Human Development Index

Also called: HDI, HDI methodology, HDI goalposts · Topic: Human Development: Concept, Approaches and Measurement · NCERT: Class 12, Ch 3 "Human Development"

Meaning

The Human Development Index (HDI) is a single number between 0 and 1, published by UNDP. It shows how well a country does on three basic things: a long and healthy life (health), access to knowledge (education), and a decent standard of living (access to resources). The closer the score is to 1, the higher the human development.

• It was created in 1990 by Mahbub ul Haq, a Pakistani economist, working with Amartya Sen.
• It matters because income (GDP) alone cannot tell us whether people live long, learn and have choices. The HDI moves attention from the size of the economy to people's lives.

Explanation

Origin and idea behind it

• Mahbub ul Haq created the HDI in 1990.
• Amartya Sen worked with him. Sen's capability approach is the thinking behind the index. Capabilities are the real freedoms people have to live the life they value.
• UNDP published the first Human Development Report (HDR) in 1990.
• NCERT gives two sample scores:
• 0.983 means very high human development.
• 0.268 means very low human development.

The old (NCERT) method and the present method (since HDR 2010)

In the NCERT version, each of the three dimensions has an equal weight of one-third.

Dimension	NCERT indicator	Present indicator (since HDR 2010)
Health	Life expectancy at birth	Life expectancy at birth (no change)
Knowledge	Adult literacy rate (age 15+) + gross enrolment ratio (GER)	Mean years of schooling (MYS) (age 25+) + Expected years of schooling (EYS)
Resources	Purchasing power (US $)	GNI per capita in PPP $

• Life expectancy at birth: how many years a newborn baby is expected to live on average, if today's death rates stay the same.
• Gross enrolment ratio (GER): all students enrolled at one level of school, of any age, as a percentage of the children who are the official age for that level.

• Over-age and under-age students are counted too, so the GER can be more than 100%.

• MYS: the average number of years of school that adults aged 25 and above have completed. It replaced adult literacy.

• EYS: the number of years of school a child of school-entry age can expect to get, if today's enrolment patterns continue. It replaced GER.
• GNI (gross national income): all the income earned by a country's residents, including income they earn abroad.
• Purchasing power parity (PPP): a way of converting money between currencies so that the same basket of goods and services costs the same in every country.
• Why it is needed: 1 US dollar changed into rupees buys much more in India than in the USA. PPP corrects for this, so living standards can be compared fairly.
• Who makes PPP rates: the World Bank's International Comparison Program (ICP) [6]. The latest round is for 2021, covered 176 economies and was released in May 2024 [7][3].
• HDR 2025 uses 2021 PPP $ [3]. Earlier HDRs used 2017 PPP $.

Goalposts and how the score is calculated

Goalposts are fixed lowest and highest values. They are used to turn each indicator into a 0–1 index [3].

Indicator	Minimum ("natural zero")	Maximum ("aspirational target")	Why this number [3]
Life expectancy	20 years	85 years	No country fell below 20 in the 20th century. 85 is a realistic target, already crossed in some years by Hong Kong, China (SAR), Monaco and San Marino
EYS	0	18 years	18 years is about a master's degree in most countries
MYS	0	15 years	15 is the highest value MYS is projected to reach by 2025
GNI per capita (2021 PPP $)	100	75,000	At $100, poor economies still have subsistence and non-market production that the data misses. Above $75,000, extra income adds nothing to the HDI

• Step 1: make each dimension index [3].
• Index = (actual value − minimum) ÷ (maximum − minimum).
• Education index: take the simple arithmetic mean of the MYS index and the EYS index.

• Income index: uses the natural logarithm (log) of income. Each extra dollar helps people less than the one before. So going from $1,000 to $2,000 counts for much more than going from $50,000 to $51,000.

• Step 2: combine the three indices [3].

• HDI = (Health × Education × Income)^(1/3). This is the geometric mean.
• Before 2010: the HDI was a simple average. A high score in one dimension could fully make up for a low score in another.

• Since 2010: with the geometric mean, a weak dimension cannot be fully made up for by a strong one. This rewards balanced progress.

• Worked example: India, HDR 2025 (2023 data) [4][3]

• Health: (72.0 − 20) ÷ (85 − 20) = 0.800
• Education: EYS 13.0 ÷ 18 = 0.722. MYS 6.9 ÷ 15 = 0.460. Average ≈ 0.591
• Income: [ln(9,047) − ln(100)] ÷ [ln(75,000) − ln(100)] ≈ 0.681
• HDI = (0.800 × 0.591 × 0.681)^(1/3) ≈ 0.685

Categories and related indices

• HDR 2014 brought in fixed cut-off points. HDR 2025 still uses them [3].

Category	HDI value	Group average, HDR 2025 [4]
Very high	0.800 and above	0.914
High	0.700–0.799	0.777
Medium	0.550–0.699	0.656
Low	below 0.550	0.515

• UNDP (United Nations Development Programme) was set up in 1965 and has its headquarters in New York. It publishes the HDR every year, each with a theme.
• Other indices published with the HDR [3]:
• IHDI: the HDI lowered to account for inequality inside a country.
• GDI: female HDI ÷ male HDI.
• GII: measures gender inequality in reproductive health, empowerment and the labour market.
• MPI: the Multidimensional Poverty Index.
• PHDI: the HDI lowered for CO₂ emissions per person and material footprint per person (how much raw material each person uses).

Where it occurs

• World, HDR 2025 ("A matter of choice: People and possibilities in the age of AI", data for 2023) [4]:
• Top: Iceland (0.972) is first. Norway and Switzerland are tied second (0.970).
• Bottom: Somalia is 192nd (0.404). South Sudan is 193rd (0.388).

• The world HDI is 0.756. The South Asia HDI is 0.672 [4].

• India [2][4]:

• Rank 130 of 193, tied with Bangladesh (both 0.685). India is in the medium category, just below the 0.700 line for "high".
• Its HDI rose from 0.676 (2022) to 0.685 (2023), and its rank rose from 133 to 130. Most of the gain came from mean years of schooling and income per person.
• Indicators: life expectancy 72.0 years (58.6 years in 1990 [2]), EYS 13.0, MYS 6.9, GNI per capita $9,047 (2021 PPP) [4].

• Long-run trend: 0.446 (1990) → 0.501 (2000) → 0.590 (2010) → 0.685 (2023) [5]. Average yearly growth was 1.31% [5]. That is a rise of over 53% since 1990, faster than the world and South Asian averages [2]. (The NCERT-era figure for 1990 was about 0.43.)

• India's neighbours [4]:

Country	Rank	HDI	Category
China	78	0.797	High
Sri Lanka	89	0.776	High
India	130	0.685	Medium
Bangladesh	130	0.685	Medium
Nepal	145	0.622	Medium
Pakistan	168	0.544	Low

• Countries above the $75,000 income cap in 2023 [3]: Brunei Darussalam, Denmark, Ireland, Liechtenstein, Luxembourg, Norway, Qatar, Singapore and Switzerland.

Don't confuse with

• GDP / GNI per capita: these measure income only. The HDI uses income (on a log scale) as one of three dimensions, along with health and education.
• IHDI: the HDI lowered for inequality inside a country. The plain HDI uses national averages and ignores how evenly things are shared [3].
• GDI vs GII: the GDI is a ratio (female HDI ÷ male HDI). The GII measures gender inequality through reproductive health, empowerment and the labour market [3].
• Arithmetic mean vs geometric mean: the education index is an arithmetic mean of MYS and EYS. The HDI itself is a geometric mean of the three indices (since 2010).

Prelims Hooks

• The HDI was created in 1990 by Mahbub ul Haq, with Amartya Sen. It is published by UNDP (set up 1965, headquarters New York).
• Indicator switch in HDR 2010: adult literacy (age 15+) → MYS (age 25+). GER → EYS. Purchasing power → GNI per capita (PPP $). Life expectancy did not change.
• Goalposts (HDR 2025): life expectancy 20–85 years. EYS 0–18. MYS 0–15. GNI $100–$75,000 (2021 PPP) [3].
• Trap: the HDI is a geometric mean, the education index is an arithmetic mean, and income is on a log scale [3].
• Cut-offs (fixed by HDR 2014): very high ≥ 0.800. High 0.700–0.799. Medium 0.550–0.699. Low < 0.550 [3].
• HDR 2025: India is 130/193 (0.685, medium), tied with Bangladesh. Order in South Asia: Sri Lanka (89) > India = Bangladesh (130) > Nepal (145) > Pakistan (168, low) [4]. PPP rates come from the World Bank's ICP (2021 round, 176 economies) [7].

Mains Points

• Strengths of the HDI:
• It moved the development debate from GDP to people's lives, in line with Sen's capability approach.

• The geometric mean (since 2010) punishes uneven progress. It shows India's weak link clearly. India's MYS of 6.9 years gives an MYS index of only 0.46, while its health index is 0.800 (2023) [4].

• Limits of the HDI:

• It leaves out inequality, gender gaps, freedom and damage to the environment. This is why UNDP added the IHDI, GDI, GII, MPI and PHDI [3].

• National averages hide big gaps inside India, such as Kerala versus Bihar, and tribal areas versus the rest of the country.

• India's path to the "high" category (≥ 0.700):

• India needs more adult education and skilling (to raise MYS), better quality school education, faster income growth per person, and continued health gains. Life expectancy has already risen from 58.6 to 72 years since 1990 [2].
• Sri Lanka (89, "high") shows that spending on health and education can lift human development more than income growth alone. Bangladesh, at the same rank as India, makes the same point [4].

Related concepts

• Life expectancy at birth
• Adult literacy rate
• Gross enrolment ratio
• Purchasing power parity
• United Nations Development Programme
• Human Development Report

Read more

• Measuring human development: the HDI and the Human Development Report