In our quest to assess a country’s progress, the traditional economic metric Gross Domestic Product (GDP) has been the go-to indicator. However, it is essential to recognize the limitations of relying solely on GDP as a measure of human well-being. India, as a rapidly developing nation, needs to adopt a more comprehensive approach by considering other vital metrics that can provide a more accurate reflection of its citizens’ quality of life and the country’s overall advancement. In this article, we delve into India’s perspective on GDP as a measure of well-being and shed light on other crucial indices that deserve our attention.
The Limitations of GDP
1. GDP’s Narrow Focus
GDP is a monetary measure that represents the total value of goods and services produced within a country’s borders during a specific period. It is a vital tool for assessing economic growth and development. However, the narrow focus of GDP limits the ability to measure the overall human well-being of a nation and its people. India’s diverse population and socio-economic challenges demand a broader set of measurements to capture the complexities of human welfare.
2. Neglecting Income Inequality
One of the significant drawbacks of relying solely on GDP is its disregard for income inequality within a country. While GDP growth may suggest economic prosperity, it does not account for how wealth is distributed among the population. In India, where income disparities are prevalent, focusing only on GDP can mask the reality of the economic conditions of various social groups. To achieve a more equitable society, India must consider indices that address and bridge the wealth gap. India should focus on Per capita income which is currently low in the perspective of GDP. It is $2,389 and India ranks 139th among other countries. Also according to a recent report if a family earns Rs 25000/ month they are in the top 10% of the Indian population, this shows how much income inequality we have in India. This kind of income equality really causes issues and even if we become a 5 or 10 trillion economy poor people will get more poor.
3. Disregard for Social and Environmental Factors
GDP fails to incorporate essential social and environmental factors that profoundly measure human well-being. It does not account for critical indicators such as education, healthcare, life expectancy, and living standards. Ignoring these factors can lead to skewed perceptions of a nation’s progress. GDP does not consider the environmental cost of economic activities, such as pollution and resource depletion. India’s commitment to sustainable development requires accounting for these factors in its progress evaluation.
According to a recent report, India has slipped from 117 to 120th rank in Sustainable Development Goals (SDG) and has a score of 66 out of 100.
Alternative Metrics for Measuring Well-Being
1. Human Development Index (HDI)
The Human Development Index takes a multi-dimensional approach to assessing a country’s well-being. HDI considers three key dimensions: health, education, and standard of living. These dimensions are measured through life expectancy, education level (mean years of schooling and expected years of schooling), and per capita income. By factoring in these crucial aspects, HDI provides a more comprehensive reflection of human well-being. It allows policymakers to identify areas of improvement and implement targeted interventions.
Stat: As of the latest available data in 2023, India’s HDI is 0.645, ranking it 132nd out of 191 countries, according to the United Nations Development Programme (UNDP).
2. Genuine Progress Indicator (GPI)
The Genuine Progress Indicator aims to address the limitations of GDP by considering various economic, social, and environmental factors. GPI takes into account income distribution, household work, natural resource depletion, pollution, and social factors, such as crime rates and education levels. By incorporating these elements, GPI offers a more accurate representation of the true well-being and sustainability of a nation.
Stat: Unfortunately, specific GPI data for India is not readily available. The computation of GPI requires significant data collection and analysis, which is often challenging for many countries.
3. Bhutan’s Gross National Happiness (GNH)
Bhutan’s unique approach to measuring well-being through Gross National Happiness is a model that focuses on non-economic aspects of life. GNH takes into account nine key domains, including psychological well-being, time use, cultural diversity, and environmental resilience. Bhutan aims to create a more balanced and fulfilled society by giving equal importance to these non-economic factors.
Stat: As of the last GNH survey in 2022, Bhutan’s GNH index was 0.781, indicating the happiness and well-being of its citizens. However, direct comparisons of GNH with other indices like HDI or GDP are challenging due to the different methodologies used. India’s happiness index rank as of 2023 is 126th, making it one of the least happiest countries in the world.
India’s Path Towards Well-Being
1. Education and Skill Development
Investing in education and skill development is paramount for India’s progress and overall well-being. Education empowers individuals with the knowledge, skills, and critical thinking abilities necessary to participate effectively in the economy and society. A well-educated populace leads to increased productivity, innovation, and earning potential, ultimately contributing to a more robust economy and enhanced well-being.
Stat: According to World Bank data, in 2021, the literacy rate in India was around 77.70%, indicating room for improvement in providing access to education for all citizens.
2. Universal Healthcare Access
Ensuring universal healthcare access is crucial for addressing India’s health challenges and improving the overall well-being of its people. Accessible and affordable healthcare services not only increase life expectancy but also enhance the quality of life and productivity of the workforce. Prioritizing health initiatives will lead to a healthier, more productive, and happier population.
Stat: According to the World Health Organization, India’s life expectancy at birth in 2023 was approximately 70.42 years, showcasing the need for continued efforts to improve healthcare access and quality.
3. Sustainable Development and Environmental Conservation
As India experiences rapid economic growth and urbanization, it must simultaneously focus on sustainable development and environmental conservation. Integrating eco-friendly practices in industries, promoting renewable energy, and safeguarding natural resources are vital for preserving the environment for future generations. Prioritizing sustainability will contribute to the overall well-being of the country’s citizens and protect them from the adverse effects of environmental degradation.
Stat: India’s greenhouse gas emissions have been on the rise, and as of 2022, the country was the third-largest emitter globally, emitting 2.6 billion tonnes of CO2 annually according to the Global Carbon Project.
4. Social Safety Nets and Poverty Alleviation
Eradicating poverty and ensuring social security for all citizens are critical steps in fostering a more inclusive and equitable society. Implementing robust social safety nets and poverty alleviation programs can uplift marginalized communities, reduce income disparities, and provide a more stable and secure living environment.
Stat: According to the World Bank, India lifted around 271 million people out of poverty between 2006 and 2016, showcasing progress and highlighting the need for continued efforts.
In conclusion, while GDP has been the conventional measure of a country’s progress it has its own limitations. India must recognize its limitations and adopt a more comprehensive approach to measuring well-being. Using alternative metrics such as HDI, GPI, and Bhutan’s GNH other than GDP to measure can provide a more accurate representation of human well-being and ensure that India’s progress is sustainable and inclusive.
By investing in education, improving healthcare access, promoting sustainability, and addressing income inequality, India can pave the way for a brighter future for its citizens. As a diverse and dynamic nation, India’s journey towards well-being must focus on creating a prosperous, healthy, and happy society for all.