Social Welfare Functions in India

Social welfare functions play a crucial role in understanding how societies allocate resources and prioritize public goods. In the context of India, these functions have significant implications for policy-making and resource allocation.

What are Social Welfare Functions?

A social welfare function is a mathematical representation of society's preferences over alternative states of the economy. It assigns numerical values to different economic outcomes, with higher values indicating better welfare states.

In essence, it's a way to quantify what makes a society "better off."

Real-World Example: India's Economic Growth

India's rapid economic growth since liberalization in 1991 provides an excellent example of how social welfare functions work in practice.

Consider two possible scenarios:

1. Scenario A: High GDP growth rate (8%), but uneven distribution of wealth
2. Scenario B: Moderate GDP growth rate (6%), but more equitable distribution of income

Using a social welfare function, we can compare these scenarios:

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