GDP (Gross Domestic Product) along with GDH (Gross Domestic Happiness) would be the right indices for judging the wellbeing of a country

Counting What Counts

In 1934 the economist Simon Kuznets handed the United States Congress the first modern estimate of national income, and in the same report he added a warning: the welfare of a nation can scarcely be inferred from a measurement of its national income. Nearly four decades later, the young King of Bhutan, Jigme Singye Wangchuck, turned that warning into a doctrine, declaring that Gross National Happiness mattered more than Gross National Product. The two men stood at opposite ends of the world, yet they saw the same gap: a number can tell us how much a country produces, but not how its people live. Gross Domestic Product, read together with Gross Domestic Happiness, is indeed the right pair of indices for judging a country's wellbeing, because one measures the means of a good life and the other its ends, but the pair works only if happiness is measured objectively and both are anchored in equity and sustainability.

To begin with, it helps to be clear about what each index measures. GDP is the market value of all final goods and services produced within a country in a year. It is precise, comparable across countries and indispensable for running an economy: budgets, tax revenue and borrowing limits all hang on it. Gross Domestic Happiness, modelled on Bhutan's Gross National Happiness, asks a different question: are people healthy, secure, educated, connected and satisfied with their lives? Bhutan's GNH Index, built by the Centre for Bhutan Studies, rests on four pillars (good governance, sustainable development, cultural preservation and environmental conservation) and nine domains, from psychological wellbeing to time use and community vitality. GDP counts what we have; happiness asks what that having does for us.

The case for keeping GDP at the centre remains strong, especially for a developing country. Growth pays for schools, hospitals and pensions, and no country has abolished mass poverty without sustained growth. India's own story proves this. NITI Aayog estimated in 2024 that about 25 crore people moved out of multidimensional poverty between 2013-14 and 2022-23, a decade of steady growth that financed housing, toilets, cooking gas and bank accounts. MoSPI's new series, with 2022-23 as base year, estimates real GDP growth at 7.6 per cent in 2025-26. For a nation whose median citizen is young and whose per capita income is still modest, dismissing GDP as crude materialism would be a luxury that only the rich can afford. Growth also creates jobs, and work is itself a source of dignity and self-respect: few things erode happiness faster than prolonged unemployment, as wellbeing surveys consistently show.

Yet GDP alone misleads, as Kuznets himself foresaw. In 1968 Robert F. Kennedy observed that the national product counts air pollution, cigarette advertising and locks for our doors, but not the health of children or the quality of their education; it measures everything, he said, except that which makes life worthwhile. A forest felled adds to GDP, while a forest standing adds nothing. Unpaid care work, overwhelmingly done by women, is invisible to it. GDP is also silent on distribution: an average can rise while most people stagnate. The Easterlin paradox, first described in 1974, found that beyond a point rising incomes did not make societies proportionately happier. A country can thus grow richer while its people grow more anxious, lonely and unequal.

Moreover, the world has slowly moved towards the pairing the question proposes. The UN Development Programme's Human Development Index, launched in 1990 by Mahbub ul Haq with Amartya Sen's capability approach behind it, added health and education to income. In 2009 the Stiglitz-Sen-Fitoussi Commission urged governments to shift from measuring production to measuring wellbeing. In 2011 the UN General Assembly adopted resolution 65/309, inviting countries to pursue happiness as a holistic approach to development, and the World Happiness Report has appeared almost every year since 2012. New Zealand presented a Wellbeing Budget in 2019, and Bhutan wrote the pursuit of GNH into Article 9 of its 2008 Constitution. India, too, has experimented: Madhya Pradesh set up a Department of Happiness in 2016, and Delhi's government schools introduced a Happiness Curriculum in 2018.

The idea is hardly foreign to Indian thought. Kautilya's Arthashastra holds that in the happiness of the subjects lies the happiness of the king, and in their welfare his welfare. Gandhi's talisman asked every decision-maker to recall the face of the poorest person and ask whether the step contemplated would be of any use to him. The Directive Principles, especially Article 38, direct the State to secure a social order in which justice, social, economic and political, shall inform all institutions of national life. Our Constitution, in other words, already measures success by wellbeing, not by output alone.

However, happiness as an index carries real dangers, and an honest essay must face them. Happiness is subjective and culturally coloured: a survey answer may reflect expectations more than conditions. Amartya Sen warned of adaptive preferences, the way deprived people learn to be content with little, so that a happy poor village may simply be a resigned one. A government could also misuse a happiness index to declare success while neglecting jobs or rights. Bhutan itself shows the limits: despite its GNH framework, it has struggled with youth unemployment and a steady emigration of its young people in search of work abroad. Happiness that rests on a stagnant economy does not stay happy for long. This is why the question is right to pair the two indices rather than replace one with the other.

The real task, then, is to make the pairing rigorous. The happiness measure should lean on objective components, such as health, learning, security, time use and trust in institutions, rather than on mood alone, much as the GNH Index does. GDP should be adjusted for the depletion of natural capital, so that India's commitment to net zero by 2070 shows up in its accounts. Distribution must be tracked beside averages through tools like the Multidimensional Poverty Index. Finally, these measures must reach budgets and district dashboards, as the Aspirational Districts Programme tried from 2018 by ranking districts on health, education and nutrition outcomes rather than on spending.

A wellbeing dashboard of this kind would also change behaviour. Ministries judged only by growth will chase output; ministries judged also by health, trust and clean air will design differently. A highway would then be weighed against the village it splits, and a factory against the river it touches. A district collector reviewed on maternal health, learning levels and air quality would spend her time differently from one reviewed only on spending targets. Better measurement does not make a nation good, but it makes neglect harder to hide.

"Not everything that can be counted counts, and not everything that counts can be counted." (William Bruce Cameron, 1963)

Kuznets and the Bhutanese King, then, were not rivals but partners in one argument. GDP tells a nation whether it has the means to live well; happiness tells it whether it is actually living well. Either alone is a half-truth: growth without wellbeing is hollow, and contentment without growth is fragile. Judged together, and kept honest by equity and sustainability, the two indices can guide India towards a Viksit Bharat that is not only richer but also healthier, fairer and genuinely happier.