Per capita income or average income as an important criterion for development is considered to be one of the most important attributes for comparing countries but it has the following limitations.
(a) It does not tell us anything about the distribution of income. A poor country with a more equal distribution of income would be better than a richer country with an unequal distribution of income.
(b) It does not measure various facilities and services that influence quality of life such as health facilities, education facilities and equal treatment.
(c) It is affected by the size of population. Even with a large national income, per capita income will be low if a country has large population.
