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Answer» Per capita income as a development index has certain limitations: - Per capita income is an average income. For example, assume that the per capita income of a country is Rs. 40,000. This does not mean that each individual of the country receives an income.
- Of Rs. 40,000. It includes the population earning crores of rupees as well as those with very low income. So, this is merely a numerical calculation.
- While calculating economic development on the basis of per capita income, It cannot be claimed that improvement in the quality of living has been attained if the rich-poor disparity persists.
- Per capita income as a development index ignores factors like education, availability of nutritious food and health care facilities that improve the quality of living.
- Concerned only with economic growth, per-capita income as a development index does not take into account social welfare and the equitable distribution of income.
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