GS III Mains 2025 PYQ - Growth and Development

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UPSC Mains GS III (2025)

Q1. Distinguish between the Human Development Index (HDI) and the Inequality-adjusted Human Development Index (IHDI) with special reference to India. Why is the IHDI considered a better indicator of inclusive growth? 

(Answer in 150 words) 10 M

Introduction
Human development includes health, education, and living standards, not just income. The Human Development Index (HDI) measures average progress in these areas, while the Inequality-adjusted HDI (IHDI) shows how evenly these achievements are shared.


Body

Difference between HDI and IHDI (India, 2023 data)

HDIIHDI
Introduced in 1990 by UNDP.Introduced in 2010 by UNDP.
Measures average performance in health, education, and income.Adjusts HDI for inequality in these areas.
Hides differences among groups.Exposes the loss due to inequality.
India (2023): HDI = 0.685, rank 130.India (2023): IHDI = 0.475, showing a 30.7% loss.
Shows potential development.Shows real development achieved.

IHDI is considered better because it gives a realistic picture. In India, where regional, gender, and income gaps remain high, IHDI reflects whether development benefits are widely shared.


Conclusion
By exposing hidden inequalities, IHDI helps policymakers focus on groups left behind, making it a stronger guide for inclusive and balanced growth in India.


Additional Information

Growth and Development: Understanding Human Progress

Growth and development are often used interchangeably, but they are not the same:

  • Growth refers to a quantitative rise in economic output, usually measured in terms of GDP or per capita income.

  • Development is a broader and more qualitative concept, including improvements in health, education, living standards, equity, and overall human well-being.

  • Key difference: Growth is about producing more, while development is about living better.

  • India’s case: Average GDP growth may not reflect the real quality of life or regional and gender disparities.


Human Development Index (HDI)

The Human Development Index (HDI) was introduced by the United Nations Development Programme (UNDP) in 1990 to move beyond GDP as the sole measure of progress. It combines three key dimensions:

  1. Health – measured by life expectancy at birth.

  2. Education – measured by mean years of schooling and expected years of schooling.

  3. Standard of living – measured by Gross National Income (GNI) per capita.

Significance of HDI

  • Provides a broader picture of well-being than economic growth alone.

  • Enables comparison of progress between countries and regions.

  • Highlights policy gaps in education, healthcare, and income distribution.

Limitations of HDI

  • Being an average, it hides inequalities within countries.

  • Ignores aspects like gender balance, environment, and political freedoms.

  • Depends on data quality and availability.


Inequality-adjusted Human Development Index (IHDI)

The Inequality-adjusted Human Development Index (IHDI) was introduced in 2010. It adjusts HDI values for inequality in health, education, and income.

India, 2023 Data

  • HDI value: 0.685, rank 130 out of 193 countries.

  • IHDI value: 0.475, indicating a 30.7% loss due to inequality.

  • Interpretation: While India shows moderate human development on average, a large portion of the population does not fully benefit due to disparities.

Significance of IHDI

  • Reflects the actual level of human development after accounting for inequality.

  • Highlights the gaps between potential and realized development.

  • Encourages inclusive policies targeting marginalized groups.

Limitations of IHDI

  • Requires reliable data on inequality, which may not always be available.

  • Does not capture all aspects of well-being, such as environmental quality and cultural freedoms.

  • Cross-country comparisons can be challenging due to data gaps.


Way Forward and Policy Recommendations

  • Strengthen data systems: Improve collection and reporting of inequality data in health, education, and income.

  • Integrate broader indicators: Include gender equality, environmental sustainability, and digital access.

  • Targeted social policies: Focus on reducing regional, caste-based, and gender disparities through specific programs.

  • Committee and report recommendations:

    • NITI Aayog: Advocates inclusive growth through skill development, health interventions, and education reforms.

    • Planning Commission/Expert Committees: Recommend investments in rural health, women’s literacy, and social safety nets.

    • UNDP suggestions: Encourage monitoring both HDI and IHDI to guide equitable policy-making.

  • Balanced growth approach: Combine rapid economic growth with investments in health, education, and welfare to ensure all sections benefit.



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