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Economic Growth and Human Well-being in India: Evidence through adjusted GDP measure

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Abstract

The outcome of economic growth is visualised as the well-being of citizens or human well-being (HWB). However, it has been a great challenge to measure HWB. Though there are known reasons for considering GDP and its growth as a measure of overall development and progress of nations, yet mostly it is being used as a gospel indicator to compare nations and design appropriate policies. This paper is an effort to develop a comprehensive adjusted GDP to measure HWB through secondary data for thirty years (1990–91 to 2019–20) in India. We make thirty-five adjustments to net national income (NNI) to compute the adjusted national income (ANI) index based on the system analysis approach. The empirical findings show that the gap between NNI and ANI has been growing over time, and the ANI index shows an increasing trend. Through the analysis it is suggested that economic growth should be focused only if it improves HWB (full or partial). The paper attempts to make intervention into policy shift for improving HWB vis-à-vis happiness of people.

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Notes

  1. The twenty-first century has witnessed unprecedented improvement in living standards almost everywhere in the world. Economic wellbeing, measured by GDP per capita, doubled in poor countries. Child mortality has halved relative to the 1990s, and the proportion of children attending school has increased from 56 to 80 percent globally. People with low human development fell from 3 billion to 926 million or 60 percent of the world population to 12 percent of the population; people with high and very high human development rise from 1.3 billion to 3.8 billion or 24 percent of the global population to 51 percent of the population. (Data taken from UNDP data source).

  2. India, despite being the 3rd and 5th largest economy in terms of PPP and nominal term (respectively), its position in the indicators reflecting a non-economic aspect of people’s life is not satisfactory. (Shrotryia & Singh, 2020b).

  3. Richard Easterlin considered human happiness as an extension of social welfare (Easterlin, 1974: 90).

  4. Available at https://apps.bea.gov/scb/account_articles/general/0100od/maintext.htm

  5. Three factors influence the choice of the Atkinson inequality measure: (i) subgroup consistency, (ii) sensitivity to inequality at the lower end of the distribution, and (iii) the simplicity of computation and mathematical elegance of the resulting composite Inequality-adjusted Human Development Index” (UNDP, 2020).

  6. Budget Estimates.

  7. See for examples, Europe: [Austria] (Stockhammer et al., 1997); Belgium (Bleys, 2008); Germany, Italy, Netherland (Rosenberg et al., 1995); Poland (Gil & Sleszynski, 2003); Sweden (Stymne & Jackson, 2000); UK (Jackson et al., 2008); North America [America] (Talberth et al., 2007); South America [Chile] (Castaneda, 1999); Australia (Lawn, 2008b); New Zealand (Forgie et al., 2008); Asia [China] (Wen et al., 2008); India (Lawn, 2008a); Japan (Makino, 2008); Thailand (Clarke & Shaw, 2008) and Vietnam (Hong et al., 2008).

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  1. Shri Ram College of Commerce, University of Delhi, New Delhi, India

    Shashank Vikram Pratap Singh

  2. Department of Commerce, Delhi School of Economics, University of Delhi, New Delhi, India

    V. K. Shrotryia

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Singh, S.V.P., Shrotryia, V.K. Economic Growth and Human Well-being in India: Evidence through adjusted GDP measure. Soc Indic Res 171, 987–1018 (2024). https://doi.org/10.1007/s11205-023-03283-7

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