Review on the Paper-

‘INEQUALITY- ADJUSTED HUMAN DEVELOPMENT

INDEX: STATES IN INDIA’
AUTHORS: M.H. SURYANARAYANA, ANKUSH AGRAWAL, K. SEETA PRABHU
Indian Journal of Human Development
SAGE Publications

SEMESTER VI

YEAR: 2020-2023

DEVELOPMENT ECONOMICS

PAPER: CC-14

UNIVERSITY ROLL NUMBER: 203223-11-0039

UNIVERSITY REGISTRATION NUMBER: 223-1211-0320-20

CONTENT:

I. ABSTRACT

II. INTRODUCTION

III. AIM OF THE ARTICLE

IV. METHODOLOGY AND DATA SOURCES

V. ESTIMATES AND OBSERVATIONS

VI. CRITICAL REMARKS

VII. CONCLUSION
I. ABSTRACT

The authors tried to study the inequalities in India, the article adopts the methodology
proposed by The UNDP (Human Development Report) 2010, to compute the Human
Development Index and Inequality adjusted Human Development Index for the states of
India. The authors have used data from different National Sample Survey (NSS) on
appropriate variables required for the study. The findings of the study were useful to
provide policy insights for a strategy to promote Human development by addressing
inequalities in the different states of the country. It was observed by the authors that the
potential lost due to inequality was highest in education among all the three dimensions
(income, education, health). The observations from the study also show that the
inequalities were staggering in the health sector. The authors suggested that social
development of the nation is an important step to be taken by the government of India to
fulfill the goal of overall economic development of India.

II. INTRODUCTION

India has generally conceptualized and measured the redistributive policy options in
terms of reduction in estimates of extent of inequality of consumption/ income
distributions. The author says that India has always focused on economic growth, paying
little attention on the inequalities of consumption that exists in the economy of India. The
Indian government had tried to launch many five- year plans to overcome these
inequalities but their goal was “growth” only, but never focused on changing the extent of
inequality in consumption distribution. India has not explored the scope of reducing
unequal achievements across persons in education and health. The inequality in these
three dimensions of HDI are so prominent in between the states of India that specific
policies to eradicate the inequalities is absolutely necessary. While adopting redistributive
strategies for given income level would involve transfer of wealth between two segments
of population by instruments like taxes and subsidies. On the other hand, to reduce the
inequalities in the realm of Health and education, is to provide proper infrastructural and
technical support to the deprived areas of the nation. All these measures would provide a
quantum improvement and proper distribution of facilities in all the sections of India and
thereby improving the HDI and IHDI ranks of India in the world table.

III. AIM OF THE ARTICLE

The article seeks to quantify the extent of loss in Human development due to inequality
across its dimensions in different states as well as the country as a whole. In other word
the authors try to examine the scope for promoting ‘Human development’ by reducing the
extent of inequality in its different dimensions. The study explores the issues specified by
UNDP in terms of Human development. The article uses comprehensive framework to
address various issues related to Human development, inequity and inequality. The article
aims to understand the variation in HDI and IHDI values among the various states within
India (intra- specific observations) and comparing the average HDI and IHDI values of
India with other countries of the world (inter- specific). The Article seeks to overcome
the state specific development inequality by studying the three dimensions carefully and
suggest some recovery and curative policies to reduce the inequality in HDI and IHDI of
the various states of India and improve the HDI and IHDI rank of India in the world
ranking table.

IV. METHODOLOGY AND DATA SOURCES

The three major dimension for measuring HDI and IHDI are income inequality, education
inequality and health inequality. The authors have used the data on per capita income as a
measure of income inequality, data on life expectancy to measure health inequality and
data on mean years of schooling and expected years of schooling is used as a measure for
educational inequality. The authors have used the following formulae to measure HDI and
IHDI respectively-
Ix = (Actual Value – Min. value) / (Max. value – Min. Value), where Ix measures the
income, educational and health dimension respectively. The authors have used aggregate
of these sub- indices give the HDI value: HDI= ³√ Iincome × Ieducation × IHealth
The inequality adjusted estimates of the three dimensions are measured using:
I1 = (I – Ax) × Ix where, Ax is the Atkinson inequality measure of the dimension.
IHDI is obtained by the formula: IHDI = ³√ I1health * I1education * I1income
Per Capita Income estimates for states are obtained using the NSS (National Sample
Survey) estimates of Per capita personal consumption expenditure for the year 2004/2005
for studying both the HDI and IHDI.
The mean Years of Schooling of the adult population (aged 25years and above) are
estimated using the NSS data on ‘educational status and training of India’ for the year
2004/2005 to study both HDI and IHDI.
The estimates of life expectancy of 16 major states are obtained from the SRS (sample
Registration System) from 2002- 2006 are used. The SRS data of Chhattisgarh,
Jharkhand, and Uttar Pradesh are not adequately provided in the SRS, so related data are
used for studying both the HDI and IHDI.

V. ESTIMATES AND OBSERVATIONS

The income dimension is a monetary dimension of human well- being. It was observed by
the authors that the average loss due to inequality in income is 16% at all India level, it is
highest for Maharashtra (19%) and lowest for Bihar and Assam (9%)
The Education dimension is a measure of social well- being. It was observed by the
authors that the average loss due to inequality in education is 43%. It is highest for Uttar
Pradesh, Jharkhand and Rajasthan (46%) and lowest for Kerala (23%). This clearly shows
that Kerala emerges out as an outlier because it has done exceptionally well on the
educational front.
The health dimension is also a social dimension of Human well- being. It was observed
by the authors that the average loss due to inequality in health is 34% and it is highest in
Chhattisgarh and Madhya Pradesh (43%) and lowest in Kerala (11%). The observations
made in the article shows that despite of accelerated efforts to improve educational
achievements in recent years through targeted national flagship schemes as Sarva Shiksha
Abhiyan, inequalities in education is worrisome as it not only affects the present
generation but also future generations to come, which would lead to perpetual inter-
generational transmission of inequalities.
On an international perspective it was observed by the authors that India with an HDI
value of 0.504, falls in the category of countries with “Medium Human Development”
because it falls short to the world average HDI index, which is 0.624 (as per UNDP
2010). They concluded that the reason of such poor performance of India in the world
platform is because the loss due to inequality in the three major dimensions is around
32% in India which is much higher than observed on an average in the world (around
22%). Upon analyzing the values of the dimensions obtained in the study, the authors
divided the states into ‘low HDI’ and ‘Medium HDI’ categories. Punjab, West Bengal,
Himachal Pradesh, Haryana, Maharashtra, Karnataka, Gujrat and Uttarakhand are the
major states in the ‘medium HDI’ category and all the other states of India fall under the
‘Low HDI’ category. India’s rank on the HDI list of the world is 120th which clearly
shows that the inequality in distribution of Human development is distinctly pronounced
in India in comparison with the world scenario and the authors concluded that India needs
serious policy transformation to improve their World HDI rank and reduce the
inequalities in HDI between the states of India.

VI. CRITICAL REMARKS

The article was efficient in thoroughly pointing out the HDI and IHDI of Indian States
and comparing India’s HDI and IHDI with the average of the world but the health
dimension was measured using the data on life expectancy which is not very sensitive to
difference in health status. There are many other indicators which could have been used to
reflect health dimension such as morbidity and child mortality because these values
would have been more sensitive measure of changes in the health structure of the nation
and yield better insight to inequalities in this dimension. The specific profitable policies
to be adopted by the government in the educational sector and health sector to improve
HDI and IHDI are not stated by the authors. If the authors would have mentioned about
the previous policies adopted by the government to improve the HDI, then it would have
been easier for the readers to learn the progress in the path of economic development.
Other subsidiary influencing factor like population and infrastructural investments which
have a significant impact on the HDI and IHDI values are not mentioned in the article.
This would give an insight of many other factors which are related to the dimensions, so
these bring error in the readings. The schemes adopted after the year 2010 to improve
HDI and IHDI are not stated in this article. The performance of the schemes and planning
programs adopted by the government would help the reader to understand the progress
made by the nation.
VII. CONCLUSION

The study provides estimates of HDI and IHDI for Indian states. The twin estimates
permit quantification of the potential lost due to inequality in the three dimensions of
Human development. The author s provides an explanation for uneven human
development attainments across Indian states. The study shows that potential lost due
inequalities in education is highest among all the three dimensions. The article suggested
that focus should be given in areas and social groups that continue to have constraints in
access to basic education. There are staggering cases of inequalities in access to health
facilities and which shows variation with respect to income and social groups. The
article’s findings are helpful to strategize and promote policies of Human development to
reduce inequalities in major dimensions affecting HDI and IHDI and support the
economic Growth of the Nation.