GDP vs Happiness: Why India Ranks Below Nepal and Bhutan Despite Economic Growth

GDP vs Happiness: India, the world’s fifth-largest economy by GDP, faces a paradox: it ranks 118th in the 2025 World Happiness Report, trailing smaller neighbors Nepal and Bhutan. This disparity raises critical questions about GDP as a flawed indicator of well-being and underscores the need for holistic metrics like Bhutan’s Gross National Happiness (GNH) or the Human Development Index (HDI).

Ques- Despite being a larger economy, India ranks below Nepal and Bhutan in happiness. Is GDP a flawed indicator of well-being? Discuss. 15M-250 Words

Brief outline to this answer-

Introduction. Highlight India’s GDP rank (5th) vs. happiness rank (118th). Pose the central question: Is GDP a flawed measure of well-being?

Body of Answer
Limitations of GDP as a Well-Being Indicator- inequality, environment costs, social indicators.
Brief Case Study: India vs. Nepal & Bhutan
Alternative Metrics for Well-Being- GDP, GNH, World Happiness Report.
Reasons for India’s Low Happiness Ranking-
Policy Recommendations

Conclusion- GDP is inadequate for assessing well-being. Highlight Nepal/Bhutan’s focus on equity, ecology, and community

Understanding GDP as an Indicator

• GDP measures a nation’s economic output (goods/services produced annually).
• Traditionally used to gauge economic growth and development.

Limitations of GDP vs Happiness: A Narrow View of Progress

• Excludes Non-Market Activities: Unpaid labor (e.g., caregiving) and informal sectors are ignored.
• Ignores Inequality: India’s GDP growth coexists with high income inequality (Gini coefficient: 82.3 in wealth distribution).
• Environmental Costs: Delhi’s air pollution (AQI > 400) reduces life quality but boosts GDP via healthcare spending—a phenomenon termed “ill-being embedded in growth”.
• Quality of Life: Fails to capture health, education, or social cohesion.

Why Nepal and Bhutan Outperform India in Happiness

India’s Economic Status:

• GDP: $3.7 trillion (2023), yet 11% live in extreme poverty.
• High unemployment (7.6% in 2023) and urban-rural disparities.

Happiness Drivers in Nepal & Bhutan:

• Bhutan’s Gross National Happiness (GNH): Prioritizes mental well-being, cultural preservation (e.g., mandatory forest cover ≥60%), and equitable development.
• Nepal’s Community Resilience: Strong social bonds post-2015 earthquake; focus on communal harmony despite low GDP.

Alternative Measures of Well-being

• Gross National Happiness (GNH): Bhutan’s holistic framework balances economic growth with spiritual and environmental health.
• Human Development Index (HDI): Combines income, education, and life expectancy. India ranks 132/191 (2022), below Sri Lanka (73rd).
• World Happiness Report Indicators: Social support, freedom, generosity, and corruption levels. Nepal outperforms India in social support metrics.

India’s Happiness Gap: Key Factors

• Income Inequality: Top 10% hold 77% of national wealth (Oxfam, 2023).
• Weak Social Infrastructure:
  • Healthcare: Only 1.3% of GDP spent on public health (vs. Bhutan’s 3.5%).
  • Education: 22% rural youth illiteracy (NSSO).
• Environmental Stress: 63 Indian cities among the world’s 100 most polluted.
• Cultural Erosion: Urbanization disrupts community ties, unlike Bhutan’s cultural preservation.

Policy Solutions: Beyond GDP

• Adopt Holistic Metrics: Use SDGs, HDI, or NITI Aayog’s Multidimensional Poverty Index.
• Invest in Social Capital:
  • Kerala Model: High HDI via public health/education despite moderate GDP.
  • Expand schemes like Ayushman Bharat (health) and NREGA (livelihoods).
• Environmental Sustainability: Replicate Bhutan’s carbon-neutral policies.

Conclusion

GDP’s narrow focus on economic output renders it inadequate for assessing holistic well-being. India must prioritize equitable growth, environmental stewardship, and social infrastructure to bridge the happiness gap. As Bhutan and Nepal demonstrate, “development” must harmonize material progress with human and ecological welfare

To understand the concept of Gross National Happiness you can read this article- GROSS NATIONAL HAPPINESS.

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