Beyond GDP – Measuring Gross Domestic Happiness..!!

The years begin with wishes for a Happy New Year but turn out to be just another year for most of the population. Indeed, the efforts of us as individuals, as society or as a nation are not even aligned towards making it so. The guiding principle remains the GDP growth which is expected to percolate and provide masses the basic needs. However, it is not so simple. The World Happiness Report for 2019 shows that despite all the progress achieved, India has slipped significantly in the happiness index between 2005-08 and 2016-18. This means even if the nation reaches the milestone of $5 trillion, it doesn’t guarantee things such as opportunity for livelihood, not just access to health, education but quality of delivery of these services, clean environment, the essence of happiness. So, where is the gap and is there a way to re-orient ourselves. Here is a look at the report and some solutions.

The World Happiness Report, supported by UN, lists out countries on the basis of survey using three measures – life evaluation score, frequency of positive emotions such as laughter, enjoyment etc and frequency of negative emotions such as worry, sadness, anger. The survey further includes measures such as social support, freedom, corruption, generosity, GDP per capita and healthy life expectancy. As per the report, Finland tops the chart with a score of 7.77 (maximum – 10), followed by Denmark at 7.6. The two countries were at the top in the first report of 2012 also, although the places have changed now. India is placed at depressingly No 140, even lower than countries like Uganda, Ethiopia and Zambia. Worse, it is the fourth worst countries in terms of decline in the happiness score between the period 2005-08 and 2016-18.

While Europe has broadly been within a band, USA has seen its happiness score decline during the period. Sub-Saharan Africa, despite all the poverty it faces, has seen its score improve over the years. On global basis, happiness has been declining after improving till 2011. More worryingly, while positive effect is largely constant during the period, negative effect has risen from a low of 0.22 to over 0.28 in 2018. Further, the five most populous countries, including India, contribute the most to the decline. Excluding them, there is an increase in happiness level. An important mentioned in the report is that life evaluation gains for top ten gainers are more than what would be achieved from a ten-fold increase in GDP. Even if the calculations to arrive at this could be subject to scrutiny, the figure does give reason to look at the current model of GDP driven growth more critically.

So, what could the governments do to improve the happiness of its people. The report notes that despite the achievements of the administration in traditionally relevant fields such as economic activity, the public seemed to feel angry with political leaders who were perceived as being unable to solve growing inequalities, corruption, violence and insecurity. For instance, despite all the economic progress in India since liberalization, income share of top 1% of the population has risen from just about 10% in 1991 to over 20% now. (This is share of income, not wealth which would be even worse). This means income growth of top 1% was more than double the average growth during the period against 0.88 times for the rest of the population. (For bottom 20%, the gains would be much lower). Mr Narayana Murthy’s thoughts around “compassionate capitalism” and capping CEO’s salary at 20-25 times the salary at the lowest level to achieve a “just and happy society” is an important case in point. Any move by the government to link CEO’s salary in this manner may cause a short-term blip but would certainly lead to more equitable society. The report also mentions four deliverables for the governments to improve happiness – rule of law, quality of regulations, control of corruption and effectiveness of governance.

Another worrying trend is the shift in how we spend our leisure time which is affecting the level of happiness. As per a survey carried out across teens in USA cited in the report, z score of time spent on internet has moved from -1.0 to 1.6 between 2006-17 even as the happiness score has come down from 1.3 to -1.5, indicating significant negative correlation. While the government may not be able to do much about this, the society certainly needs to wake up to this demon.

Hope we work towards making it “A Happy New Year”!!

Image courtesy of photostock at

Leave a Reply

Your email address will not be published. Required fields are marked *