Q20.Distinguish between the Human Development Index (HDI) and Inequality-adjusted Human Development Index (IHDI) with special reference to India. Why is the IHDI considered a better indicator of inclusive growth?

The Human Development Index (HDI) measures average achievement in health, education, and living standards. The Inequality-adjusted Human Development Index (IHDI) extends this by accounting for inequality across these dimensions, reflecting the actual level of human development.

Key Distinctions

• HDI uses a geometric mean of dimension indices, representing potential human development without considering distribution.
• IHDI discounts each dimension's average value based on its inequality level, revealing the loss due to unequal distribution.

India's Context and IHDI's Significance

India's IHDI is consistently lower than its HDI, indicating a significant loss in human development due to disparities in health access, education, and income. IHDI is a better indicator of inclusive growth as it directly captures how equitably development benefits are distributed. By highlighting these disparities, IHDI provides a more realistic picture of well-being beyond averages, guiding policymakers towards targeted interventions for equitable development.