DEVELOPMENT
DEVELOPMENT
DEVELOPMENT
IMPORTANCE OF AVERAGES
Since countries have different populations comparing total income does not tell us
what an average person is likely to earn, hence we compare the average income
which is the total income of the country divided by its total population. It is also called
per capita income.
Criterion used by the World Bank as per World Development Report 2006, in
classifying the countries.
World Bank says that countries with the per capita income of Rs 4,53,000 per annum
and above in 2004 are called rich countries and those with the per capita income of
Rs 37,000 or less are called low-income countries.
India comes in the category of low income countries because its per capita income in
2004 was just Rs 28000 per annum. Rich countries excluding the countries of Middle-
East and certain other small countries are generally called developed countries.
KEY TERMS