It is important to recognize that empowerment of people or human resource development must be central in the development planning. The development of human resources not only is desirable in itself, but also raises productivity and lowers reproductivity. During the period between 1950s and 1970, there was a major shift in the strategies of development planning in different countries of the world. The approach generally adopted for socio-economic development and planning during the 1950s was purely growth oriented and lack of capital and shortage of supporting physical infrastructure were seen as the key bottlenecks to growth. More emphasis was given on increasing the rate of savings and investment and the main objective was to increase national income and per capita income. Dissatisfaction with this approach was built up in the 1960s due to the neglect of social sectors and little importance given to investment in human capital. Subsequently an era began in planning for development in which investment in human capital was considered as important as other forms of investments. The rise in per capita income was not considered to be an appropriate indicator of development but equal distribution of national income, removal of poverty and improvement in quality of life of the people became the major goals of development planning. Now, qualitative development of human resource is considered to be important for proper utilization of natural resources of the country.

Human development is defined as the process of enlarging people's freedom, opportunities and improving their well-being. The central key of human development approach is the concept of capabilities. Capabilities refer what people can do and what they can become. These two are the equipment one has to pursue a life of value. Basic capabilities valued by virtually everyone include: good health, access to knowledge, and a decent material standard of living.

At the time of preparing First Five Year Plan of India in 1951, it was stated by the planning commission that the objective of planned development would be 'to open to all people opportunities for a richer and more varied life. This in indeed the essence of the idea of human development as propagated and defined by the United Nation Development Programme (UNDP) in 1990, emphasizing the objective of development as expansion of human capabilities and enlarge the range of people's choices. The Human Development Report (HDR) published annually by the UNDP since 1990 estimates the Human Development Index (HDI) in terms of three basic capabilities: to live a long and healthy life, to be educated and knowledgeable, and to enjoy a decent economic standard of living. A country scores higher HDI when the life expectancy at birth is longer, the educational period is longer and the income per capita is higher. Rich and advanced countries majored in terms of GDP (Gross Domestic Product) alone do not guarantee higher level human development in those countries. Countries ranking lower in GDP terms like Norway or Singapore have higher Human Development (With HDI as 0.953 and 0.932 respectively for 2017-18). This indicates that there are more factors of development in human society than the economic side of it. Therefore, it has been increasingly felt that material well-being is important but it is also significant to enjoy sufficient well-being in culture, community, family, governance, knowledge, wisdom, equality of gender, spirituality, psychological welfare, a balanced use of time and harmony with environment etc. For promoting human development major dimensions of inclusive development become important emphasizing social and human welfare, poverty alleviation, employment generation, empowerment of women and upliftment of weaker sections of the society etc. Thus, improvement in both income and non-income aspects are required for effective and balanced human development and empowerment.