Usually, we take one or more important characteristics of persons and compare them based on these characteristics.
For comparing countries, their income is considered to be one of the most important attributes.
Countries with higher income are more developed than others with less income.
Total income of a country is the sum of income of all the residents of the country.
For comparison between countries, total income is not such a useful measure because different countries have different population.
Hence, we compare the average income which is the total income of the country divided by its total population. The average income is also called per capita income.
As per World Development Report 2006: Countries with per capita income of Rs 4,53,000 per annum and above in 2004, are called rich countries and those with per capita income of Rs 37,000 or less are called low-income countries.
India comes in the category of low-income countries because its per capita income in 2004 was just Rs 28,000 per annum.
