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India's Human Development Index loss due to inequality higher than most South Asian, BRICS countries

By Rajiv Shah
Fresh data released by the United Nations Development Programme (UNDP), released this month, show that while India ranks 130 out of 189 countries in human development index (HDI), with HDI value of 0.640 on a scale of 1, this is “below the average of 0.645 for countries in the medium human development group”, even though it is “above the average of 0.638 for countries in South Asia.”
The briefing note on India for the UNDP’s “2018 Statistical Update” says, however, that when one adjusts inequality, things below South Asian average. Thus, while India’s overall HDI for 2017 is 0.640, “when the value is discounted for inequality, the HDI (which is called Inequality-adjusted HDI or IHDI) falls to 0.468, a loss of 26.8 percent due to inequality in the distribution of the HDI dimension indices.”
The note underlines, as against India’s 26.8 percent loss, the “average loss due to inequality for medium HDI countries is 25.1 percent and for South Asia it is 26.1 percent.”
According to the briefing note, HDI is counted as “a summary measure for assessing long-term progress in three basic dimensions of human development: a long and healthy life, access to knowledge and a decent standard of living.”
A long and healthy life is “measured by life expectancy”, the note says, adding, “knowledge level is measured by mean years of education among the adult population, which is the average number of years of education received in a life-time by people aged 25 years and older…”
As for standard of living, it is “measured by Gross National Income (GNI) per capita expressed in constant 2011 international dollars converted using purchasing power parity (PPP) conversion rates.”
IHDI, which takes into account inequality in all three dimensions of the HDI by ‘discounting’ each dimension’s average value according to its level of inequality.
Says the note, “The IHDI is basically the HDI discounted for inequalities. The ‘loss’ in human development due to inequality is given by the difference between the HDI and the IHDI, and is “expressed as a percentage. As the inequality in a country increases, the loss in human development also increases.”
Thus, India’s HDI value for 2017, 0.640, UNDP data show, is, no doubt, better than other neighbouring countries, with the sole exception of Sri Lanka. Thus, ranking 76, Sri Lanka’s HDI value is 0.770; of Bangladesh, which ranks 136, it is 0.608; of Myanmar, which ranks 148, it is 0.578, of Nepal, which ranks 149, it is 0.574; and of Pakistan, which ranks 150, worst in South Asia, it is 0.562.
However, when it comes to inequality-adjusted HDI or IHDI, India’s loss (26.8 percent) is the next only to Pakistan. The lowest loss is that of Sri Lanka, 13.8 percent, followed by Myanmar 19.4 percent, Bangladesh 24.1 percent, Nepal 25.6 percent, and Pakistan, the highest, 31 percent. The result is that, the IHDI of at least two countries reaches very near to that of India (0.468) – Bangladesh 0.462 and Myanmar 0.466 -- while Sri Lanka’s IHDI remains very high, 0.644.
Coming to the BRICS (Brazil, Russia, India, China and South Africa) countries, with whom India’s economy is generally compared, the HDI ranking is very higher than that of India. Thus, South Africa’s ranking is 113, of Brazil 79, of China 86, and of Russia 49. And if one calculates by taking into account inequality, the loss in IHDI is the highest in South Africa 33.2 percent, followed by India 26.8 percent, Brazil 23.9 percent, China 14.5 percent, and Russia just 9.5 percent.



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