# Term Paper

Of

Managerial Economics

TOPIC: Human Development Index differences among Indian states
(Any three states, Causes and Cures for low HDI)

ACKNOWLEDGEMENT

I owe a great many thanks to a great many people who helped and supported me during the writing of this term paper. My deepest thanks to Mr. Baljeet Singh for guiding and correcting various documents of mine with attention and care. He has taken pain to go through the paper and make necessary correction as and when needed. I would also thank my Institution and my friends for their suggestions without whom this plan would have been a distant reality. I also extend my heartfelt thanks to my family and well wishers

Signature

Index

 Introduction  Three dimensions in the HDI  HDI in India  HDI IN MADHYA PRADESH

 Trends of HDI in M.P  Reasons for low HDI in M.P  HDI IN MAHARASHTRA  Trends of HDI in M.P  Reasons for low HDI in Maharashtra  HDI in Kerala
 Trends of HDI in Kerala  Reasons for low HDI in Kerala

 Critical analysis and conclusion  Control of low HDI  References

Human Development Index
The Human Development Index (HDI) is a composite statistic used to rank countries by level of "human development" and separate developed (high development), developing (middle development), and underdeveloped (low development) countries. The

statistic is composed from data on life expectancy, education and percapita GDP (as an indicator of standard of living) collected at the national level using a formula. The formula defining the HDI is promulgated by the United Nations Development Programme (UNDP) [4] In general, to transform a raw variable, say x, into a unitfree index between 0 and 1 (which allows different indices to be added together), the following formula is used:

Where and are the lowest and highest values the variable x can attain, respectively. The Human Development Index (HDI) then represents the uniformly weighted sum with ⅓ contributed by each of the following factor indices:

Life Expectancy Index

Education Index

Gross Enrollment Index (GEI)

GDP

Three dimensions in the HDI
The HDI combines three dimensions:

Life expectancy at birth, as an index of population health and longevity Knowledge and education, as measured by the adult literacy rate (with two-thirds weighting) and the combined primary, secondary, and tertiary gross enrollment ratio (with one-third weighting) Standard of living, as indicated by the natural logarithm of gross domestic product per capita at purchasing power parity.

HDI IN INDIA

Map showing the HDI of India by states and union territories HIGH HDI
0.900–0.949 0.799 0.850–0.899 0.800–0.849 0.750–

MEDIUM HDI
0.700–0.749 0–0.599 0.650–0.699 0.600–0.649

LOW HDI
0.55 0.500–0.549 0.449 0.450–0.499 0.400–

0.488

Madhya Pradesh is one of the low ranking states in HDI in India. It is also one of the most populous state in the country. Its rank in HDI 33 among all the states and union territories of India. It is above only two states which are Orissa and Bihar.
Trends of HDI in M.P

From the last 4 reports, it has been found that the HDI in M.P has risen. In 1981 report HDI in M.P was less than 0.250 which increased up to 0.349 in 1991 report. In 2001 report it was 0.385 which is now i.e. 2008 report it is 0.488. This shows the overall increasing trend in the HDI in M.P.
Reasons for low HDI in M.P

As we have discussed above the three dimensions of HDI are :  Life expectancy

Literacy rate

 Standard of living

We will discuss them one by one. Life expectancy: The life expectancy in M.P is 56.5 years for males and 56.2 years for females. This gives us a total of 56.4 years average for both males and females. As an important component of HDI, life expectancy should be high for high HDI but here it is very low which is one of the reason for low HDI in M.P.

Literacy rate: Literacy is a reasonably good indicator of development in a society. Spread and diffusion of literacy is generally associated with essential trait of today's civilization such as modernization, urbanization, industrialization, communication and commerce. For the purpose of census, a person aged seven and above, who can both read and write with any understanding in any language, is treated as literate. As per 2001 Census, the overall literacy rate of India is 65.38%. The male literacy rate is 75.96% and female literacy rate is 54.28%. Now moving towards M.P the literacy rate for male is 76.80 and for female is 50.28. Again the total is low i.e. 64.11. Another thing to focus here is the low literacy rate of women which is also an indicator of low HDI.

Standard of living: The main factors influence the standard of living are poverty, physical infrastructure, regional imbalance. Poverty in M.P is very high because of high population. A large no. of the BPL population is here. Another this is most of the population is dependent upon agriculture. The physical infrastructure is poor in spite of the fact that there are some big cities like Bhopal, Indore etc. this shows the regional imbalance in the state.

HDI IN MAHARASHTRA

0.689
Maharashtra is one of the medium ranking state in HDI in India. It is also one of the most populous state in the country. Its rank in HDI 12 among all the states and union territories of India.
Trends of HDI in M.P

From the last 4 reports, it has been found that the HDI in Maharashtra has risen. In 1981 report HDI in Maharashtra was in between 0.3500.399 which increased up to 0.480 in 1991 report. In 2001 report it was 0.538 which is now i.e. 2008 report it is 0.689. This shows the overall increasing trend in the HDI in Maharashtra.
Reasons for low HDI in Maharashtra

As we have discussed above the three dimensions of HDI are:  Life expectancy  Literacy rate  Standard of living

Life expectancy: The life expectancy in Maharashtra is 64.5 years for males and 67 years for females. This gives us a total of 65.8 years average for both males and females. As an important component of HDI, life expectancy should be high for high HDI but here it is low which is one of the reason for medium HDI in Maharashtra.

Literacy rate: Literacy is a reasonably good indicator of development in a society. Spread and diffusion of literacy is generally associated with essential trait of today's civilization such as modernization, urbanization, industrialization, communication and commerce. For the purpose of census, a person aged seven and above, who can both read and write with any understanding in any language, is treated as literate. As per 2001 Census, the overall literacy rate of India is 65.38%. The male literacy rate is 75.96% and female literacy rate is 54.28%. Moving towards Maharashtra the literacy rate for male is 86.27 and for female is 67.51. the total is in between low and high i.e. 77.21. Another thing to focus here is the low literacy rate of women which is an indicator of low HDI.

Standard of living: The main factors influences the standard of living are poverty, physical infrastructure, regional imbalance. Poverty in Maharashtra is high because of high population. The physical infrastructure varies from region to region. In the cities like Mumbai (financial capital of India) and Pune, the infrastructure is world class. People there are rich and have high standard of living. But in the other regions of the state the infra structure is not so good which shows regional imbalance.

HDI in Kerala

0.814
Kerala is one of the two high ranking state/U.T in HDI in India other being Chandigarh. It is moderately populous state in the country. Its rank in HDI 2 among all the states and union territories of India (1st among all the states).
Trends of HDI in Kerala

From the last 4 reports, it has been found that the HDI in Kerala has risen. In 1981 report HDI in Kerala was in between 0.500–0.549 which increased up to 0.580 in 1991 report. In 2001 report it was 0.638 which

is now i.e. 2008 report it is 0.814. This shows the overall increasing trend in the HDI in Kerala.
Reasons for low HDI in Kerala

As we have discussed above the three dimensions of HDI are :  Life expectancy  Literacy rate  Standard of living

Life expectancy: The life expectancy in Kerala is 70.6 years for males and 76.1 years for females. This gives us a total of 73.5 years average for both males and females. As an important component of HDI, life expectancy should be high for high HDI here it is quite high as compared to other states and most developed countries in the world, which is one of the reason for high HDI in Kerala.

Literacy rate: Literacy is a reasonably good indicator of development in a society. Spread and diffusion of literacy is generally associated with essential trait of today's civilization such as modernization, urbanization, industrialization, communication and commerce. For the purpose of census, a person aged seven and above, who can both read and write with any understanding in any language, is treated as literate.

As per 2001 Census, the overall literacy rate of India is 65.38%. The male literacy rate is 75.96% and female literacy rate is 54.28%. Moving towards Kerala the literacy rate for male is 94.20 and for female is 87.86. The total is very high i.e. 90.92. Another thing to focus here is the high literacy rate of women which is an indicator of high HDI.

Standard of living: The main factors influence the standard of living are poverty, physical infrastructure, regional imbalance. Poverty in Kerala is very low. The physical infrastructure don’t varies from region to region. All over Kerala the physical infrastructure is good. There is no regional imbalance in any field. Kerala is growing in very balanced way that’s the reason that Kerala’s HDI is high that many nations in the European Union.

Critical analysis and conclusion
We have discussed three states one with low HDI (M.P), one with medium HDI (Maharashtra) and one with high HDI (Kerala). Now the analysis for each state.

M.P is the low ranking state in HDI. It is because of three factors I. II. III. Low life expectancy Low literacy rate Low standard of living

This can be controlled by: I. II. III. IV. V. VI. Controlling population Controlling poverty Decreasing regional imbalance Better medical facilities in the state Better education system Improvement of physical infra structure.

Maharashtra: Maharashtra is the medium ranking state in HDI. It is because of three factors I. II. III. Medium life expectancy Low literacy rate Regional imbalance

This can be controlled by: I. II. III. IV. V.
VI.

Controlling population Controlling poverty Decreasing regional imbalance Better medical facilities in the state Better education system Improvement of physical infra structure all over the state not some areas.

Kerala : Kerala is the low ranking state in HDI. It is because of three factors I. II. III. High life expectancy High literacy rate High standard of living

References