HDR 2006 and India

The Human Development Report for the year 2006 has been released. This year’s HDI refers to 2004.India has moved one step up to be ranked 126 among a total of 177 countries. [Last year India was ranked 127] India’s HDI rank falls under the category of ‘medium human development countries’.

The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and enrolment at the primary, secondary and tertiary level) and having a decent standard of living (measured by purchasing power parity, PPP, income). The index is not in any sense a comprehensive measure of human development. It does not, for example, include important indicators such as inequality and difficult to measure indicators like respect for human rights and political freedoms. What it does provide is a broadened prism for viewing human progress and the complex relationship between income and well-being. Read more on HDI here.

HDI Rankings

Norway is ranked first in this year’s HDR report, while the USA is ranked 8th, Japan 7th, China 81st and Pakistan 134th. And Niger is ranked last at 177.

India: Human Development [A few indicators]

1) HDI Rank: 126

2) The population below income poverty line of 2$ per day is 79.9%, though as per the national poverty line it is 28.6%.

3) The HPI (Human Poverty Index) for the 102 developing countries rank India at 55.

4) The Annual Population growth rate is pegged at a rate of 1.3%. [2004-15]

5) The Public health expenditure of India as a percentage of GDP is 1.2%, while that of the private is 3.6%. [2003]

6) The percentage of total population who are undernourished is 20%. [2001/03]

7) Life expectancy at birth: 63.1 [2000-05]

8] Infant mortality rate per 1000 live births: 62 [2004]

9) The public expenditure on Education as a per cent of GDP is 3.3% [2002-04] which has fallen from 3.7% in 1991.

An irony

‘Only 25% of the poorest households in developing countries have access to piped water in their homes as compared to 85% of the richest households.’ Says HDR 2006.

The same report states that only 14% of people in India lack access to an improved water source. This implies that 86% of people in India have access to improved water, thereby rendering India almost in par with developed countries in terms of access to an improved water source. This figure has been definitely deflated. One of the major reasons for this deflated figure is due to lack of adequate and complete statistics.


The HDI alone or the GDP alone cannot give the real picture of any economy. Both the HDI and the GDP do not take into account the inequalities. India is a country which is characterised by stark inequalities in wealth, income, education, health, land etc. India is the land of the billionaires as well as people who go hungry everyday and the land where little children are forced to work.

The authorities’ rhetoric of trickle down effects of an 8% GDP will not work, due to lack of proper institutions to cater to the needs of the poor. Microfinance, an institution which is working needs to be implemented more effectively and in a transparent manner, because the misuse of Microfinance institutions can lead to more trouble than not having them at all.

The main focus of this year’s HDR is on the Water Crisis which is plaguing countries both developed and developing alike. Adverse effects of pollution, increased green house gases can be witnessed in unanticipated floods and droughts plaguing many countries. And in the last few years, we had to face the Tsunami which wreaked havoc. According to Developments, “97% of all the deaths from natural disasters are in poor countries”.

The Indian populace has been repeatedly told that India is reducing its poverty and that it is well under 30%. They are right. [According to the official poverty line of a dollar per day] But keeping in mind the needs of the people for a decent livelihood, a family needs at least an income of 2000 rupees per month!

On the whole, there is nothing in the report that makes India proud. India needs to step up its expenditure specifically targeting education and health sectors. The draft to the 11th 5 year plan, speaks about inclusive growth, but adequate emphasis has not been given to sectors which need development.


1) Human Development Report 2006

Author: Alex M Thomas

A passionate student of economics!

15 thoughts on “HDR 2006 and India”

  1. Alex,
    This piece of news should be on every news station in India. Instead what we see is the banality of Indian Bollywood news. I feel that the minds of mainstream Indians, even those who make a decent income, are hijacked by Bollywood and the like. What a shame!
    This report should also serve as a stark reminder to the UPA govt. Macro-economically speaking, things look much brighter. The Manmohan Singh Govt. has been beating the GDP drums for quite sometime now. However, growth that is not spread across the majority is not really growth.

  2. Mohit,

    You are right. The fact is that, projecting a exuberant scenario is not hard these days with wider coverage of the media. [With the assistance of recurring news about the SENSEX crossing 10000, 11000 etc; Investors, especially small investors get beguiled by these ‘news’. Most of the profits go to the FII’s as they have a predominant share in the market, and when they sell, the small domestic investors lose.]

    Moreover, the significance of inequality is not given much thought, instead all the ‘hype’ is on the GDP.

    In fact, a professor told me that, if divorce rates in a country increases, then the GDP would increase too. 🙂

  3. I agree with alex and mohit that GDP growth is no measure for a country overall development is indicated by the HDI rankings. GDP is moreover only about “goods and services” not about issues related to economic disparity in income, education and basic health. A new luxury car produced today will increase the country GDP but does nothing to the country’s human development index. As for the SENSEX its mostly to do with investor sentiments/expectations.

    To just measure our growth by the sensex and the number of shopping malls and multiplexes is not a healthy way to go forward.

  4. Dear Mr. Alex Thomas,
    i request you to allow us to publish your review of HDI in our next issue of CATALYST FOR HUMAN DEVELOPMENT.
    I wish to draw your attention to Catalyst for Human Development magazine. The magazine?s goal is to create a platform for NGO movement. The first issue was launched in January, 2006. Since then three more issues have been published. Electronic versions of all three issues can be seen at http://www.afhd.org.
    The magazine is published by Association for Human Development, (A 501(c) (3) Non-Profit Organization Federal Tax ID: 20-1848083) based in New York.
    Ashoka Innovators For The Public is the theme of the third issue which is published in October. It has articles by several Ashoka Fellows discussing their projects in India. The founder of Ashoka, Bill Drayton has an article on how every one can be a change maker. Articles by Ashkoa Fellows show how a true social entrepreneur is a visionary who does not just build a new school or clinic but instead innovates an approach that transforms an entire education system or medical system. He or she does not leave societal needs to government or business sectors but solves the problem through systemic change, spreading the solution and persuading entire society to take the plunge.
    One of the objectives of Catalyst is to share the best practices and lessons of different NGOs which will promote a strong NGO movement. Catalyst wants to encourage articles which will deal with development of analytical tools to hold NGO accountable. There are matrices available for the measurement of performance of for profit organization. But NGO movement or non profit organization does not have any such matrices. Catalyst will actively promote research dealing with these subjects and publish articles
    Please REVIEW and introduce this magazine to your members. Let me know the number of complimentary copies you wish to receive for distribution.
    Srinivasa Rao
    208 Parkway Drive,
    Roslyn Heights,
    New York, 11577, USA
    Phone: 516 801 2150.
    Fax: 516 706 1960
    Email: editor@afhd.org
    Web: http://www.afhd.org

  5. hello….first time in ur blog….just went through ur article.
    I agree with u.GDP perse cannot indicate the overall development of the people of the country.Over the last 4-5 years the has been growing at 8-9% .While if we take agriculture,where about 60% of the population is employed,its been hardly growing at 1-2%.The sad part is that ,istead of addressing the real issue govt is giving some incentives line loan waivers etc…
    I believe the 3 sectors that the govt must concentrate and that needs heavy invesments are education,agriculture and health.

  6. Sreekanth,

    More resources need to be invested in ‘social infrastructure’ in general and in ‘human capital’ in particular.

    Like you mentioned, the Government tries to ameliorate the illness rather than uprooting it.

  7. hi alex, excellent blog..can u help me collect the statistics and tel ur pts wer v have to work hard to overcome these difficulties?

  8. the most imprtant problem to india,i think is imported solution.People has import the idea which is successful internationally.in my view every problem should be cured based on homoeopathic philosophy.We will have to understand the nature of patient first.the nature of india is differnt from other parts of the world.so solution must be different.To understsnd nature more research is needed.Mere 3% expenditure on education can’t make drastic change.Morever the research should be linked with the problem of india and its people.our people are our asset.so they must be healthy and educated.This means expenditure on health should be increased.Again welfare consideration can never be neglected in this regard.welfare will be respected only when government comes in social sector.Rather than depending on trickle down effect we should think about the development process from bottom.

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