By Janak Raj & Indramani Tiwari, Senior Fellow and Research Analyst, Centre for Social and Economic Progress
Human development index (HDI)—comprising income, health, and education elements—introduced by the United Nations Development Programme in 1990 has become a key indicator to gauge human development in a country. However, HDI does not tell a complete story about human development as it covers only quantitative elements like economic growth (for income), numbers of schooling years (education), and life expectancy at birth (health). For instance, despite a rise in enrolment rates in rural schools—from 96.7% in 2011 to 98.4% in 2022—less than half of Class 8 students could not perform basic division, a function expected of a Class 4 students. Likewise, per capita income of India grew 2.67 times between 2011-12 and 2022-23. But the top 1% of India’s population was earning Rs 53 lakh on an average in 2022-23, and the bottom 50% only Rs 71,000. These qualitative aspects remain invisible in traditional HDI.
To unravel a true picture of human development, our recently released study titled “India’s Human Development: How Do Quality-adjusted Elements Change the Picture?” computes quality-adjusted HDI at the state level for three years—2011-12, 2017-18, and 2021-22. All three components of HDI were adjusted for quality—the health index was adjusted for disability, the income index for income inequality, and education index for reading and mathematical abilities of students.
The results suggest that all three elements of HDI as well as the composite HDI underperform significantly vis-à-vis their traditional counterparts in all the states in all the three years, though the focus of analysis is 2021-22 (the latest year for which data is available). The largest gap between the quality-adjusted HDI (Q-HDI) and HDI was observed in Kerala (0.22 points, 0.53 Q-HDI versus 0.75 HDI), followed by Punjab and Maharashtra (0.20 points each) and Himachal Pradesh (0.19 points). The divergence between the two indices was the least in Bihar (0.12, 0.45 Q-HDI versus 0.57 HDI), followed by Tripura (0.13 points), Madhya Pradesh, and Uttar Pradesh (0.14 points each). In all other states, the divergences between the two indices were significant in the range of 0.15 points to 0.18 points.
Of all the three elements, the largest disparity was observed in the quality-adjusted education index, which combines learning outcomes with the number of schooling years. The largest gap between the quality-adjusted education index and the traditional education index was in Kerala (0.33 points, quality-adjusted education index at 0.38 vis-à-vis 0.71 education index), followed by Himachal Pradesh and Manipur (0.30 points each), Nagaland (0.27 points), and Maharashtra (0.26 points). The divegence between the quality-adjusted education index and traditional education index was the lowest in Gujarat (0.10 points). The other states with low gaps between the two indices were economically weaker ones such as Bihar and Tripura (0.12 points each) and Jharkhand (0.14 points).
Adjusted for inequality, the income component of HDI showed significant disparities, particularly in economically advanced states. Maharashtra exhibited the largest drop in quality-adjusted income (0.26 points, to 0.42 from 0.68), followed by Karnataka, Haryana, and Punjab (0.23 points each). In contrast, economically weaker states like Bihar (0.16 points, to 0.38 from 0.54) and Assam (0.17 points) showed relatively smaller gaps between quality-adjusted and traditional income indices. The gap in all other states fell within the range of 0.18-0.22 points.
The health index, when adjusted for disabilities, showed relatively smaller disparities compared to traditional indices. However, notable differences were observed in states like West Bengal and Sikkim (0.08 points each, to 0.68 from 0.76, and to 0.71 from 0.79, respectively), and Tripura (0.07 points). In contrast, states like Himachal Pradesh, Nagaland, Jammu and Kashmir, Uttarakhand, and Mizoram showed negligible gaps between the two measures. All other states reported minor gaps, ranging from 0.01 to 0.06 points.
The rankings of states exhibit significant shifts due to quality adjustments, underlining the extent to which conventional measures can obscure critical dimensions of human development. For instance, Gujarat moves up from the 16th position in HDI to 4th place in Q-HDI, Tamil Nadu from 9th to 2nd, Tripura from 18th to 12th, and Bihar from 26th to 20th. On the other hand, the rankings of several other states declined. These included Maharashtra (from 7th position to 15th),. Manipur (from 10th to 18th), and Punjab (from 5th to 13th). Some states such as Rajasthan, Assam, and Jharkhand retained their rankings at 16th, 21st, and 25th positions, respectively, indicating a relative consistency in their performance even after quality adjustments.
Traditional metrics like HDI have limitations, as they overlook qualitative aspects of human development. This is where Q-HDI becomes crucial. It provides a more nuanced understanding by incorporating quality aspects of health, education, and economic opportunities. Focusing on these qualitative aspects is critical for India’s growth, as it can help achieve more sustainable and inclusive development, ultimately contributing to its vision of becoming a developed nation or Viksit Bharat.