India must improve income to raise human development ranking

Source: The post India must improve income to raise human development ranking has been created, based on the article “HDI has a heavy income bias” published in “Businessline” on 7th June 2025.India must improve income to raise human development ranking.

UPSC Syllabus Topic: GS Paper 3

Context: India’s Human Development Index (HDI) ranking improved from 133 in 2022 to 130 in 2023, with the HDI value rising from 0.676 to 0.685, as per the 2025 UNDP Human Development Report. This calls for a closer look at long-term HDI progress and the role of per capita income.

For detailed information on India’s Performance in Human Development Index read this article here

India’s HDI Progress Over Time

1. Long term HDI growth: Between 1990 and 2023, India’s HDI increased from 0.446 to 0.685, a 53% rise over 33 years, with an annual growth of 1.31%. This pace is faster than the global and South Asian averages.
2. Gains in HDI Components:

• Gross national income (GNI) per capita rose from $2,167 to $9,048 (PPP).
• Life expectancy increased from 58.6 to 72 years.
• Expected years of schooling rose from 8.2 to 13 years.

These are significant achievements since economic reforms.

3. Comparative ranking: India lags behind Russia (64), China (75), Brazil (84), Sri Lanka (78), Indonesia (113), and Philippines (117). It shares its 130th rank with Bangladesh, while staying ahead of Nepal (145), Myanmar (149), and Pakistan (168).

Per Capita Income and HDI Challenges

1. Medium development status: With an HDI of 0.685, India falls in the medium human development category, approaching the 0.700 threshold for high development. Low per capita income delays further advancement.
2. Component based Disparities: HDI has three equal components: health, education, and income. India’s per capita income rank is 123, lower than life expectancy (112) and expected schooling (114). Mean years of schooling ranks even lower at 143.
3. Impact of demographics:India’s high population reduces per capita income. Had the population remained at the 2000 level, GNI per capita would be $12,282, with a rank of 114. Population stabilisation is expected only after 2050, slowing HDI gains.

Limitations of HDI Aggregation

1. Concern over methodology:,Economist T.N. Srinivasan criticised HDI’s structure, calling it an arbitrarily weighted sum of unrelated indicators, lacking true multidimensional meaning.
2. Income dominance in rankings: Despite its broader scope, HDI correlates strongly with income. For all countries, the rank correlation between GDP per capita and HDI is 0.97. For medium HDI countries, it is 0.78, showing income’s strong influence.

Conclusion

India’s HDI has improved steadily, but low per capita income, driven by population size, limits its ranking. Since income strongly influences HDI, fast economic growth remains essential to achieve better human development outcomes.

Question for practice:

Examine how per capita income influences India’s Human Development Index ranking and overall progress.