Inequality-adjusted Human Development Index: States in India

The UNDP Human Development Report (HDR) for 2010 introduced a new index, the Inequality-adjusted Human Development Index (IHDI), to capture the distributional dimensions of human development. The indicators used for the three dimensions of the HDI, namely, income, education and health, are adjusted for inequalities in attainments across persons. In the light of growing concern with inequalities in India and the focus of the Government of India on inclusive growth, this article adopts the methodology proposed in the HDR 2010 to compute the HDI and the IHDI for states in India. This is done largely using the available information from different National Sample Survey (NSS) rounds on appropriate variables. To facilitate cross-country comparison, the indices are normalized with reference to the goalposts mentioned in the HDR 2010. The findings of this study provide useful policy insights for a strategy to promote human development by addressing inequalities across dimensions in different states in the country. The potential lost due to inequalities is the highest in education among the three dimensions. Similarly, the inequalities are staggering in the case of health. Given the spectacular growth that the country has witnessed in the last decade, the policies promoting economic growth needs to be integrated with the distributional dimensions of education and health.