WHAT?

The IHDI is an advanced version of the Human Development Index (HDI) that adjusts for inequality in the distribution of each of the three HDI components:

1. Health
2. Education
3. Income

It reflects the actual level of human development experienced by the population — not just the potential level (as in HDI).

Purpose
 

• HDI assumes equal distribution of achievements.
• IHDI penalizes a country’s HDI score if there's inequality in life expectancy, education, or income.
• So, greater the inequality, greater the gap between HDI and IHDI.

How is IHDI Calculated?
 

HDI has Life Expectancy Index (LEI), Education Index (EI) and Income Index (II). Adjust each index for inequality using the Atkinson Inequality Index, which reflects distributional inequality within each dimension.

Combine inequality-adjusted indices using the geometric mean:

IHDI = (LEI^* X  EI^* X II^*)^1/3
LEI^*,  EI^*, and II^* are the inequality-adjusted dimension indices

IHDI vs HDI Interpretation
 

India’s IHDI Snapshot (2025 Report)

HDI: 0.685

IHDI: ~0.475

Loss due to inequality: ~30.7%
→ One of the highest among major economies