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?
See the answer frameworkWhat to write, point by point
How to write this answer
- Distinguish Set out the differences point by point, ideally in a table.
For Economy: Use current data and scheme names; a simple flowchart of cause and effect works well.
For this question: Quote the 2025 report figures: HDI 0.685, IHDI 0.475, a 30.7 per cent loss; the gap is the answer.
Distinguish the Human Development Index (HDI) from the Inequality-adjusted HDI (IHDI), using India's figures, and explain why the IHDI is a better measure of inclusive growth.
UNDP's Human Development Index combines life expectancy, education (mean and expected years of schooling) and income per head into one number, the geometric mean of the three. The Inequality-adjusted HDI, introduced in the 2010 Human Development Report, discounts each dimension for how unequally it is shared.
How they differ
- HDI measures average achievement; the IHDI reduces it by the inequality within each dimension (using the Atkinson measure), so it shows the level of human development the typical person actually enjoys.
- If everyone were equal the two would match; the gap between them is the loss due to inequality.
India's figures (Human Development Report 2025, data for 2023)
- India ranks 130 of 193 countries with an HDI of 0.685, in the medium human development group.
- Its IHDI is 0.475: Inequality reduces India's HDI by 30.7 per cent, one of the largest losses in the region, driven by gaps in income, education and health.
Why the IHDI is the better measure of inclusive growth
- Inclusive growth means gains shared across groups; the HDI can rise while the poor fall behind, but the IHDI falls when gaps widen.
- It shows which dimension holds a country back, guiding policy on schooling quality, health access or income support.
- Limits: It does not capture gaps between social groups (caste, gender, region) directly; the Gender Development Index and the Multidimensional Poverty Index complement it.
India's rising HDI shows progress; its IHDI shows how unevenly that progress is shared. Narrowing the 30.7 per cent loss is the real test of inclusive growth.
Sources: Human Development Index (Wikipedia); UNDP Human Development Report 2025, Statistical Annex: Inequality-adjusted HDI; List of countries by inequality-adjusted Human Development Index (Wikipedia)