Income growth clearly strikes one as the main contributor to directly increasing
the capabilities of individuals and consequently the human development of a nation since
it encapsulates the economy’s command over resources (Sen, 2000). For example, while
the citizens of the Indian state of Kerala have life expectancies and literacy rates
comparable to those of many developed countries, the fact that they cannot enjoy many
of the benefits of citizens of such countries (such as better housing, transportation, or
entertainment) demonstrates the importance of GDP as an instrument for achieving a
wide range of capabilities. However, GDP also has a strong effect on literacy and health
outcomes, both through private expenditures and government programs. Thus, insofar as
higher incomes facilitate the achievement of other crucial human development objectives,
it also has an indirect effect on human development.