Economic development focuses on income only. For a long time the general notion about development was accumulation of wealth or economic assets. But human development focuses on expanding and widening of people’s choices as well as raising the levels of well being.

It covers almost all aspects of human life and people’s choices like economic, social, political, cultural, educational, physical, biological, mental and emotional. Income is only one of the many components of development. Human development places people at the centre of development and emphasises that the purpose of development is to enlarge all human choices, and not just income. It regards economic growth as essential but emphasises the need to pay attention to its quality and distribution.

If the socio-economic development of a country is modelled along human development framework, it can provide better understanding of development and its impact on the quality of life of the people. The Human Development Index (HDI) is developed as a means of measuring human development. The basic use of HDI is to measure a country’s level of development.

The Human Development Index (HDI) combines three basic indicators and their dimensions as:

  1. A Long and Healthy Life: Life expectancy at birth, as an index of population health and longevity
  2. Knowledge and Education: Adult Literacy Rate; The combined primary, secondary, and tertiary gross enrolment ratio
  3. A Decent Standard of Living: Gross domestic product (GDP), per capita at purchasing power parity (PPP) in United States dollars (US$)

The United Nations Development Programme (UNDP) launched Human Development Report in 1990, incorporating development related data in respect to the above mentioned indices. Since then this Report is published every year and the nations are ranked every year according to the level of improvements made in respect of each of the indices.