The Human Development Report (HDR) for 2009 (with data till 2007) has been published. Too often, there is fixation with India’s rank, which happens to be a not very respectable 134th out of 182 countries, wedged in between Lao and Solomon Islands. This rank is based on HDI (human development index), computed on three criteria: PPP per capita GDP, health (life expectancy) and education (adult literacy rate, combined gross enrolment ratio). It is sometimes argued there should be many other indicators of human development and deprivation. HDI is too narrow. HDR has other measures too. But that apart, one reason why HDI and HDR have been so influential since the launch in 1990 is the virtue of simplicity.

Most other variables one thinks of will be correlated with the three core sets. It is not the case that India’s HDI value has not improved over time. In 1980, India’s HDI was 0.427 and now (meaning 2007) it is 0.612. Shortly after the 1991 reforms, we moved from low (less than 0.500) human development to medium. By 2025, we should hope to cross from medium to high (more than 0.800) human development. However, ranks are relative.

For instance, India’s non-PPP per capita income is $1046. Taken in isolation, one doesn’t know whether that is high or low. But it is sobering to know Luxembourg’s non-PPP per capita income is $103,042. That’s non-PPP, and PPP (purchasing power parity) transformations generally increase per capita incomes for developing countries and lower them for developed ones. Consequently, India’s PPP per capita income is $2753. But even then, Luxembourg’s happens to be $79,485.

... contd.