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HDI has brought about a paradigm shift in the way people think about the development process. Critically examine the inherent limitation of HDI.|Geography optional notes

HDI has brought about a paradigm shift in the way people think about the development process. Critically examine the inherent limitation of HDI.
(UPSC geography optional paper 1 2019, 20 Marks)

Topic: Human geography--Perspective in Human Geography-HDI


We will discuss the following:

  • GDP-Gross domestic Product
  • Gini Coefficient
  • Gross National Happiness
  • HDI-Human development Index
  • SPI-Social Progress Index

Gross Domestic Product (GDP):
During 1930, Simon Kuznets derived the Gross Domestic Product(GDP) to capture all economic transactions by individual, companies, and government in a single index and on the basis of GDP, the economic success of countries are judged.
The usefulness of GDP:
  • It helps to means inflation and liquidation flow.
  • It helps to measure the economic growth

Due to rapid globalization and technology-oriented integration among countries, GDP becomes outdated and GDP does not reflect the wellbeing of countries' residents.
The drawback of GDP:

  • fail to account production non-marketing activities like:
  • Mother taking care of the child
  • Homemaker doing household works and maintenance
  • Spending leisure life in the home and getting paid leave
  • Improvement in product quality
  • Ignoring a healthy environment 
  • Ignoring happiness in communities
  • Ignoring the social index such as justice, gender inequality, etc.

Gini Coefficient:

It is introduced in 1912 by Corrado Gini, It measures the income inequality among the country Citizen. It measures from 0 to 1 scale. Less than 0.4 is considered as good or normal inequality. India has a 0.5  Gini coefficient which shows high inequality in India. As a global wealth report, 1% population has 22 % Indian wealth.
  • Fail to measure the social development
  • Fail to measure inequality such as freedom, the digital divide, and economic opportunities.

GNH( Gross National Happiness)

It is introduced in 1970 by the king of Bhutan to measure the happiness level of citizens in a country.
The following are not incorporated:

  • Gender Equality
  • Quality Education
  • Good Infrastructure

HDI( Human Development Index)

Launched in 1990 by Pakistani Economic Mahbub Ul Haq to solve the shortcoming of the Gini coefficient and Gross national happiness. HDI is a qualitative index that measures the level of human development mainly from these three dimensions;

  • Life expectancy: 
    • It is calculated life expectancy between 25 years to 85 years.
  • Education: 
    • It is calculated based on the mean years of schooling and expected year of schooling
  • Per capita income or access to opportunities: 
    • Per capita income is calculated based on the Purchasing Power Parity (PPP)

UNDP HDI classified countries into three major groups:

  • Low HDI: 0 to 0.5 
  • Medium HDP: 0.5 to 0.8
  • High HDI: 0.8 to 1.0
As per UNDP HDI, Norway tops in this list of 189 countries in 2019, and India's position is 129.
India lost in inequality-adjusted HDI due to increasing inequality in India.
As per the Gender Inequality Index,  India Rank is 122 out of 162 countries.
From 2015 to 2016, 27.1 crore people in India were lifted from poverty.
Drawbacks of HDI:
The following are not covered:

  • Unequal distribution of wealth within the country
  • level of infrastructure development
  • Environment sustainability
  • Freedom of personal right is not covered in HDI

SPI( Social Progress Index):

It is beyond GDP and has included most parameters that require to fulfill sustainable development goals. Three basic pillars:

  • Basic needs for survival
  • Access to the building blocks to improve living conditions.
  • Access to opportunities to pursue goals and ambition.

SPI focuses on the outcome, not input that is used in GDP.

For example, SPI considers the quality of life and longevity instead of health care spending.

Source: The Hindu
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