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LATEST NEWS UPDATES | Skepticism about HDRs by Bibek Debroy

Skepticism about HDRs by Bibek Debroy

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published Published on Nov 11, 2011   modified Modified on Nov 11, 2011

This seems to be season for Human Development Reports (HDRs). UNDP's global HDR for 2011 has been published. In that, the headline grabbing number was that India is ranked 134th out of 186 countries. This ranking is based on HDI (human development index), a composite indicator with three sub-heads of health (life expectancy), education (literacy, gross enrollment ratio) and PPP per capita income. HDI ranges between 0 and 1 and India's HDI is 0.547. This takes India to the medium human development category. There is an inequality-adjusted HDI value too. That is much lower at 0.392.

The HDR makes the statement that inequality in India has been increasing, as it has in China. A figure of 0.368 is also given for the Gini coefficient of income distributions in India. I think one should be less categorical a bit more careful about such statements. The fact of the matter is that we have no data on income or its distribution. NSS only collects data on consumption expenditure. Data on income are imputations. In all probability, inequality in distribution of incomes has increased. A Gini coefficient of 0.368 seems plausible. But given data problems, I find inequality adjusted HDI measures somewhat less plausible.

However, that is not especially relevant. There are measures of human development and deprivation not included in HDI.  They also convey some information, such as the multi-dimensional poverty index (MDPI), floated by UNDP from last year.  More and more measures of poverty and deprivation don't really add much to our comprehension, or to our understanding of what should be done to address the problem.  For instance, if one tracks improvements in India's HDR score since 1991 (when the reforms started), one finds that most of the improvement has been because of income increases.  Yes, questions can be raised about the distribution of that income. But there is no denying that income growth has contributed to improvements in HDI.

In contrast, improvements in the health and education sub-heads haven't been that significant. Shouldn't we be asking why that is the case? Isn't it because, beyond easing restrictions, the government has had a limited role to play in ensuring income growth? In contrast, health and education are still largely functions of public sector delivery.

India is large and heterogeneous. That's an obvious statement. However, there are State-level HDRs too. Typically, State-level HDRs focus on the State concerned, and often work out HDIs for districts. Rarely, they may also give HDI numbers for other States. But to make inter-State comparisons, one needs something like a National HDR. This was last brought out by the Planning Commission in 2001, a long time ago. Therefore, if a new such HDR is brought out, one would expect it to be publicized.  Rather oddly, that hasn't happened.

There is an India HDR 2011, brought out by Planning Commission and Institute for Applied Manpower Research and published by Oxford University Press.  I haven't seen references to this in the media, nor does it find a mention on Planning Commission's website.  I wouldn't have known it existed, had one of the authors not sent me a copy. This computes HDI numbers for 1999-2000 and 2007-08.  For India as a whole, these numbers were 0.387 in 1999-2000 and 0.467 in 2007-08. HDI isn't calculated for every State.  For the ones where such calculations are done, in 2007-08, Delhi had the highest value (0.783), followed by Kerala (0.677). These aren't great surprises.  Bihar (0.292) isn't at the bottom, it is third from the bottom.  Chhattisgarh and Jharkhand are below Bihar.

Broken into the three HDI components of health, income and education, this Indian HDR doesn't quite reflect the trend I mentioned earlier from the global HDR, in the sense that the bulk of the increase has come through improvements in health and education indices, not income. For States like Delhi, Goa, Rajasthan and Uttar Pradesh, the income index has actually declined. This doesn't sound right. Something is going wrong somewhere.

Admittedly, the methodology used in the two HDRs is not the same. But I suspect there is some anomaly with the data too.  In any event, before quoting numbers from any HDR, be a bit more skeptical.

The Economic Times, 9 November, 2011, http://blogs.economictimes.indiatimes.com/policypuzzles/entry/skepticism-about-hdrs


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