Development of a country can generally be determined by a) its per capita income b) its average literacy level c) health status of its people d) all the above

Answer: The correct answer is Option (a) – Per capita Income

  • One of the most important attributes for comparing different countries is their income.
  • Countries with less income are considered to be less developed than nations with higher incomes.
  • Human beings can have more of all the things that they need, if they have more income. This is the underlying reason for comparing incomes of countries to measure development.
  • With greater income, people will have more purchasing power and can have whatever people should have and whatever people want to have.
  • Hence one of the most important goals is higher income.
  • The income of all the residents of the country is the total income of the country.
  • Total income is not a useful measure for comparison between countries.
  • Comparing total income will not help in estimating what an average person is likely to earn, since countries have different populations.
  • Average income is the total income of the country divided by its total population. Hence, the right measure used in comparing different nations is comparison of average incomes of nations. 
  • Per capita income is nothing but the average income.
  • The criterion used in classifying countries is the per capita income of a nation. This criterion is used by the World Bank in its World Development Reports.
  • Countries with per capita income of US$ 1035 or less are called low-income countries.
  • As per 2012, rich countries are the countries with per capita income of US$ 12616 per annum and above.
  • In 2012 per capita income of India was just US$ 1530 per annum, hence it was classified in the category of low middle income countries.
  • Generally developed countries are the rich countries, excluding some small countries and countries of the Middle East. 

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