Question

what are the set barks of per capita income as a criteria of development. in 5 marks

Answer 1

(i) A rise in per capita income is due to rise in prices and not due to increase in physical output, it is not a reliable index of economic development.
(ii) National income rises but its distribution makes the rich richer and the poor poorer.
(iii) It excludes all non-marketed goods and services, even though they may be important for human happiness and better quality of life.
(iv) Rise in per capita income may be due to use of modern capital intensive technology in production which may be labour displacing in nature thus adversely affecting the poor masses.
(v) If rate of population growth, is higher than the rate of growth of national income, this will lead to fall in per capita availability of goods and services and economic welfare.
(vi) Contribution of commodity to economic welfare may be higher than its money value e.g., money value of salt, needle, thread, etc. included in national income is lower than their contribution to economic welfare.
[vii] Sometime the income of the countries wont be very high but will be well developed in education a nd health fields .