development Index has been criticised on a number of grounds, including failure to include any ecological considerations, focusing exclusively on national performance and ranking (although many national Human Development Reports, looking at subnational performance, have been published by UNDP and others—so this last claim is untrue), not paying much attention to development from a global perspective and based on grounds of measurement error of the underlying statistics and formula changes by the UNDP which can lead to severe misclassifications of countries in the categories of being a ‘low', ‘medium', ‘high' or ‘very high' human evelopment country. Other authors claimed that the Human Development Reports â€Å"have lost touch with their original vision and the index fails to capture the essence of the world it seeks to portray†. The index has also been criticized as â€Å"redundant† and a â€Å"reinvention of the wheel†, m easuring aspects of development that have already been exhaustively studied. The index has further been criticised for having an inappropriate treatment of income, lacking year-to-year comparability, and assessing development differently in different groups of countries. Economist Bryan Caplan has criticised the way HDI scores are produced; each of the three components are bounded between zero and one. As a result of that, rich countries effectively cannot improve their rating (and thus their ranking relative to other countries) in certain categories, even though there is a lot of scope for economic growth and longevity left. â€Å"This effectively means that a country of immortals with infinite per-capita GDP would get a score of . 66 (lower than South Africa and Tajikistan) if its population were illiterate and never went to school. † He argues, â€Å"Scandinavia comes out on top according to the HDI because the HDI is basically a measure of how Scandinavian your country is. † Economists Hendrik Wolff, Howard Chong and Maximilian Auffhammer discuss the HDI from the perspective of data error in the underlying health, education and income statistics used to construct the HDI. 18] They identify three sources of data error which are due t o (i) data updating, (ii) formula revisions and (iii) thresholds to classify a country’s development status and find that 11%, 21% and 34% of all countries can be interpreted as currently misclassified in the development bins due to the three sources of data error, respectively. The authors suggest that the United Nations should discontinue the practice of classifying countries into development bins because the cut-off values seem arbitrary, can provide incentives for strategic behavior in reporting official statistics, and have the potential to misguide politicians, investors, charity donators and the public at large which use the HDI. In 2010 the UNDP reacted to the criticism and updated the thresholds to classify nations as low, medium and high human development countries. In a comment to The Economist in early January 2011, the Human Development Report Office responded[24] to a January 6, 2011 article in The Economist which discusses the Wolff et al. paper. The Human Development Report Office states that they undertook a systematic revision of the methods used for the calculation of the HDI and that the new methodology directly addresses the critique by Wolff et al. in that it generates a system for continuous updating of the human development categories whenever formula or data revisions take place. The following are common criticisms directed at the HDI: that it is a redundant measure that adds little to the value of the individual measures composing it; that it is a means to provide legitimacy to arbitrary weightings of a few aspects of social development; that it is a number producing a relative ranking which is useless for inter-temporal comparisons, and difficult to compare a country's progress or regression since the HDI for a country in a given year depends on the levels of, say, life expectancy or GDP per capita of other countries in that year. However, each year, UN member states are listed and ranked according to the computed HDI. If high, the rank in the list can be easily used as a means of national aggrandizement; alternatively, if low, it can be used to highlight national insufficiencies. Using the HDI as an absolute index of social welfare, some authors have used panel HDI data to measure the impact of economic policies on quality of life. Ratan Lal Basu criticises the HDI concept from a completely different angle. According to him the Amartya Sen-Mahbub ul Haq concept of HDI considers that provision of material amenities alone would bring about Human Development, but Basu opines that Human Development in the true sense should embrace both material and moral development. According to him human development based on HDI alone, is similar to dairy farm economics to improve dairy farm output. To quote: ‘So human development effort should not end up in amelioration of material deprivations alone: it must undertake to bring about spiritual and moral development to assist the biped to become truly human. [31] For example, a high suicide rate would bring the index down. A few authors have proposed alternative indices to address some of the index's shortcomings. However, of those proposed alternatives to the HDI, few have produced alternatives covering so many countries, and that no development index (other than, perhaps, Gross Domestic Product per capita) has been used so extensively—or ef fectively, in discussions and developmental planning as the HDI. However, there has been one lament about the HDI that has resulted in an alternative index: David Hastings, of the United Nations Economic and Social Commission for Asia and the Pacific published a report geographically extending the HDI to 230+ economies, whereas the UNDP HDI for 2009 enumerates 182 economies and coverage for the 2010 HDI dropped to 169 countries