The following three suggestions
have been made for correcting the
weaknesses of the measure of per capita
income:
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Distribution of national income over
individuals is an important
dimension, which cannot be
ignored. National income and its
distribution, both, have to be
considered together. It has been
argued that the welfare of a society
depends on what is the size of the
cake and how it is distributed over
people.
Over time, people have come to
enjoy more leisure, which,
according to many, may be the
ultimate aim of all activities. It has,
therefore, been argued that its value
needs to be added to the national
income in order to make it yield a
better measure of welfare.
A suggestion was also made to
deduct the social cost of harmful
effects in terms of variety of
pollutions that many economic
activities entail.
Evolution of Alternative Measures
These corrections, however, did not leave
many people satisfied and national
income or its per capita variant as
indicators of welfare have been in use
for long though with reservations.
However, in the last few decades, some
attempts have been made to develop
some alternative indicators of economic
welfare and of social development.
Search for better indicators of social
development has continued.
We often read in the newspaper that
Sri Lanka has a fairly high life
expectancy, low infant mortality and
good literacy levels. The levels in Sri
Lanka are comparable to their
counterparts in developed countries.
Our own state Kerala has done wonders
on literacy front as well as on
demography front. Tamil Nadu is also
faring well. Therefore, it was natural for
researchers to try to develop such indices
as would capture these social
dimensions.
There is an UN institution called
United Nations Research Institute for
Social Development (UNRISD). In this
institute, people tried to develop such
indices as would encompass social,
political and economic variables
(indicators) impinging upon industrialisation,
urbanisation and modernisation.
They went on enlisting indicators,
which they thought, reflected some or
the other dimension of development. At
one stage, they listed as many as 73
indicators though, finally, they selected
only 16 as it was found that many of the
indicators were reflected through others.
hospital beds and number of doctors per
lakh of population. They also included
enrolment rates, electricity consumption
and steel consumption per head. Length
of metalled roads, number of villages
electrified and availability of post offices
also got their way into it. So did the
character of agricultural organisation.
These are important indicators and are
considered by many as the ends in
themselves.
A question was, however, raised:
whether inputs can be taken as
development indicators. While enrolment
rate indicates an input, literacy rate
shows the output. While hospital
facilities indicate inputs, life expectancy
shows the output. If you have better
sanitation, you have better health and
you require less of hospital facilities.
Even income is in a way an input.
Researchers and policy-makers were
not very happy with such alternatives
to national income as welfare measures
as they did not find the approach suitable
to produce a meaningful social indicator.
Attempts were, then, made to develop
composite index of development,
purportedly based on aims and
objectives of development or outcomes
of the development process rather on the
means thereof.
Quality of Life Indices
We may recall the constituents of quality
of life in the previous chapter. They were
generally indicated as health, freedom,
education, environment, etc., the things
that you directly enjoy. Based on these
parameters, attempts have been made
in the recent past to construct indices,
which may, broadly, be called indices of
quality of life. In fact, longevity and
Foreign trade per capita, 1960 US $
Percentage of salaried and wage earners
to total economically active population
While at your level, it is not necessary
to go into the nitty-gritty of the ways the
indices were developed, an idea of the
variables that were included in such
attempts could be of some interest. The
variables included are per capita income,
literacy have undisputedly been accepted
as parameters of quality of life. We shall
be studying two popular indices, viz.,
Physical Quality of Life Index (PQLI) and
Human Development Index (HDI), which
have both used longevity and literacy as
basic constituents. There is, indeed, an
attempt to measure quality of life and we
will make reference to it towards the end.
It is important to remind at this stage
that these indices were developed in the
international context and were used for
ranking different countries according to
numerical value of achievement in
descending order. The indices are simple
arithmetic averages of normalised
aggregates for society/groups.
Physical Quality of Life Index
Towards the end of the seventies of the
past century, Morris David Morris
perused the variables adopted by several
UN Committees, the UNRISD, and the
OECD development economists. He
found that most of the indicators were
inputs to development process rather
than result of the development process.
These indicators reflected the belief that
there exists only one course of
development. It implied that
economically less developed countries
are simply underdeveloped versions of
industrialised countries. This view has
certain biases and value-bias of Europe.
It overlooks the diversity among the
underdeveloped countries and the
differences in social organisation in
different economies. Moreover, such
efforts seem to measure development as
an activity rather than as an end. He,
therefore, proposed a set of criteria for
developing a composite index of
development. He further proposed that
indicators chosen should reflect results
and social distribution of results and
should not reflect values of specific
(Euro-American) societies. Composite
index should be simple to construct and
easy to comprehend and should lead
itself to international comparison.
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AKHAND PRATAP SINGH
