Model Answer
0 min readIntroduction
The concept of development has evolved beyond mere economic growth to encompass human well-being. The Human Development Index (HDI), introduced by the United Nations Development Programme (UNDP) in 1990, serves as a composite statistic reflecting average achievements in key dimensions of human development: health, education, and standard of living. However, recognizing that national averages can mask significant disparities within a population, the UNDP introduced the Inequality-adjusted Human Development Index (IHDI) in 2010. The IHDI adjusts the HDI for inequalities in the distribution of these three dimensions, providing a more realistic picture of the actual human development experienced by people in a society.
Distinction Between HDI and IHDI
The fundamental difference between HDI and IHDI lies in their treatment of inequality. While HDI measures the *potential* human development a country could achieve if resources were distributed equally, IHDI reflects the *actual* level of human development by accounting for existing inequalities.| Aspect | Human Development Index (HDI) | Inequality-adjusted Human Development Index (IHDI) |
|---|---|---|
| Definition | A composite index measuring average achievements in three basic dimensions of human development: a long and healthy life, access to knowledge, and a decent standard of living. | An adjusted HDI that discounts the HDI value for inequality in the distribution of achievements across the population in the same three dimensions. |
| Focus | National averages, reflecting potential human development. | Actual human development experienced by people, accounting for disparities. |
| Methodology | Calculated as a geometric mean of normalized indices for life expectancy, education (mean and expected years of schooling), and Gross National Income (GNI) per capita. | Uses the same indicators as HDI but applies an Atkinson inequality measure to each dimension, computing a geometric mean of inequality-adjusted indices. |
| Limitation/Advantage | Can mask disparities (e.g., urban-rural, gender, caste, regional imbalances), potentially overestimating development in unequal societies. | Highlights inequality and inclusivity, showing the "loss" in human development due to unequal distribution. |
Special Reference to India
India's performance illustrates the critical difference between HDI and IHDI:- HDI Status: As per the 2025 Human Development Report (HDR), India's HDI value for 2023 is 0.685 (up from 0.676 in 2022), placing it at 130th out of 193 countries in the "medium human development" category. This indicates steady progress in average human development since 1990, driven by improvements in life expectancy, education, and GNI per capita.
- IHDI Status: However, when adjusted for inequality, India's IHDI value is significantly lower. The HDR 2025 indicates a substantial loss of 30.7% in human development potential due to inequality. This means the actual level of human development experienced by the average Indian is considerably lower than what the HDI suggests. This loss reflects disparities across health outcomes, access to quality education, and income distribution across socio-economic groups and regions.
Why IHDI is a Better Indicator of Inclusive Growth
The IHDI is considered a better indicator of inclusive growth for the following reasons:- Reveals Actual Development: Unlike HDI, which presents national averages, IHDI accounts for how evenly (or unevenly) achievements in health, education, and income are distributed. Inclusive growth aims for benefits to reach all segments of society, and the IHDI effectively measures this "actual" rather than "potential" development.
- Highlights Disparities: The IHDI explicitly quantifies the "loss" in human development attributable to inequality. This is crucial for India, a diverse nation with significant regional, gender, and socio-economic disparities (e.g., rural-urban gaps in healthcare access, variations in educational attainment across states).
- Guides Policy Formulation: By revealing where inequalities are most pronounced, the IHDI provides actionable insights for policymakers. It helps in identifying marginalized groups and regions that lag, enabling the design of targeted interventions and more equitable resource allocation, aligning with the "Sabka Saath, Sabka Vikas, Sabka Vishwas" (Together with all, Development for all, Trust of all) vision.
- Aligns with Sustainable Development Goals (SDGs): Inclusive growth is central to the 2030 Agenda for Sustainable Development, particularly SDG 10 (Reduced Inequalities). The IHDI's focus on equitable distribution makes it a more relevant metric for tracking progress towards sustainable and inclusive development goals.
- Reflects India's Diversity: In a country like India with its vast population and varied development levels across states and social groups, the IHDI offers a more nuanced understanding of human development, preventing strong performing states from masking the underperformance and deprivation in others.
Conclusion
While the Human Development Index (HDI) offers a valuable snapshot of a nation's average progress in crucial human development dimensions, it inherently overlooks internal disparities. The Inequality-adjusted Human Development Index (IHDI), by explicitly accounting for inequalities in health, education, and income, presents a more realistic picture of the lived experiences of a population. For India, with its significant socio-economic and regional divides, the substantial "loss" in human development revealed by the IHDI underscores the imperative for policies that prioritize equitable distribution and inclusive growth, ensuring that the benefits of development truly reach every citizen. The IHDI thus serves as a powerful tool for monitoring and guiding India's journey towards a more just and equitable society.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.