The UNDP annually publishes an extensive analysis of global
HD situation in the Human Development Report (HDR) along with
country rankings. However, it is often argued that the UNDP HD
indicators are perhaps too narrow in nature, and inclusion of certain
important socio-economic variables would enrich the analysis further.
The Latent Variable Approach adopted by Nagar and Basu (2001)
involving 174 Countriesconfirmsthatwith inclusion Ofadditional socio-
economic variables, the alternate HD rankings differ significantly from
the official UNDP ranking.
While India's HD ranking remained in the low HD category
throughout nineties, in 2002 it graduated to medium HD category with
the HDI score of 0.577, as compared to the corresponding figure of
0.439 in 1990. India's global HDI rank has improved from 132 in 1999
to 127 in 2003.13 Recently in association with UNDP, the Government of
India has started analysing the State-wise HD status. The National
Human Development Report 2001, brought out by the Planning
Commission (Government of India, 2002), is worth mentioning in this
regard. While the report ranked Kerala, Punjab and Tamil Nadu as the
toppers; Bihar, Madhya Pradesh and Uttar Pradesh were at the other
extreme in HD scale. The alternate index developed by Guha and
Chakraborty (2003), in line with Nagar and Basu (2001), however
showed that inclusion of other socio-economic variables changes the
State rankings to some extent. For instance, Tamil Nadu, ranked third
by NHDR, slides down the ladder to the eighth place according to the
alternate index.
13 In relative sense, India's position actually does not Iookthat bad as UNDP considered
130 and 177 countries in 1990 and 2003 respectively.
12
3. Methodology and Data
3.1 Environmental Quality Index (EQI)
The EQI for the States is postulated to be linearly dependent
on a set Ofobservable indicators and has been determined by adopting
the HDI method, by putting the selected variables under eight broad
categories mentioned in Table 2. The idea is that all the 63
environmental variables, when combined, give a composite EQI ranking
of the States, unobservable otherwise. We assume Xij to be the value
ofthe ith indicator for jth State of India with respect to X (or environmental
quality), where X consists of a large number of indicators varying from
6 to 12 (see Appendix 3). As defined earlier, X's are AIRPOL, INDOOR,
GHGS, ENERGY, FOREST, WATER, NPSP and LAND respectively.
In line with the HDI method, we transform the indicators into
their standardised form, by which the adjusted values of Xij (i.e., EXij's)
to be used for the analysis become:
EXt =(Xt -X')∕(X^-X^orEXl.=(χ∙∙-Xl)∕(χ∙∙-χ∙')
where, Xi* and Xi** are the minimum and maximum values for
the ith indicator of environmental quality X respectively.14 Now, EQIXj,
i.e., the environmental quality index score for the jth State with respect
to each individual environmental quality X (which constitutes of n number
of indicators, n varies from 6 to 12), is arrived at by summing the EXijs
over i by using the following formula:
EQIX1 =-t,EXlj
1 The variables for which these two alternate formulas are used are specified at the
end of Appendix 3.