UPSC Mains — Previous Year Question
Question
Distinguish between the Human Development Index (HDI) and the Inequality-adjusted Human Development Index (IHDI) with special reference to India. Why is the IHDI considered a better indicator of inclusive growth?
Model Answer
The Human Development Index (HDI), developed by the United Nations Development Programme (UNDP), evaluates a country’s average achievements in three basic dimensions: a long and healthy life, access to knowledge, and a decent standard of living. In contrast, the Inequality-adjusted Human Development Index (IHDI) adjusts the national score by accounting for how these human development achievements are distributed across the population.
Distinction between HDI and IHDI with Special Reference to India
| Analytical Dimension | Human Development Index (HDI) | Inequality-adjusted HDI (IHDI) |
|---|---|---|
| Core Concept | Measures average national achievements in health, education, and income without reflecting internal distribution. | Measures the actual level of human development after discounting for inequality across the three dimensions. |
| Status in India (UNDP Reports) | India’s HDI value stands at approximately 0.685 (2025 report), placing the nation in the “Medium Human Development” category. | India’s IHDI drops to roughly 0.50, reflecting an overall loss in human development due to internal inequality. |
| Data Granularity | Aggregates achievements, masking inter-state disparities, gender gaps, and urban-rural divides. | Quantifies the developmental loss resulting from structural disparities across social, gender, and regional lines. |
| Policy Utility | Useful for tracking macro trends, cross-country progress, and long-term national averages. | Acts as a targeted diagnostic tool for identifying lagging sectors and marginalized groups requiring policy intervention. |
Why IHDI is a Better Indicator of Inclusive Growth
- Captures Distributional Equity: Inclusive growth demands that the benefits of economic development are widely shared; while HDI highlights aggregate gains, IHDI measures whether growth reaches marginalized groups, women, and backward districts.
- Quantifies Inequality Loss: IHDI calculates the percentage “loss” in potential human development caused by inequality, highlighting whether deprivations are concentrated in healthcare, schooling access, or income distribution.
- Accounts for Regional Asymmetries: In India, where high-performing states (e.g., Kerala, Tamil Nadu) coexist with low-performing states, HDI averages mask regional deprivations. IHDI corrects for this skew, providing a realistic assessment of national equity.
- Aligns with Target 10 of SDGs: Evaluates progress toward reducing inequality within countries, nudging public spending toward targeted interventions like PM-POSHAN, Ayushman Bharat, and Samagra Shiksha.
While the HDI reflects India’s overall developmental potential, the IHDI illustrates its lived reality. Focusing on the IHDI provides policymakers with actionable data to close structural gaps and advance inclusive, equitable growth.