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What is Human Development Index (HDI)? Human Development Index (HDI) refers to a tool used for measuring the development level of country based on its economic and social measurements. It basically integrates the key social and economic aspects for doing assessment of country’s development on overall level. Human Development Index was developed for laying down the fact that overall development of nation is measured not only on the basis of its economic growth but also on the basis of its people and their capabilities. The social and economic dimensions of country takes into consideration the people’s health, their standard of living, their education capabilities and Gross National Income (GNI) per capita. Human Development Index is computed using the normal indices of three dimensions associated with country’s population that is their standard of living, level of education and people’s health. It is the mean of these indices. The HDI sets a minimum and maximum for each of the three dimensions, termed as ‘Goalposts’ and then shows where every country stands in relation to these goalposts. This is expressed as a value in between 0 & 1. The higher the country’s human development is, higher is it’s HDI value. In simple terms, it can be said that HDI is practices for accessing how development has brought improvements in human life. Indicators of Human Development Index The major Human Development Index are well-discussed in points given below: - Standard of Living The standard of living within the country is dependent upon its level of per capita income. Living standard of people depends upon how much they earn and how much they spend in relation to others. Over the last decade, multiple countries have experienced strong growth in economy and dramatic reduction in poverty. But just as crucial as the number of poor people (absolute poverty) is the proportion of poor population (relative poverty). There are many countries where absolute poverty is still falling at rapid rate, but the relative poverty is rising. There is because some people are taking more benefit from economic growth as compared to others, so the inequality is increasing and few people become poor. Income inequality has risen sharply in many countries and wealth inequality -what people own rather than what they earn has risen faster. Life Expectancy The life expectancy of people is major determinant of the level of human development in country. It is one of the widely used indicator in assessing the human development level. Life expectancy denotes how long can people reasonably expect to live under current circumstances. Higher the life expectancy at birth is, more developed the country is. In this contrast, the poor nations tend to have lower life expectancies. For knowing the life expectancy, a sample survey needs to be performed. Because distinct surveys carry distinct results, it is must to have enough representative samples. Once the data has been collected, it should be collected and some conclusions should be drawn from them. There are many factors that play a key role in increasing or decreasing the life expectancy in country. Level of Human Rights Level of human rights is regarded as indicator of human development. Although at present, the human rights are instrumented at international level, its scope has been gradually enlarged and its nature has been determined in rough manner. It is in the process of improvement and development. People can enjoy the human rights in better way if in case human development is high. Fulfilment of Basic needs No one can live freely in today’s time without the fulfilment of their basic needs. The provision of basic needs is one of key tasks that is looked upon by the authorities of human development index. In order of importance, there are the needs of most basic nature: food, housing and clothing. Other indicators concerned with human development index are infant mortality rate, maternal mortality rate, human development index rank, ratio of adult literacy, etc. Educational Attainment The level of education available to people determines whether country will develop or decline. This is what differentiates a developed country from an undeveloped one. The educational attainment is partial measure of development, defined here as percentage of adult population that by their 16th birthday, have either finished three years or more of schooling, or have completed initial family training programme or secondary schooling program. Per capital income The level of country’s human development is also determined to large extend by its per capita GDP. Countries with higher per capita GDP will have higher level of human development and vice-versa. Gross domestic product (GDP) indicates the economic growth of country and measures how much money a country is making from its products or services. It basically produces a simplistic figure that makes it easy to perform comparison in between countries with respect to development level. Therefore, the level of per capita GDP determines human development.

Category: Business Ethics

Human Development Index: Meaning & Its Indicators

Introduction to Business Ethics and CSR

Advantages and Disadvantages of Business Ethics

Characteristics and Features of Business Ethics

Nature & Scope of Business Ethics

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