Introduction

Human development index (HDI) is defined as "a composite index combining indicators representing three dimensions — longevity (life expectancy at birth); knowledge (adult literacy rate and mean years of schooling); and income (real GDP per capita in purchasing power parityin US dollars)".

• Thus the concept of HDI reflects achievements in the most basic human capabilities, viz., leading a long life, being knowledgeable and enjoying a decent standard of living. Hence, these three variables have been chosen to represent those dimensions. 

• The HDI values ranges between 0 to 1. The HDI value for a country shows the distance that it has towards maximum possible value to 1 and also allows comparisons with other countries.

Methodology

• To construct the index, fixed MINIMUM and MAXIMUM values have been established for each of these indicators. 

- Life expectancy at birth : 25 years and 85 years 

- Adult literacy rate : 0 per cent and 100 per cent 

- Combined gross enrolment ratio : 0 per cent and 100 per cent 

- Real GDP per capita (PPP$): $ 100 and $ 40,000 (PPP $) 

Human Poverty Index (HPI) 

HPI-1 measures deprivation in the three basic dimensions 

The dimensions used for HPI-1 for developing countries are: 

a. A long and healthy life-vulnerability to death at a relatively early age, as measured by the probability at birth of not surviving to age 40. 

b. Knowledge-exclusion from the world of reading and communications, as measured by the adult illiteracy rate. 

c. A decent standard of living-lack of access to overall economic provisioning, as measured by the unweighted average of two indicators, the percentage of the population not using an improved water source and the percentage of children under weight-for-age. 

The HPI-2 measures deprivations in the same dimensions as the HPI-1 and also captures social exclusion. Thus it reflects deprivation in four dimensions: 

a. A long and healthy life-vulnerability to death at a relatively early age, as measured by the probability at birth of not surviving to age 60. 

b. Knowledge-exclusion from the world o. reading are, communications, as measured by the percentage adults (age 16-65) lacking functional literacy skills. 

c. A decent standard of living-as measured by the percentage of people living below the income poverty line (50% of the median adjusted household disposable income)

d. Social exclusion-as measured,by the rate of long-ten unemployment (12 months or more).