Distinguish between the Human Development Index (HDI) and the Inequality-adjusted Human Development Index (IHDI) with special reference to India. Why is the IHDI considered a better indicator of inclusive growth? (Answer in 150 words)

Introduction

HDI measures average achievements; IHDI discounts them for inequality in distribution across people.

HDI versus IHDI

• HDI: combines life expectancy, mean and expected years of schooling, and GNI per capita.
• IHDI: adjusts each dimension for inequality using the Atkinson measure; it equals HDI when distribution is perfectly equal.
• India’s substantial loss from HDI to IHDI indicates that averages conceal unequal access and outcomes across gender, caste, region and income.

Why IHDI is better

• It captures both the level and distribution of development.
• It reveals whether growth translates into broad-based capabilities rather than elite gains.
• It guides targeted spending on health, education, social protection and regional inclusion.

Keywords: capabilities, inequality discount, inclusive growth, Atkinson index, human capital.