• About
  • Advertise
  • Privacy & Policy
  • Contact
Saturday, June 25, 2022
Finance Infinity
  • Home
  • News
  • Market Watch
  • Ministration
  • Opinion
  • Beyond Finances
No Result
View All Result
  • Home
  • News
  • Market Watch
  • Ministration
  • Opinion
  • Beyond Finances
No Result
View All Result
Finance Infinity
No Result
View All Result
Home Opinion

Why focus should move away from GDP to per capita income?

Relation between GDP and per capita income GDP is the sum of all its goods and services. Divide GDP by the number of people to get GDP per capita

Vedika Pandey by Vedika Pandey
November 16, 2021
in Opinion
0
GDP and per capita income
0
SHARES
16
VIEWS
Share on FacebookShare on Twitter

With the growing economy, the standard of living has improved significantly around the world. However, modern economics only takes into consideration the metric of economic growth – gross domestic product (GDP) in terms of goods and services produced in an accounting year, and it doesn’t reflect a nation’s welfare which can be measured by analyzing the per capita income.

GDP is treated as an all-encompassing unit for signifying a nation’s development by the policymakers and economists, ignoring the economic prosperity and social well-being. The factors like equitable distribution and happiness are not considered.

When we take per capita income into consideration, the income per person is exhibited more precisely, and when the per capita income has a wide gap between minimum and maximum income, it signifies that only one section of the society is flourishing. In this situation, the economy as an aggregate improves but when we look into it closely, only the rich section becomes richer.

Relation between GDP and per capita income

One way to determine a country’s wealth is by looking at its income per capita. The country’s gross domestic product (or GDP) is the sum of all its goods and services. Divide GDP by the number of people to get GDP per capita or income per person.

Focusing deeply on GDP and the economic growth of the society, economists forget to acknowledge the limitations of GDP and expand the measure of development so that it takes into account a society’s quality of life and equitable growth, but if we measure it through per capita income, the data would show the growth differently.

While the economists take into account the measures of development in terms of GDP growth rate, they neglect going beyond an inimical fixation towards higher production, which can be more aligned with the aspects of life that citizens truly value, and through which the society can be better served.

According to Keynesian economies, the national income shouldn’t just be the sum of private consumption, investment, and government spending. “We know that the government needs to focus on health, education, infrastructure, etc.”, Keynes said.

The GDP and GNI can grow at an ambitious level without the rich getting richer alone. The whole society needs to see improved incomes, and for that, the government should focus on the health and education levels of the population, because when these sectors flourish, it automatically leads the country towards growth.

The conditions for agriculture, as well as MSMEs, also need to be improved aggressively so that India reaches its big thrust. The US government gained that thrust in the 1920s with the rapid growth through industrialization.

GDP doesn’t take into account the equitable distribution of income since it takes income as an aggregate and not as per capita distribution, that’s why it can’t denote the difference between an unequal and egalitarian society even if their economy is of the equal size.

India needs alternative metrics to complement GDP in order to get a more comprehensive view of development. The policy-making should be such that it doesn’t exclusively prioritize economic growth. Bhutan has already taken steps in this direction and now it considers factors like equitable socio-economic development and good governance.

Thus, India can also move towards this direction gradually by focusing on the ease of living of its citizens. Ministry of Housing and Urban Affairs has taken several steps in the last few years to ease the process of doing business by developing the Ease of Living Index to measure the quality of living of the citizens across India.

The end goal of measuring the GDP should emphasize more on creating a just and equitable society that is economically thriving and offers citizens a meaningful quality of life and per capita income can be one potential solution for that.

Read more Financial News, Opinion, Ministration & More on Finance Infinity | Follow us on Twitter, Youtube & Pinterest

Tags: EconomyGDPindiaper capita income
Previous Post

Is Federal bank Share a Good Stock to Hold?

Next Post

Paytm IPO allotment status | Should you buy the Paytm Stock?

Vedika Pandey

Vedika Pandey

Related Posts

budget 2022
Ministration

Budget 2022: What can major industries expect in India?

January 22, 2022
PLI and Indian economy
Opinion

Can PLI help Indian economy beat China amid the third wave?

January 15, 2022
India’s export growth: A story too good to be true?
Opinion

India’s export growth: A story too good to be true?

January 13, 2022
Universal Basic Income
Opinion

Is Universal Basic Income a feasible option for a developing nation?

January 4, 2022
income inequality
Opinion

Why is rising income inequality a growing concern for countries?

December 21, 2021
women workforce in India
Opinion

India stands to gain economically through an increased women workforce

November 27, 2021
Next Post
Paytm Stock

Paytm IPO allotment status | Should you buy the Paytm Stock?

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Stock Market

  • Trending
  • Comments
  • Latest
India Post’s mobile bank facility

All about India Post’s mobile bank facility for its saving accounts customers

November 6, 2019
Advent to invest in Aditya Birla Capital Ltd

Advent to invest Rs 1,300 crore in Aditya Birla Capital Ltd

September 4, 2019
KPMG Future of Finance

KPMG Future of Finance: Data, Automation, and Integration

December 14, 2020
Axis Bank

Learning how to utilize digital channels for selling products with Axis Bank

January 9, 2020
Inflation

India’s inflation heat: How will RBI act to reduce the soaring inflation?

0
India Post decides to convert to Small Finance Bank

India Post decides to convert to Small Finance Bank, emphasizing on Digital transactions!

0
FPI Surcharge

FPI Surcharge: Finance ministry to consult Law ministry for providing immediate relief

0
National Housing Bank to infuse Rs 10,000 crore in housing finance companies

National Housing Bank to infuse Rs 10,000 crore in housing finance companies

0
Inflation

India’s inflation heat: How will RBI act to reduce the soaring inflation?

May 17, 2022
RBI hikes Repo Rate

RBI hikes Repo Rate: Will it impact your Finances?

May 11, 2022
RBI-digital banking units

New guidelines for digital banking units released by RBI

April 11, 2022
Arvind Mediratta

Arvind Mediratta: A man on a mission

March 25, 2022

Recent News

Inflation

India’s inflation heat: How will RBI act to reduce the soaring inflation?

May 17, 2022
RBI hikes Repo Rate

RBI hikes Repo Rate: Will it impact your Finances?

May 11, 2022
RBI-digital banking units

New guidelines for digital banking units released by RBI

April 11, 2022
Arvind Mediratta

Arvind Mediratta: A man on a mission

March 25, 2022
Facebook Twitter Youtube Instagram
Finance Infinity

Finance Infinity is a media platform which delivers latest financial information. Find news, articles, editorials and blogs written by our dedicated team of professionals and get yourself updated on what's happening in the business world.

Browse by Category

  • Beyond Finances
  • Business
  • Market Watch
  • Ministration
  • Mobile
  • News
  • Opinion
  • Tech
  • Tips

Recent News

Inflation

India’s inflation heat: How will RBI act to reduce the soaring inflation?

May 17, 2022
RBI hikes Repo Rate

RBI hikes Repo Rate: Will it impact your Finances?

May 11, 2022

Copyright© 2021 Financeinfinity - All rights reserved

No Result
View All Result
  • Home
  • News
  • Market Watch
  • Ministration
  • Opinion
  • Beyond Finances

Copyright© 2021 Financeinfinity - All rights reserved

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In