Subnational disparities: 70% Indians in medium human development category, mismatch with states’ economic growth

India has seen significant economic growth in recent decades and is regarded as one of the world's fastest-growing economies. But the country's Human Development Index (HDI) achievements have not increased proportionately.

India ranks 134 out of 193 countries, according to the Human Development Report 2023-24, and falls under the medium human development category, trailing behind Bangladesh (129), Bhutan (125) and Sri Lanka (73).

HDI is a composite statistical measure created by the United Nations Development Programme (UNDP) to evaluate and compare the level of human development in different countries and regions around the world. It was introduced in 1990 as an alternative to the conventional economic measures like Gross Domestic Product (GDP), which do not consider the broader aspects of human development.

The HDI assesses a country’s average accomplishment in three fundamental aspects of human development: A long and healthy life, knowledge and a decent standard of living.

As India progresses towards becoming a global economic powerhouse, being the most populous country in the world, it is essential to tackle the considerable regional differences in human development. Doing so will help the country realise its demographic dividend and avoid a demographic catastrophe.

The subnational HDI is one of the most effective ways to comprehend how different states are developing. For this purpose, we have developed the subnational HDI applying the methodology used by the United Nations Development Programme (UNDP). We used this tool to measure human development at the state- and Union territory-level for 2022-23 and capture the differences in human development across all the length and breadth of the country.

HDI is calculated using four indicators: Life expectancy at birth, mean years of schooling, expected years of schooling and gross national income (GNI) per capita. Since robust estimates for GNI per capita are unavailable at the subnational level, gross state domestic product (GSDP) per capita, converted into purchasing power parity dollars at constant 2011 prices, is used as a proxy indicator to measure the standard of living.

Life expectancy estimates are taken from the Global Burden of Disease study (2020), mean and expected years of schooling are extracted from the National Service Scheme’s Comprehensive Annual Modular Survey (CAMS) 2022-23, while GSDP (2022-23) is gathered from the RBI’s Handbook of Statistics on Indian States. GSDP per capita is estimated using the population projection provided by the office of the Registrar General of India.

The methodology involves calculating the geometric mean of the normalised indices for the three dimensions of human development, while applying the maximum and minimum values recommended by the UNDP. HDI scores range from 0 to 1, with higher values indicating higher levels of human development.

As per our subnational HDI, 70 per cent of India’s population falls into the medium HDI category, while the remaining 30 per cent falls into the high HDI category.

India’s score in our index (0.669) is slightly higher than the UNDP’s score for India (0.644). This discrepancy can be attributed to the UNDP underestimating India’s mean and expected years of schooling as well as life expectancy by one to two years. If these underestimations were corrected, India’s HDI score would surpass that of Bangladesh.

Our subnational HDI presents a multifaceted view of the state of human development in India, highlighting a significant variance among the different regions. While some states have made considerable progress, others continue to struggle.

The disparities within the country are stark, indicating substantial subnational inequalities in human development and its dimensions. According to our index, Goa occupies the top spot, with Bihar scoring the lowest. Nonetheless, it is worth noting that Bihar, unlike in previous HDI reports, is no longer considered a low human development state.

The top five states with the highest HDI scores are Goa, Delhi, Sikkim, Kerala and Chandigarh, with Goa having HDI scores above 0.799, equivalent to countries in Eastern Europe, with a very high level of human development.

As many as 15 states, including Kerala, Maharashtra, Tamil Nadu, Karnataka, Telangana and Haryana, have scores ranging between 0.7 and 0.799 and are classified as high human development states.

On the other hand, the bottom five states are Bihar, Uttar Pradesh, Madhya Pradesh, Chhattisgarh, and Jharkhand, with medium levels of human development. This category also includes states like Assam, Odisha, Rajasthan and West Bengal, which have HDI scores below the national average. The scores of these low-performing states resemble those of African countries such as Congo, Kenya, Ghana and Namibia.

Despite having one of the highest GSDP per capita among larger states, Gujarat and Haryana have failed to translate this advantage into human development, ranking 21st and 16th, respectively.

Conversely, Kerala stands out as a state with consistently high HDI values over the years, attributed to its high literacy rates, robust healthcare infrastructure and relatively high income levels.

Bihar, however, has consistently held the lowest HDI value among Indian states, with high poverty levels, low literacy rates and poor healthcare infrastructure being the contributing factors.

One of the main reasons for this disparity is that economic growth in India has been unevenly distributed. Income inequality remains high, with the top 10 per cent of the population holding over 75 per cent of the wealth. This has resulted in significant disparities in access to basic amenities, healthcare, and education.

Another factor is the quality of social services. While India has made significant progress in reducing poverty and increasing access to healthcare and education, the quality of these services remains a concern. For example, while the country has achieved near-universal enrollment in primary education, the quality of education remains low. Similarly, while the country has made progress in reducing infant mortality rates, access to quality healthcare remains a challenge, particularly in rural areas.

Governments need to focus on human development in addition to economic growth to make sure the advantages of growth are shared more equally. This necessitates a comprehensive strategy that deals with income disparity, enhances access to high-quality social services, and addresses environmental issues.

Moreover, there is a need for greater investment in social infrastructure such as healthcare, education and basic household amenities, including access to safe drinking water, improved sanitation facilities, clean fuel and electricity in underdeveloped states.

India's substantial and expanding population offers a great chance for the nation to leverage its demographic advantage to foster sustainable economic growth and development. Nevertheless, to realise this potential, India needs to focus on investments in human development and job creation, especially for its young population.

Further, the nation should prioritise enhancing gender equality, narrowing income disparities and increasing access to essential services like sanitation and clean water. This approach will allow India to guarantee that every citizen has the chance to be actively involved in the nation's progress and enjoy the advantages of the demographic dividend.

India has the potential to become a global leader and a model for inclusive development by investing in its citizens and fostering an environment conducive to sustainable economic growth.

Nandlal Mishra is a doctoral fellow at International Institute for Population Sciences (IIPS), Mumbai. Swati Sneha is doctoral fellow at Department of Economics, Banaras Hindu University (BHU).

Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth.