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Human development index and Quality of Human

Life
Introduction :
GNP is a measure of economic development is being replaced by the Human
Development Index (HDI). Thus, HDI is the alternative to GNP, to measure
economic development of the country.

The United Nations Development

Programme (UNDP) introduced the HDI in its first leadership of Mahbub-ul-haq.


Three measures have been developed:1. Human Development Index (HDI)
2. Gender related development index (GDI)
3. Human poverty index (HPI)
Concept of Human development
Human development is process of widening peoples choices as well as raising the
level of well-being achieved.
As stated by Mahbul-ul-haq, the difference between economic growth and human
development (in definition) is that, economic growth focuses on the expansion of
only one choice income, while human development includes the enlargement of
all human choice economic, social, cultural or political.
Human Development Index (HDI)
HDI is a composite index of 3 social indicators life expectancy, adult literacy and
years of schooling. It also takes into account real GDP per capita. Therefore, HDI
is a composite index of achievements in 3 fundamental dimensions, a long and
healthy life, knowledge and a decent standard of living.

HDI does not replace GNP but HDI makes clear the real position of a society in
many aspects.
Relation between Economic growth and Human Development
Success in economic growth ultimately must be judged by what it does to our lives
in terms of quality of life. Thus, it has to be economic growth with human
development. This can be achieved in following ways: Adopting patterns of economic growth in the economy that are heavily
labor-intensive and thus providing remunerative employment to people.
More equitable distribution of income and economic opportunities to
improve general human well being.
Channeling a significant amount of resources by the state in areas of health,
education, skills of the people, providing basic social services that would
increase human development.
Ensure gender equality by providing farer opportunities for women and
access to education, child care, etc., contributes to human development.
The masses should have access to productive assets to land, financial
credits, etc.
A population policy focusing on the role of education will help in lowering
fertility.
Gender related development index (GDI):
HDI measures average achievement, while GDI adjusts the average achievement to
reflect the inequalities between men and women.
The three dimensions of GDI are:
(a) Female life expectancy
(b) Female adult literacy and gross enrollment ratio

(c) Female per capita income


If gender inequality exists in a nation, the value of GDI would be less than HDI
.Greater the difference between the two, the greater is the gender inequality.
Human poverty index (HPI)
The concept of HPI was introduced by HDR in 1997. It had 3 elements of human
live longevity, knowledge and decent standard of living. The first element
implies vulnerability to death at a relatively early age (before the age of 40).
The second element is related to percentage of adults who are illiterate.
The third element includes provision of health services, safe water, and percentage
of malnourished children under five.
These 3 variables would provide an adequate and broad picture about human
poverty.
Quality of Life Index:
The index of Quality of Life constructed based on the five indicators:
1.
2.
3.
4.
5.

Access to safe drinking water.


Electricity connection
Enjoyment of two square meals a day throughout the year
Residence in pucca houses
Availability of beds in public hospitals to total population.

Structural changes in Indian Economy


Economic reforms in India since 1991
The congress Government, soon after resumption of office on June 1991, adopted a
number of stabilization measures that were designed to restore internal and
external confidence. The major areas of economic reforms are :

Downsizing the Government sector: one of the most important reform


would be redefining the role of Government and downsizing the government
while improve the quality of governance.

The downsizing of the

government implies privatization of non-strategic public sector enterprises

including banking sector.


Fiscal policy: Macro economic reforms needed were to ensure fiscal health.
The objective of this reform was to progressively reduce overall public

sector deficit.
Opening the economy to trade: Opening up the economy to foreign trade
was another important part of the reform agenda.

Government has

announced that all quantitative measures will be removed by the 2003.


Disinvestment and Privatization: Disinvestment is another first generation
area where reforms are carried. The reforms began with disinvestment

which still leaves the government with a majority stake in PSUs.


Monetary policy: A restrictive monetary policy would be pursued to reduce
inflanatory pressures and support the targeted improvement in balance of

payment position.
Private finance of infrastructure: Finance by private sector in
infrastructure was another critical area for reforms and where a major push
in needed.

Institutional changes: The need was to create a new institutional


architecture for the management of the Indian economy making it a full
fledged modern market economy.
Liberalizations, Privatizations and Globalization: (LPG)
Liberalization implies permitting the private sector to set up industrial units
without taking a license.
Privatization implies opening areas hitherto reserved for public sector to
private sector both domestic and foreign operators.
Globalization means integrating the economy of a country with the world
economy. It removes barriers to free trade and investments.
Impact of LPG on various sectors of Indian Economy:
1.
2.
3.
4.

A higher rate of growth


An enlargement of employment opportunities
Reduction of population living below poverty line
Reduction of regional disparities between rich and the poor.

Problem of Population Explosion in India

The theory of demographic transition given by Coale and Hoover postulates that,
every country passes through three stages of demographic transition.
First Stage According to this theory, both birth rate and death rates are high.
Hence the population remains more or less stable. It is generally in backward

economy, where agriculture is the main livelihood of the people, per capita
incomes are low, and standard of living is low. It is a stage of high growth potential
but low actual growth.
Second stage It is featured by rapid growth of population. The standard of living
improves, income level rises, education expands, health and medical facilities
improve, government makes special efforts to check small pox, malaria etc
These factors lower the death rate. However, the population grows at an alarming
rate; the decline in death rate is rapid but not in birth rate.
Third Stage The birth rate declines significantly and balances with low death
rate. Hence the rate of population growth remains low. The problem of population
explosion can overcome by industrialization accompanied by urbanization, fast
growing and widespread education.

Population Explosion in India Causes:


1. High birth rate
2. Relatively lower death rate
3. Immigration
Causes of fall in Death Rate:
1.
2.
3.
4.

Decline in infant mortality


Decline in maternal mortality
Control over famines
Control of epidemics

Measures to check population explosion:


1. Economic Measure Expanding Industrial Sector, Creating employment in
urban areas, Removal of Poverty.

2. Social Measures - Education, Status of women to be improved, minimum


marriageable age to be increased.
3. Family planning programme Public Information, Research, Family
planning centers, Incentives.