Human development index and Quality of Human Life

Introduction :

GNP is a measure of economic development is being replaced by the Human

Development Index (HDI). Thus, HDI is the alternative to GNP, to measure

economic development of the country. The United Nations Development

Programme (UNDP) introduced the HDI in its first leadership of Mahbub-ul-haq.

Three measures have been developed:-

1. Human Development Index (HDI)

2. Gender related development index (GDI)

3. Human poverty index (HPI)

Concept of Human development

Human development is process of widening people’s choices as well as raising the

level of well-being achieved.

As stated by Mahbul-ul-haq, the difference between economic growth and human

development (in definition) is that, economic growth focuses on the expansion of

only one choice – income, while human development includes the enlargement of

all human choice economic, social, cultural or political.

Human Development Index (HDI)

HDI is a composite index of 3 social indicators – life expectancy, adult literacy and

years of schooling. It also takes into account real GDP per capita. Therefore, HDI

is a composite index of achievements in 3 fundamental dimensions, a long and

healthy life, knowledge and a decent standard of living.

HDI does not replace GNP but HDI makes clear the real position of a society in

many aspects.

Relation between Economic growth and Human Development

Success in economic growth ultimately must be judged by what it does to our lives

in terms of quality of life. Thus, it has to be economic growth with human

development. This can be achieved in following ways:-

Adopting patterns of economic growth in the economy that are heavily

labor-intensive and thus providing remunerative employment to people.

More equitable distribution of income and economic opportunities to

improve general human well being.

Channeling a significant amount of resources by the state in areas of health,

education, skills of the people, providing basic social services that would

increase human development.

Ensure gender equality by providing farer opportunities for women and

access to education, child care, etc., contributes to human development.

The masses should have access to productive assets – to land, financial

credits, etc.

A population policy focusing on the role of education will help in lowering

fertility.

Gender related development index (GDI):

HDI measures average achievement, while GDI adjusts the average achievement to

reflect the inequalities between men and women.

The three dimensions of GDI are:

(a) Female life expectancy

(b)Female adult literacy and gross enrollment ratio

(c) Female per capita income

If gender inequality exists in a nation, the value of GDI would be less than

HDI .Greater the difference between the two, the greater is the gender inequality.

Human poverty index (HPI)

The concept of HPI was introduced by HDR in 1997. It had 3 elements of human

live – longevity, knowledge and decent standard of living. The first element

implies vulnerability to death at a relatively early age (before the age of 40).

The second element is related to percentage of adults who are illiterate.

The third element includes provision of health services, safe water, and percentage

of malnourished children under five.

These 3 variables would provide an adequate and broad picture about human

poverty.

Quality of Life Index:

The index of Quality of Life constructed based on the five indicators:

1. Access to safe drinking water.

2. Electricity connection

3. Enjoyment of two square meals a day throughout the year

4. Residence in “pucca houses”

5. Availability of beds in public hospitals to total population.

Structural changes in Indian Economy

Economic reforms in India since 1991

The congress Government, soon after resumption of office on June 1991, adopted a

number of stabilization measures that were designed to restore internal and

external confidence. The major areas of economic reforms are :-

Downsizing the Government sector: one of the most important reform

would be redefining the role of Government and downsizing the government

while improve the quality of governance. The downsizing of the

government implies privatization of non-strategic public sector enterprises

including banking sector.

Fiscal policy: Macro economic reforms needed were to ensure fiscal health.

The objective of this reform was to progressively reduce overall public

sector deficit.

Opening the economy to trade: Opening up the economy to foreign trade

was another important part of the reform agenda. Government has

announced that all quantitative measures will be removed by the 2003.

Disinvestment and Privatization: Disinvestment is another first generation

area where reforms are carried. The reforms began with ‘disinvestment”

which still leaves the government with a majority stake in PSU’s.

Monetary policy: A restrictive monetary policy would be pursued to reduce

inflanatory pressures and support the targeted improvement in balance of

payment position.

Private finance of infrastructure: Finance by private sector in

infrastructure was another critical area for reforms and where a major push

in needed.

Institutional changes: The need was to create a new institutional

architecture for the management of the Indian economy making it a full

fledged modern market economy.

Liberalizations, Privatizations and Globalization: (LPG)

Liberalization implies permitting the private sector to set up industrial units

without taking a license.

Privatization implies opening areas hitherto reserved for public sector to

private sector – both domestic and foreign operators.

Globalization means integrating the economy of a country with the world

economy. It removes barriers to free trade and investments.

Impact of LPG on various sectors of Indian Economy:

1. A higher rate of growth

2. An enlargement of employment opportunities

3. Reduction of population living below poverty line

4. Reduction of regional disparities between rich and the poor.

Problem of Population Explosion in India

The theory of “demographic transition” given by Coale and Hoover postulates that,

every country passes through three stages of demographic transition.

First Stage – According to this theory, both birth rate and death rates are high.

Hence the population remains more or less stable. It is generally in backward

economy, where agriculture is the main livelihood of the people, per capita

incomes are low, and standard of living is low. It is a stage of high growth

potential but low actual growth.

Second stage – It is featured by rapid growth of population. The standard of living

improves, income level rises, education expands, health and medical facilities

improve, government makes special efforts to check small pox, malaria etc…

These factors lower the death rate. However, the population grows at an alarming

rate; the decline in death rate is rapid but not in birth rate.

Third Stage – The birth rate declines significantly and balances with low death

rate. Hence the rate of population growth remains low. The problem of population

explosion can overcome by industrialization accompanied by urbanization, fast

growing and widespread education.

Population Explosion in India – Causes:

1. High birth rate

2. Relatively lower death rate

3. Immigration

Causes of fall in Death Rate:

1. Decline in infant mortality

2. Decline in maternal mortality

3. Control over famines

4. Control of epidemics

Measures to check population explosion:

1. Economic Measure – Expanding Industrial Sector, Creating employment in

urban areas, Removal of Poverty.

2. Social Measures - Education, Status of women to be improved, minimum

marriageable age to be increased.

3. Family planning programme – Public Information, Research, Family

planning centers, Incentives.