The document discusses the Human Development Index (HDI), which is a composite statistic used to rank countries based on indicators of health, education, and standard of living. The HDI was created by Pakistani economist Mahbub-Ul- Haq in 1990 to assess overall social and economic achievement beyond just income. It is published by the UNDP and calculates dimension indices for health (life expectancy), education (adult literacy and enrollment), and income (GNI per capita) and combines them into a composite HDI score. Countries are ranked as having very high, high, medium, or low human development based on their HDI score.

1. Human Development Index
HDI
John Charles Lobo
MBA Jan 2021 Batch
PV-2

2. Agenda
1. Terminologies
2. Pillars of Human Development Index
3. What is Human Development Index ?
4. Origin of HDI
5. Factors considered for HDI
6. Measuring Human Development
7. International Comparisons
8. Conclusion
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3. Terminologies
GROWTH
• Quantitative and value neutral change .
• Positive or a negative sign.
DEVELOPMENT
• Qualitative change which is always value positive.
• Development occurs when positive growth takes place.
• For example, if the population of a city v/s Amenities
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4. Four Pillars of Human Development
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Equity
Sustainability
Productivity
Empowerment

5. What is Human Development Index(HDI)?
• It is a tool used to measure a country's overall achievement in its social and
economic dimensions.
• Definition:
The human development index (HDI) is a composite statistic of life expectancy,
education, and per capita income indicators, which is used to rank countries
into four tiers of human development.
• The human development index is a measure of economic development and
economic welfare
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6. ORIGIN OF HDI
• Devised and launched by Pakistani economist Mahbub-Ul- Haq in 1990.
• Amartya Sen and Mahbub –Ul- Haq worked upon the capabilities and
functioning which provided conceptual framework.
• Published by United Nations Development Programme (UNDP).
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Amartya Sen Mahbub-Ul- Haq

7. Measuring Human Development
• The human development index (HDI) ranks the countries based on their
performance in the key areas of health, education and access to resources.
Health :The indicator chosen to assess health is the life expectancy at birth.
Education : The adult literacy rate and the gross enrolment ratio represent
access to knowledge.
Access to resources is measured in terms of purchasing power (in U.S.
Dollars).
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8. Factors considered for HDI
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Dimensions Long & Healthy Life Knowledge A decent standard of living
Indicators Life expectancy at birth
Expected years
of Schooling
Mean years of
Schooling
GNI per capita (PPP $)
Dimension
Index
Life expectancy Index Education Index GNI Index
Human Development Index(HDI)

9. CALCULATION OF HDI
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1. Life Expectancy Index = 𝑳𝑬𝑰 =
(𝐿𝐸−20)
(85−20)
2. Educational Index= EI =
(𝑀𝑌𝑆𝐼−𝐸𝑌𝑆𝐼)
2
3. Income Index= II =
[𝑙𝑛 𝐺𝑁𝐼𝑝𝑐 −ln 100 ]
[𝑙𝑛 75000 −𝑙 𝑛 100 ]
HDI = ∛(𝑳𝑬𝑰 ∗ 𝑬𝑰 ∗ 𝑰𝑰)

10. HDI Rankings | 2020
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1
2
4
4
3
131
Level of Human
Development
Score in
Development
Index
Number of
Countries
Very High > 0.808 49
High 0.700-0.807 53
Medium 0.556-0.699 42
Low <0.555 43

11. INTERNATIONAL COMPARISONS
• Often smaller countries have done better than larger ones in human
development.
• Similarly, relatively poorer nations have been ranked higher than richer
neighbors in terms of human development.
• For example, Sri Lanka, Trinidad and Tobago have a higher rank than India in
the human development index despite having smaller economies.
• Similarly, within India, Kerala performs much better than Punjab and Gujarat
in human development despite having lower per capita income.
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12. IMPORTANCE OF HDI
• The HDI gives an overall index of economic development.
• It does give a rough ability to make comparisons on issues of economic welfare
– much more than just using GDP statistics show.
• It gives idea regarding areas of development which requires improvement.
• Statistics gives better decision making for areas having wide disparity.
• More focus on social & human development rather than only capital
accumulation and growth.
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13. LIMITATIONS OF HDI
• Wide divergence within countries.
• Economic welfare depends on several other factors
• GNI does not show how the income is spent by the government.
• When knowledge is measured it only takes into account what children
learn at school not in the family.
• Longevity can also be distorted as the life expectancy of a person does
not consider how healthy the life was led.
• Life expectancy value for a country is the given is an average of the total
population.
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14. CONCLUSION
• The HDI gives an overall indexof economic development.
• There are certain differences among different states development
conditions so there must be equal opportunities for development for all.
• Some important issues are missing in HDI such as infrastructure and some
economic factors.
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15. Refrences
1. Human Development Report 2020
2. Slide share Presentation HDI(Human Development Index) by Sarang
Meshram
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16. Thank You
John Charles Lobo
MBA Jan 2021 Batch
PV-2