Question

What is the criterion used by the World Bank ok in classifying different countries? What are the limitations of this criterion if any?

Answer 1

World bank classifies countries on the bases of their per capita income/average income

It's limitation is that it hides the inequalities of economy

Answer 2

Per capita income is the the main criterion used by the World bank to classify the countries with per capita income of US $ 12236 per annum in 2016 are the high income or rich countries.

And those with US $1005 or less than it are called the low income or poor countries.

India comes in the category of low middle-income countries because it's per capita income was just US $1840 per annum in 2016.

Hence per capita income is useful for comparison but it does not tell us how this income is distributed among people. It is a serious limitation of this criterion.