World Bank uses the per capita income of the country as the principal criterion for classifying the countries as rich or poor. Per capita income is the average income of the people of a country in a given year. This criterion of classification has number of limitations. They are
(i)World Bank does not give equal importance to other factors such as literacy rates and general health standards of the people which plays an important role in defining the quality of life.
(ii)The per capita income does not reflect information about the unequal distribution of income among the people.
(iii)Classification by income does not necessarily display the development status because economics in one group do not experience similar level of development.

When we look at the figures related to Human Development Index, India lags behind on several parameters. Although the life expectancy, infant mortality, and literacy rate have shown improvement in 2011 census, much more needs to be done. Given the vast population of India, the absolute number of infants how die before completing one year is very high. This can be attributed to lack of proper health care, drinking water, sanitation and nutrition; especially in rural areas. India needs to develop facilities to improve on these parameters to become a developed country.

Sri Lanka: $4390, India:$3139, Pakistan:$2225

Increase in average income cannot be a guarantee of overall progress of the economy. As the data of Punjab and Kerala; in this chapter; show, there are other factors which also need to be analysed before arriving at a conclusion. Some of those factors are; infant morality rate, literacy rate, etc.

Height of students in a class with a large number of students, income of people of a state, forest cover in a country, etc. are some examples where averages are used for comparing situations.