Question

“Increase in per capita availability of goods and services necessarily means rise in welfare of the people of that country.” Do you agree with the given statement ? Give valid reason in support of your answer.

Hint:

Disagree. Per capita availability is only an average. It does not show whether the gains of higher GDP are shared fairly, so the rich-poor gap can widen and welfare can fall.

Answer 1

Step 1: State our stand:
No, we do not agree. A rise in per capita availability of goods and services does not necessarily mean a rise in the welfare of the people.
Per capita availability is an average figure. Welfare depends on how the goods are shared and on other things that an average does not show.

Step 2: Main reason: unequal distribution:
Per capita figure = total output divided by population. It tells us the average, not who gets the goods.
The gains of a rise in GDP may go to only a few hands. The rich can become richer while the poor get little or nothing.
Then the gap between the rich and the poor widens. A large part of the population does not gain, so the welfare of the country does not rise.

Step 3: Supporting reason: non-monetary activities:
Many useful activities, such as household work done by family members, are not counted in GDP because no payment is made.
So the output figure can leave out some sources of welfare.

Step 4: Supporting reason: externalities:
Production can cause pollution and damage to the environment. Such harm is not subtracted from GDP.
Output may rise while the quality of life falls, so the welfare of people may fall.

Step 5: Conclude:
More goods and services per person is only one part of welfare. Fair distribution and a clean environment matter equally.

Final Answer:
No. A rise in per capita availability of goods and services does not necessarily raise welfare, because the benefits may be concentrated among a few people and the gap between the rich and the poor may widen.