Human development and human resources

The first principle

Income is a means, not an end: what matters is what people are able to do and to be, whether they can live long and healthy lives, read and reason, earn with dignity and take part in the life of their community. Human development is the widening of these choices, and human resources are the same people seen from the side of the economy, as the skills, health and knowledge that produce growth. The two views meet in one conclusion, that a country which neglects the health and learning of its people will be poorer in both freedom and output, however fast its income grows for a while.

The core

The idea of human development

• Amartya Sen's capability approach. Sen argued that development should be judged by the capabilities people have, meaning the real freedoms to achieve things they value, and not by income or goods alone. In Development as Freedom (1999) he treated freedom both as the end of development and as its main means.
• Mahbub ul Haq and the Human Development Report. Haq put the idea into practice at the United Nations Development Programme (UNDP), whose first Human Development Report in 1990 defined human development as "a process of enlarging people's choices".
• Human Development Index (HDI). It combines three dimensions: a long and healthy life (life expectancy at birth), knowledge (mean years of schooling of adults and expected years of schooling of children) and a decent standard of living (gross national income per person, at purchasing power parity). Since 2010 it uses a geometric mean, so a very low score on one dimension cannot be fully made up by a high score on another.
• The family of indices. The inequality adjusted HDI discounts the HDI for unequal distribution within a country, the Gender Development Index compares the HDI of women and men, the Gender Inequality Index measures loss from inequality in reproductive health, empowerment and the labour market, and the Multidimensional Poverty Index counts overlapping deprivations in health, education and living standards.

From human development to human resources

• Human capital. Economists treat the health, knowledge and skills of workers as capital, because spending on them raises future output just as investment in machines does. The World Bank's Human Capital Index measures the productivity a child born today can expect to reach as a worker, against full health and complete education; India scored 0.49 in 2020, meaning such a child would reach about half of that potential.
• Human resource development (HRD). HRD is the deliberate building of this capital across a life: nutrition and care in early childhood, schooling that produces real learning, skills matched to work, health that keeps people productive, and jobs that use what they have learnt. A weak link anywhere wastes the investment made before it.

Dimensions

• Economic. Healthy and educated workers are more productive, adapt to new technology and move into higher value sectors, which is the route East Asian economies took when they invested in schooling and health before they became rich.
• Social. Education and health widen choices most for those starting furthest behind: women, Scheduled Castes and Scheduled Tribes, and the rural poor. Human development is therefore a measure of inclusion as much as of progress.
• Political. Informed and healthy citizens take part in democracy more fully and hold governments to account, which in turn improves public services.
• Constitutional. Article 21A makes elementary education a Fundamental Right, while Articles 41, 45 and 47 direct the state towards education, early childhood care, nutrition and public health, and the Supreme Court has read the right to health into Article 21.
• Demographic. India's working age population will remain large for the next two decades, and the Economic Survey 2018 to 19 expected the working age share to peak around 2041. This demographic dividend becomes growth only if the young are healthy, educated and employed.

In practice

Where India stands

• Ranking. In the Human Development Report 2023 to 24, India ranked 134 of 193 countries for 2022. In the Human Development Report 2025 it ranked 130 of 193 for 2023, with an HDI of 0.685, which places it in the medium human development group. India loses a sizeable part of its HDI once inequality is accounted for, and its Gender Inequality Index reflects wide gaps in women's paid work and representation.
• Human capital. The Human Capital Index score of 0.49 (2020) is below that of several countries with lower incomes, mainly because of stunting among children and the low learning that children achieve in their years at school.
• Women's work. The female labour force participation rate (ages 15 and above, usual status) in the Periodic Labour Force Survey (PLFS) rose from 23.3 per cent in 2017 to 18 to 41.7 per cent in 2023 to 24, though much of the rise is in self employment and unpaid work in family enterprises, mostly in agriculture.

Source: Periodic Labour Force Survey, annual reports, Ministry of Statistics and Programme Implementation.

Why high growth has not brought high human development

• Growth without enough jobs. Growth has been led by services and capital intensive industry that create few jobs, while agriculture still holds a large share of workers at low productivity, so rising output has not meant rising incomes for most workers.
• Low public spending. Public spending on education has stayed around 4 to 4.6 per cent of gross domestic product (GDP) against the long standing target of 6 per cent, and government spending on health remains below the 2.5 per cent of GDP sought by the National Health Policy 2017, so households pay a large share of health costs out of pocket.
• Informality. Most workers are in the informal sector without written contracts, social security or training, which keeps productivity and incomes low.
• Nutrition and learning. Stunting affected 35.5 per cent of children under five in National Family Health Survey (NFHS) 5 (2019 to 21), and surveys of learning find many children unable to read simple text after years in school, which is called learning poverty.
• Regional and gender gaps. Southern and western states have far better health and education outcomes than the populous northern and central states, and low participation of women in paid work wastes much of the investment made in girls' schooling.
• Inequality. When gains go mainly to the top, average income rises faster than the capabilities of the median citizen, which is why the inequality adjusted HDI lags the HDI.

Education: welfare obligation or strategic investment

• As a welfare obligation. Article 21A, the Right of Children to Free and Compulsory Education (RTE) Act, 2009 and the Directive Principles make education a right that the state owes every child regardless of the return, because without it other rights cannot be used. On this view equity comes first: universal access, free schooling and support for the disadvantaged.
• As a strategic investment. A knowledge driven economy needs research, advanced skills and world class universities, and returns to education, both private and social, are high. The Education Commission headed by D. S. Kothari (1964 to 66) recommended spending 6 per cent of national income on education, and the National Education Policy (NEP) 2020 reaffirmed 6 per cent of GDP.
• Reconciling the two. The two views compete only when budgets are small. A sound foundation of literacy and numeracy for all is both a welfare duty and the best investment, because excellence at the top draws on a wide base. The details of school and higher education are in the notes on school education and on higher education, skills and employment.

Issues and way forward

• Raise and protect social spending. Moving public spending towards 6 per cent of GDP for education and 2.5 per cent for health, as NEP 2020 and the National Health Policy 2017 propose, with more funds for primary care and foundational schooling where returns are highest.
• Measure learning, not enrolment. Schools are nearly universal, so the target now is what children learn. Regular assessment, teacher training and remedial teaching under the foundational literacy and numeracy mission should guide funding.
• Start in early childhood. Most brain development happens before six, so better anganwadi services, maternal nutrition and care in the first thousand days give the highest return of any HRD spending.
• Link skills to jobs. Skilling must follow local demand, with apprenticeships, industry partnerships and recognition of prior learning, and labour intensive sectors such as textiles, food processing and construction need support so that skilled workers find work.
• Bring women into paid work. Safe transport, child care, flexible work and skilling of women would turn a rising participation rate into productive employment.
• Better and more frequent data. Human development planning rests on the Census of 2011 and on surveys that come years apart; regular, district level data on health, learning and employment would allow budgets to follow need.

Common confusions

• Growth and development. Growth is a rise in output; development is a rise in the capabilities of people. Growth can occur without development when its gains are narrow.
• HDI and the Human Capital Index. The HDI measures well being across health, education and income now; the Human Capital Index measures the productivity a child born today is expected to reach. The first is UNDP's, the second the World Bank's.
• Schooling and learning. Years of schooling count time spent in school; learning counts what children actually know. The HDI uses schooling, which is why it can rise while learning stays low.
• Demographic dividend and demographic burden. A large working age population is a dividend only if it is healthy, skilled and employed; otherwise it becomes a burden of unemployment.

For the exam

• Keyword bank: capability approach, development as freedom, Human Development Index, inequality adjusted HDI, Gender Inequality Index, Human Capital Index, human resource development, jobless growth, learning poverty, informality, Kothari Commission, 6 per cent of GDP, demographic dividend, female labour force participation.
• Practise the previous year questions on this topic →
• Use in an answer:
  • Introduction with data: "India ranked 130 of 193 countries on the Human Development Index in the Human Development Report 2025, despite being among the fastest growing large economies."
  • Introduction with a quote: "The first Human Development Report (1990) defined human development as a process of enlarging people's choices, which makes health, education and work the measure of progress."
  • Conclusion: "India's demographic dividend will pay out only if growth is turned into healthy, learning and working people; human development is therefore the condition of growth, not its by product."
  • Conclusion: "Treating education and health as both a duty owed to every citizen and an investment in national strength removes the false choice between welfare and growth."