There are various purposes of calculating HDI, such as HDI helps to know the development achieved by the country, we can compare our country with other countries on the basis of development, to know the development activities carried out during the year and it also helps us to find out the fault of our development programs and bring the necessary changes for correction.

HDI is different for GDI in following ways:
HDI GDI
The full for of HDI is Human Development Index. The full form of GDI is Gender-related Development Index.
Measuring development of peoples of particular place or country using different indicators is called HDI Measuring development only of women of particular place or country using different indicators is called GDI.
HDI is measured for the whole population. GDI is measured only for women.
The volume of total all the goods and services produced by a country in a specific year including the total income from the foreign countries is called Gross National Product.
HDI stands for Human Development Index which shows the comparative development of the people of particular country that outcomes from the calculation of per capita income, life expectance and literacy rate combined. 
The criteria include:
  • Life expectancy
  • Per capita income
  • literacy rate
  • population with safe drinking water
  • population with safe sanitation system
  • Daily calorie supply
  • electricity consumption
  • Health services etc.
 

The reasonsor not increasing per capita income of Nepalare:

  • Poverty
  • Illiteracy
  • Poor health condition
  • Involvement of majority population in agriculture
  • Seasonal occupation
  • Lack of income
  • Lack of income generating sources
  • Unstable politics
  • Lack of long-term development
  • Disturbance in industrialization, trade and services etc

As per the formula,
i. Minimum per capita of the world to be reduced from the per capita income of the country of which the HDI is to be calculated 400-100 = 300
ii. The minimum per capita income of the world to be deduced from maximum per capita income of the world= 65000- 100 = 64,900
iii. The outcome of (i) to be divided from the resultant number (ii) above 300/64,900.
iv. The minimum life expectancy of the world to be deducted from the average life expectancy of the country of which HDI is to be calculated= 65- 25= 40
v. The minimum life expectancy of the world to be deduced from the maximum life expectancy of the world = 85-25 = 60
vi. The outcome of (i) to be divided from the resultant number (ii) above 40/60.
vii. The literacy of the country of which HDI is to be divided by 100= 60/100
Viii. Now, add the outcome of iii, vi and vii and divided by 3, (300/64900+ 40/60 + 60/100)/3.
Thus, HDI of Nepal=0.42.