For Statisticians Only

In a special contribution to HDR '99, Nobel laureate Amartya Sen describes the Human Development Index (hdi), which he helped devise, as a 'crude' index, and once as 'coarse'. He admits that initially, he didn't see much merit in the hdi, which is the brainchild of former Pakistani finance minister and development economist, the late Mahbub-ul-Haq.

Just why exactly is hdi, which many in the developing world regard a better and more just way to measure the progress and overall well-being of a nation's people than the relative monetary opulence of the gnp, described as 'crude'? The hdi is the average of three indicators,of life expectancy, education level (literacy and enrolment ratio) and per capita income in terms of purchasing power parity.

Says economist Arjun Sengupta, consultant to the HDR: 'The reason for taking these three very simple indices is the availability of comparable data.' Data used are all from UN sources, and for a better understanding of human development, readers are also advised to follow other indicators of life and living, on which the HDR is a veritable treasure trove of information.

In '95, the two gender-related indices, the Gender Development Index and the Gender Empowerment Measureówere introduced. And in '97 came the Human Poverty Index, thanks mainly to Sen, since hdi still didn't measure deprivation.

hdi has been criticised for comparing oranges and applesócountries with huge population and myriad ethnic and cultural diversities like India with tiny, devoid-of-manufacturing ones like the Maldives. 'Growth does deliveróthe latest HDR ranking is a vindication of that economic theory. But our huge population and its high growth rate,' says Sanjaya Baru, a former consultant to HDR, 'deflates even our considerable progress.'

This year, for instance, India has gone up six ranks to the 132nd position and Pakistan slipped by one rank to 138ómainly because of changes in per capita income (higher growth rate for India and lower for Pakistan). Higher life expectancy has also played a big role, bringing India for the first time into the medium human development category. But experts are still unhappy on two counts.

For one, the latest National Sample Survey (nss) suggests a much higher literacy figure of 62 per cent, compared to the 52.5 per cent used by HDR. Incorporating the latest figures, it's argued, would push India up quite a bit, relative to its smaller counterparts. Sudarshan contests the nss claim which he says is a derived figure as the survey was actually aimed at household enterprises and got literacy data as a byproduct. And even after taking into account the new figure, India would go up only two notches. Still far below countries with high hdi which enjoy around 75 per cent literacy.

The other argument is, of course, the population denominator. An argument which has sadly been decimated by China, which has a higher population than India, but also better education and literacy levels (see chart). Moreover, says Sudarshan, 'the best way to limit population growth is to educate people, especially women, and ensure that infant mortality is brought down fast. These two causal factors are captured in the first two components of hdi'.

Experts have also questioned the hdi data for India which pegs poverty at 52 per cent, while the latest data put poverty ratio at 36 per cent. However, in terms of gender development or empowerment, India records negligible progressóremaining close to Pakistan, which has more feudal and religious pressures on women.

But the best impact of the HDR is that it has goaded India (the ncaer HDR in '94) and its states into incorporating human development into their administrative agenda. So much so that Madhya Pradesh has already published an HDR in '95 with a sequel last year; Gujarat, Karnataka and Rajasthan are about to come out with their versions. In MP, over 42 per cent of plan budget now goes to social service spending.