The 2010 UNDP Global Human Development Report- The Real Wealth of Nations: Pathways to Human Development, introduced a new index, the Inequality-adjusted HDI aimed at capturing the distributional dimensions of human development. Three dimensions of HDI i.e. income, education and health are adjusted for inequalities in attainments across people. Globally, India is ranked 119 out of 169 countries but loses 32 percent of its value when adjusted for inequalities.
The 2010 UNDP HDR entitled The Real Wealth of Nations: Pathways to Human Development focuses specifically on inequalities in human development attainments across countries. To quantify the potential loss because of such inequalities, the Report introduces three new indices, viz., Inequality-adjusted Human Development Index (IHDI), Gender Inequality Index and Multi-dimensional Poverty Index.
The Government of India (GoI) has been concerned about rising inequalities and uneven distribution of the benefits of growth. Accordingly, the thrust of the 11thFive-Year Plan (2007-12) was on inclusive growth. The forthcoming 12th Five-Year Plan is expected to deepen and sharpen the focus on inequalities.
In view of the above, this report presents a methodology and provides estimates for the Inequality-adjusted HDI for Indian states. The report is organized as follows: The first section focuses on the methodology adopted to arrive at these estimates and data sources utilized.
The second section outlines the IHDI estimates for India's states and findings from the analysis. The paper concludes by highlighting key areas for further research and policy interventions.
Amidst growing concern over these persistent inequalities, and in light of government emphasis on inclusive growth, this report calculates the HDI and Inequality-adjusted HDI for states in India. The methodology adopted is similar to the approach of the HDR 2010 and data utilized from different rounds of the National Sample Survey on appropriate variables. To facilitate a cross-country comparison, the indices are normalized with reference to the goalposts outlined in the HDR 2010.
When ranked according to global goalposts, Kerala's rank is 99 (between Philippines and the Republic of Moldova) whereas Orissa is ranked 133 (between Myanmar and Yemen). Amongst India's states, Madhya Pradesh suffers the greatest loss of HDI due to inequality with 35.74 percent. Variations in IHDIs across states and a comparative analysis with global averages reveal that inequality in the distribution of human development is distinctly more pronounced in India than elsewhere.
Further, loss resulting from inequality varies across dimensions and is highest in education (43 percent), followed by health and income. Loss resulting from inequality in education is much higher than the global average of 28 percent and loss due to inequality in health is 34 percent, compared to the global average of 21 percent.
The findings of this report suggest that human development outcomes alone, without measurement of inequalities, may significantly mask the performance of individual states.
Full report is available at: http://www.undp.org.in/sites/default/files/reports_publication/IHDI_India.pd
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