Gross National Happiness Index: Here’s how to focus on the right issues

By: and |
Published: August 6, 2016 6:14:55 AM

Gross National Happiness index supplements the concept of GDP with a more holistic measure of development

Gross National Happiness index supplements the concept of GDP with a more holistic measure of developmentGross National Happiness index supplements the concept of GDP with a more holistic measure of development

Inspired by the example of Bhutan, Shivraj Singh Chouhan is the first Indian chief minister to set up Ananda Vibhaga, a full-fledged ministry of happiness under his watch in Madhya Pradesh. He says this is to promote value based development and spread spiritual progress and happiness. Madhya Pradesh is an agrarian state afflicted by poverty, hunger, disease, malnutrition and high incidence of infantile and maternal mortality rates. In such circumstances, point out critics, setting up a ministry of happiness can only be a joke, a ploy to divert attention from the Vyapam and other corruption scandals.

The idea however is not all that outlandish: the concept of gross national happiness (GNH) or well-being, first mooted by the King of Bhutan in the early seventies, has slowly evolved into a serious socio-economic model for holistic development. In 2011, the UN General Assembly passed a resolution, placing it on the global development agenda. Since then four World Happiness Reports have been published.

GNH supplements the concept of gross domestic product (GDP) with a more holistic measure of development. GDP can be seen roughly as the sum total of goods and services; or incomes; or expenditures and savings during a period, say, a year. As all economists will vouch, it is defective both as an estimate of the level of economic activity as well an indicator of development. It fails, for example, to compute the contributions of homemakers, who comprise nearly half the adult population of a country. It attributes value to activities destructive of national wealth, such as felling of trees and ravaging of the environment. Further, the final figures of growth in income in different sectors of the economy, may not always square up with ground realities, as evidenced by even our economy’s current rate of industrial GDP growth. Most important, GDP alone does not measure what citizens want. A country may achieve a high rate of growth in GDP but this may be accompanied by joblessness; increased inequalities in income between classes; social unrest; and a general lack of well- being.

To get over these difficulties GNH adds five more dimensions to GDP per capita. The additional dimensions scored are: healthy years of life expectancy, social support in times of need; trust in society measured as absence of corruption, freedom of people to take their own decisions; and believe it or not, level of generosity in society. These six variables explain about three quarters of the global variation in GNH. Improvements in per capita GDP; healthy life expectancy, and social support are the three critical dimensions.

Data to calculate GNH includes asking respondents to measure their perceived quality of life on a scale of 0 to 10, with 0 representing the worst and 10 the best possible outcome. The latest report written by three eminent international experts, Jeffrey Sachs, Richard Layard and John Helliwell, was published in March 2016.

In addition to measuring the level and change in happiness in each country, the report also measures inequality of happiness within each country. From an Indian perspective, the results are a matter of serious concern. We currently stand in the bottom quartile-a lowly 118 out of 157 countries in terms of GNH. This ranking was accompanied by a significant deterioration in the score between 2005-7 and 2013-15, amongst the sharpest declines in the world.

We fall in the second quartile in the inequality of income index-by no means the worst; in the index that measures inequality of happiness, however, our rank falls in the third quartile, at 90 out of 157 countries. In short we suffer much more from inequality of happiness than inequality of income.

Jeffrey Sachs also suggests that international indices for human development, sustainable growth and happiness are directly correlated. Thus India’s ranking on happiness-118 out of 157 is comparable to 130 of 188 on the human development scorecard and 110 out of 149 on the sustainable development scorecard.

The three scorecards though are not identical but comparable. The happiness index, because it focuses on the ultimate goal-the well-being of people-appears to be superior to the other two. Happiness in society needs many aspects to come together positively. Per capita GDP, level of unemployment, working conditions, health, education, pollution and values all play a role, as do good governance, cultivation of mindfulness, strong social ties and personal freedom. To reduce these variables into a single index and then rank each country is a difficult task. The world happiness index, not surprisingly, still a work in progress, is the nearest we have come to doing this.

From the beginning of time, happiness has been the summum bonum of life, the goal we all strive for. Aristotle and Plato felt that that it lay in leading the good life. Bentham emphasised the greatest good of the greatest number; Karl Marx, an egalitarian society; John Stuart Mill, freedom defined as absence of restraint. The list of philosophers and theories is endless; but so far our explanations of happiness have largely been theory driven. Now for the first time it is possible for us to test theory against empirical evidence gathered through scientifically conducted surveys. Some results fly in the face of received wisdom. We were taught to think that pursuit of happiness is essentially a personal, almost selfish, pursuit where each person must fight her own personal battle. The World Happiness Report 2016 however cites empirical evidence to show that human beings are simultaneously both selfish and altruistic. In the latter aspect of our inherent make-up, we are happy to give for the well- being of other less fortunate people. This, in a way, establishes the generosity dimension of the GNH.

Because the word happiness is so subjective and value loaded, an index that seeks to measure it is often regarded with scepticism. It does however provide explanations for certain events which are otherwise not easily explainable: the GNH index declined between 2005- 07 to 2013-15 in the UK, the US, India and Pakistan. Could this decline in happiness explain the shock of Brexit, the rise of Donald Trump, the increase of terrorism in Pakistan and the drubbing the Congress received at the polls in India? China’s position, on the other hand, has improved. Was this the result of increase in GDP per capita? One wonders.

The index definitely gives us some food for thought. Shivraj Singh Chouhan may thus have stolen a march on the centre and other states in recognising the value of this index for focusing on the right issues.

Singh was formerly chief commissioner of Income-tax and ombudsman to the Income-tax department, Mumbai and Khanna was formerly senior partner AF Ferguson, chartered accountants

Views are personal

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