Genuine Progress Indicator (GPI)-A Real Indicator of Economic Progress

Abstract

Increase in Gross Domestic Product, Gross National Product etc. which are so highly advertised and publicized by media and other governmental and non-governmental organizations do not necessarily reflect the ground reality and status of well-being and development of the economy of a nation. It is quite conservative in its approach and hence another economic indicator namely Genuine Progress Indicator was proposed by the economic think tank of America to lay down a more scientific and realistic way. In contrast to GDP, the Genuine Progress Indicator (GPI) lays great emphasis on long-term environmental problems and considers it as a cost that is subtracted from GDP to obtain GPI. Despite the warning by environmentalists that if the present state of fossil consumption, conversion of forest areas into habitats, the opening of poisonous chemical industries and establishment of new but very dangerous nuclear power reactors for energy production is continued, it is impossible for mankind or say whole living being to survive in near future. Humanity has already heavily suffered the tragedy of Union Carbide at Bhopal in India, the great Chornobyl tragedy of the USSR, the complete destruction of mankind at Hiroshima and Nagasaki and presently the Tsunami, earthquake, volcanic eruption and atomic reactor leakage, Covid-19 pandemic etc. which are just a few blatant blows to serve as eye openers for economists, technologists and scientists to understand and realize the seriousness and also repeated warnings by nature. Some developed countries have revised their economic analyses system by attaching significant importance to GPI instead of GDP. Environmental and social costs are considered in computation of GPI. Several studies have been done to measure GPI at the national level and sub-national levels. In this paper, attempts have been made to explain various outstanding characteristics of genuine progress indicator (GPI) and their relevance to socio-economic welfare in the present context. It is suggested that moral values, ethics and spirituality should be incorporated as a fourth factor in computation of GPI. This will certainly work as a tool to reduce socio-economic disparities and enhance overall wellbeing of society by adding spirituality and social ethics.