Indicators of development: their relationships and India

Abstract

Research over the past years has shown that GDP/capita is grossly inadequate as a comprehensive indicator of development. We studied the different indicators though a literature review process and have analysed the various facets of each indicator, including their advantages and disadvantages. We have then explored the relationship between GDP/capita and other indicators like HDI, Gini Coefficient, Happiness Index and more, both internationally as well as for Indian states. We have identified the statistical correlations and explored the explanations for the same, making a case for different indices. The Beyond GDP initiative, under the umbrella of the UNDP, has been instrumental in publishing multiple new indices and composites that help resolve the same problem. However, the work has largely been done in an international context and countries like India have not seen significant research into the same. A survey of economics students at top-tier Indian B-schools also reveals a glaring gap in awareness as well as usage of indicators other than GDP/capita. The analysis showed that there is a noticeable difference in the GDP/capita rank vis-à-vis other indices rankings of quite a few countries. There is evidence to show that we need a comprehensive set of indicators, moving “beyond GDP”, in order to properly assess and monitor our growth and development as a society.