Indian human capital index: cross states disparity

Purpose Human capital is an essential element for sustainability in the knowledge economy. Human capital index (HCI) is a measure of the quantity and quality of education, health and survival components of the human capital of a country or a region. This study aims to calculate HCI for 28 states and seven union territories of India and explore disparity among these on different HCI indicators. Design/methodology/approach The World Bank methodology is used to calculate survival and education components of the HCI whereas, health component is based on secondary data due to data limitations. Based on control charts of mean with three sigma limits, the performance of each state and union territory is assessed for a given HCI parameter and classified as good, average or below average. Findings For survival parameter of HCI, 10 states are above average limit, 10 are within the average limit and 15 states are below the average limit. Contrary, 15 states are within the average limit in the education parameter of HCI. The states are almost equally divided in all the three categories for health parameter of HCI. Overall, Kerala tops the list, but Uttar Pradesh and Bihar have the worst performance in all three parameters of HCI. Originality/value This attempt to identify disparity in state wise HCI is a significant contribution that can guide policymakers to formulate effective and specific policies that are inclusive of different perspectives and promote country’s growth.