Title: How much progress has been recently made in India? Finding out with the use of a Genuine Progress Indicator

Authors: Philip Lawn

Addresses: Flinders Business School, Flinders University GPO Box 2100, Adelaide, SA 5001, Australia

Abstract: Gross Domestic Product (GDP) is an economic indicator that fails to fully account for the major benefits and costs of economic activity. As a consequence, it is an inadequate indicator of sustainable economic welfare. To overcome the deficiencies of GDP, a Genuine Progress Indicator (GPI) was devised in the 1990s. The GPI has since undergone significant modification and improvement. Calculation of the GPI for India for the period 1987-2003 reveals two important pieces of information. Firstly, the per capita GPI remained consistently lower than per capita GDP over the entire study period. Secondly, the rate of India|s genuine progress between 1987 and 2003 was less spectacular than that indicated by India|s per capita GDP. To facilitate a greater rate of genuine progress over the coming decades, India needs a new phase of GDP growth based on distributional equity, production excellence, increased resource use efficiency, and minimal natural capital depletion. Eventually, however, India will need to make the transition to a steady-state economy — something which ought not to preclude further progress — or face the prospect of having to endure a declining per capita GPI caused largely by an economy growing beyond its maximum sustainable scale.

Keywords: sustainable economic welfare; GPI; genuine progress indicator; India; economic growth; economic development; gross domestic product; GDP; distribution equity; production excellence; resource use efficiency; natural capital depletion; sustainable development; sustainability.

DOI: 10.1504/IJESD.2008.021902

International Journal of Environment and Sustainable Development, 2008 Vol.7 No.3, pp.311 - 331

Available online: 09 Dec 2008 *

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