7.2. Other Arguments Against GDP as a Parameter to Judge Progress

♤ Gender disparities not indicated: For this a GII or Gender Inequality Index has been devised in recent years.

♤ Does not measure sustainability of growth: Growth in a country may be also at the cost of hefty exploitation of natural resources.

♤ Condition of poor is not indicated: As an example, even though Indian economy grew at a rate of over 7-8% in last decade the food inflation was at the highest levels adversely affecting the poorest strata of the society.

♤ Economic inequality not revealed by GDP: GDP does not reveal the economic inequality, which is created as a side effect of economic growth. Inequality in earnings has doubled in India over the last two decades which were incidentally the years of highest GDP growth also.

♤ Other intangibles not measured: Does not value intangibles like leisure, quality of life etc. since quality of life is measured by many other intangibles except the materialistic things provided by economic growth.

For the reasons mentioned above, several economists have tried to create replacements for GDP which try to address the above criticisms regarding GDP. Some of these indices include HDI, HPI (human poverty Index), GNH (Gross National Happiness Index), Green GDP etc.