India’s Human Development: How Do Quality-Adjusted Elements Change the Picture?

Executive Summary

The concept of human development, which includes improving people’s lives, opportunities, and well-being, has gradually evolved over the years. The United Nations Development Programme (UNDP) introduced the Human Development Index (HDI) in 1990. This ground-breaking index included elements of education and health, in addition to the commonly accepted measure of income for human development. However, the HDI focuses only on the quantitative aspects such as life expectancy, years of education, and per capita income, ignoring qualitative aspects. For instance, more years of education may not always translate into meaningful learning, and higher incomes might not generate enough jobs or result in lower economic inequality.

To address such concerns, the UNDP implemented several qualitative refinements to the HDI. In 2006, gender-related dimensions were incorporated through the Gender Development Index (GDI) and the Gender Inequality Index (GII). To account for asymmetries in the distribution of the sub-indices, the Inequality-adjusted Human Development Index (IHDI) was also developed (UNDP, 2010). Furthermore, in 2021, the United Nations Economic and Social Commission for Western Asia (UNESCWA) introduced the Quality-adjusted Human Development Index (Q-HDI) for several countries, including India. This framework was aimed at incorporating qualitative dimensions into the traditional HDI by adjusting each of its component for quality considerations. Notably, these quality adjustments were limited to the national level with no coverage at the subnational (state or regional) level.

To address the missing qualitative aspect at the state level, this study computes a Quality-Adjusted Human Development Index (Q-HDI) at the state level in India. The quality-adjusted index goes beyond measurable accomplishments and incorporates qualitative aspects in all three constituents of HDI, viz, the income, health, and education. The income factor has been adjusted for inequality in income. By taking diseases and disabilities into account, the health dimension provides a deeper understanding of health. In education, instead of the number of years of schooling, the focus is on learning outcomes. This study uses eighth-grade students’ abilities in mathematics and reading to assess the quality of education. Furthermore, the composite Q-HDI, incorporating quality-adjusted health, education, and income, was further adjusted for gender inequality. The study was conducted for the three years, viz, 2011–12, 2017–18, and 2021–22.

The analysis across Indian states reveals significant divergences between quality-adjusted HDI and traditional HDI indices. Quality-adjusted values of income, education, health, and the composite HDI were significantly lower than those of the traditional income, education, health, and composite HDI values, respectively. Income inequalities were more pronounced in economically advanced states like Maharashtra, Karnataka, and Haryana.

Divergences between quality-adjusted and traditional education indices were large in all states. Even states with the highest HDI scores, such as Kerala and Himachal Pradesh, showed significant divergences in quality-adjusted vis-à-vis traditional education indices in all three years studied. Large divergences in quality-adjusted and traditional education indices were also observed in north-eastern states such as Meghalaya, Manipur, and Mizoram. The divergences between the quality-adjusted health index and traditional health index were insignificant for 2011–12 and 2017–18, but significant for 2021–22 in all states, especially Sikkim and West Bengal, due mainly to the COVID-19 pandemic.

Of the three years considered in the study, the divergence between the Q-HDI and traditional HDI widened from 2011–12 to 2017–18, but narrowed between 2017–18 and 2021–22. Thus, the overall divergence between Q-HDI and HDI reduced between 2011–12 and 2021–22, though the extent of reduction was not significant.

The study highlights the need to focus on qualitative dimensions of health, education and income as much as, if not more, than their quantitative aspects to gauge human development in a true sense. Furthermore, the significant inter-state variations suggest that there is a need for state-specific strategies to improve qualitative aspects.