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Q2 (CDS-I/2007) Economy › Basic Concepts & National Income › Economic growth indicators Answer Verified

Assertion (A) : Per capita income of India does not give a complete picture of the economic growth of the country. Reason (R) : Per capita income of a country is not independent of the size of its population.

Result
Your answer: —  Â·  Correct: A
Explanation

The correct answer is Option 1.

Assertion (A) is true because Per Capita Income (PCI) is an average value (Total National Income divided by Total Population). It fails to account for equitable income distribution, poverty levels, and quality of life indicators like health and education, thus providing an incomplete picture of real economic growth.

Reason (R) is true and provides the correct logical explanation for (A). PCI is mathematically derived from the size of the population. In a country like India, even significant growth in National Income can be offset by a large or rapidly growing population, resulting in a stagnant or low PCI. Since the denominator (population) directly dictates the result, PCI remains a limited arithmetic mean that masks structural inequalities and demographic pressures, reinforcing why it cannot be a holistic measure of growth on its own.

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SIMILAR QUESTIONS

IAS · 1996 · Q70 Relevance score: 5.22

Assertion (A) : Though India’s national income has gone up several fold since 1947, there has been no marked improvement in the per capita income level. Reason (R) : Sizeable proportion of the population of India is still living below the poverty line. In the context of the above two statements which one of the following is correct ?

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Assertion (A) : For the first time, India had no trade deficit in the year 2002- 2003. Reason (R) : For the first time, India’s exports crossed worth $ 50 billion in the year 2002-03.