Question

5. What are the limitations of the per capita
income criteria of development ?
[CBSE 2014
Or
What is Per Capita Income ? Can it be
regarded as the sole indicator of
economic development of a country ? Give
four valid arguments to support your
answer.
[CBSE 2012]
​

Answer 1

Answer:

Per capita income (PCI) or average income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. It is calculated by dividing the area's total income by its total population.

Answer 2

Explanation:

1. It does not indicate the disparities in the distribution of income .e.g the wide gap between the incomes of extremely rich and very poor peoples.

2. It does not indicates long term sustainability as non renewable resource are liable to be exhausted.

3. The method of calculating per capita income also varies among countries thus it is not highly reliable for comparisons.