Page 67 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 6: Demographic Features and Indicators of Development

so on. While some of these factors are ‘non-monetary’, others are ‘monetary’. In this direction, at least Notes
two most important indices are Human Development Index and Economic Development Index.
Human Development Index : A process of enlarging people’s choices may be called Human
development. The United Nations Development Programme prepares the Human Development Index
(HDI) annually. In theory, the choices can be infinite and change over time.
Computation of HDI : There are three indicators of HDI. First, longevity, as measured by life
expectancy at birth (25 years and 85 years); second, educational attainment, as measured by a
combination of adult literacy (two-thirds weight) (0% and 100%) and combined primary, secondary
and tertiary enrolment ratios (one-third weight) (0% and 100%); and third standard of living, as
measured by real GDP per capita (PPP$) ($100 and $40,000 (PPP$)).For each of these indicators, fixed
minimum and maximum values have been set in order to construct the index :
General formula for computing individual for any component of the HDI :

Actual value - Minimum value
xi
xi
Index =
Maximum value - Minimum value
xi
xi
Accordingly, the HDI is a simple average of the life expectancy index, educational attainment index
and adjusted real GDP per capita (PPP$) index. Thus, it is derived by dividing the sum of these three
indices by 3. According to the Human Development Report, 2004 India ranked 127 in the group of
177 countries.
Economic Development Index (EDI) : National Council of Applied Economic Research (NCAER) of
New Delhi has developed a new measure called EDI. We may note that the EDI develops further on
the HDI and is based on three components the health attainment index, the education attainment
index, and per capita GDP of the economy. NCAER’s model can analyse policy changes in Government
expenditure on health and education and changes in public investment and tax rates on macro-
economic variables such as output, prices and the current account balance as well as on human
development in the country.
Self-Assessment

1. Choose the correct option:
1. The first census was completed in
(a) 1890 (b) 1872
(c) 1860 (d) None of these
2. The year ............... is known as the 'Year of Great Divide'.
(a) 1921 (b) 1940
(c) 1930 (d) None of these.
3. The country's first all India census was completed in
(a) 1880 (b) 1872
(c) 1890 (d) None of these.
4. The 14th census was completed in
(a) 2002 (b) 1991
(c) 2001 (d) 2010
6.3 Summary

• With the help of Indian census data, a concise demographic profile of the country can be prepared.
In 1872, the country’s first all India Census was completed. Decennial censuses have been
organised then on in 1881, 1891, 1901, 1911, 1921, etc. The 14th census was completed in March,
2001.

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