Question

Per capita income is not the real indicator of regional development. Explain.

Answer 1

The per capita income is the income per person in the country or region. It is the ratio between the country's national income and total population. Per capita income is an index of development because of more the per capita income, the higher the standard of living of people. But it is not always true.

The per capita income gives an idea about the average income of people in the country but does not explain how income is distributed among the people. Some people may be rich, and some may be below the poverty line. The per capita income is related only to the economic aspect of the country. Still, it does not take into account literacy rate, health, sex ratio, age structure, life expectancy etc. Sometimes rise in per capita income is due to an increase in prices of commodities. If the population is low, the per capita income will be high. Still, regional development will be slow because such regions have a shortage of skilled labour supply for further development. Therefore, we can say that the per capita income does not accurately indicate regional development.