In 2023, the United Nations (UN) Secretary General appointed an independent high-level expert group to “develop recommendations for a limited set of country-owned, universally applicable indicators of sustainable development that complement and go beyond gross domestic product (GDP).” The expert panel, co-chaired by Kaushik Basu and Nora Lustig, included eminent scholars from a variety of disciplines signalling the wide range of expertise that was called upon to subject the GDP measure to critical scrutiny and suggest the way forward. The report has just been published online.The fact that this enquiry was undertaken on the initiative of the UN Secretary General and relied on high-level expertise underlines its importance. The UN project builds on the work by Stiglitz, Sen, and Fitoussi in the wake of the global financial crisis (GFC), which questioned the use of conventional monetary indicators in assessing living standards. As we move towards the terminal year of the sustainable development goals (SDG) in 2030, the UN enquiry acquires importance with the GDP relied on to assess the progress on the 17 goals set out in 2015. As the UN report notes, and I add to it below, an increase in GDP can be associated with a decrease in living standards.The GDP concept owes its modern application to Simon Kuznets who introduced it in his report for the US Congress in 1934 in the context of national accounts. Defined as “the total monetary value of all finished goods and services produced,” the GDP has been widely used in cross-national comparisons as a measure of the size of a country’s economy and its growth rate. It has attracted considerable attention in India which ranks as the fourth largest economy on nominal GDP and third largest on purchasing power parity (PPP), though in per capita terms it falls well down the list. This is a significant milestone reflecting high market power on account of its 150 million plus middle-income population. Note, however, that India’s ranking is quite fragile since it is dependent on the exchange rate between the Indian rupee and the US dollar.GDP also serves an instrumental role in cross-country expenditure comparisons on various items such as spending on primary education and health expressed as a percentage of GDP. With increase in its usage, critics have expressed concern over the increasing reliance on GDP. The earliest critic was Kuznets himself who warned against using GDP in areas far removed from output and productivity calculations, for example, living standards.Let me give two examples where an increase in GDP can lead to decline in living standards. Throughout the previous and present centuries, there has been a sharp increase in military spending in advanced countries. Since this has promoted conflicts, no one will argue that the resulting increase in GDP has led to an increase in living standards. The second and more recent example is that of AI which most experts agree contributes positively to GDP. However, AI also displaces unskilled labour and increases inequality by shifting jobs from the unskilled to skilled labour force.The UN enquiry is significant in the context of its Sustainable Development agenda, which requires cross-national and intertemporal comparisons that are reliant on the use of GDP. The attractiveness of GDP as a summary measure lies in its ease of calculations, availability of data and software, and comparability across countries. However, as an indicator of a country’s living standards, the GDP measure needs to be supplemented by other indices.The motivation of this piece is to critically evaluate the report, point to certain aspects that have been underplayed in the Report, and mention some of the principal steps forward.Key features of the UN reportIt is a remarkable document that is comprehensive in its coverage of the relevant topics, has a lucid write up, and provides a clear forward roadmap through its recommendations. However, rather than a closure on the subject, it should be viewed as moving the discussion on GDP and related indicators beyond the Stiglitz-Sen-Fitoussi report mentioned earlier with which it has several commonalities and duplications.It is now nearly two decades since the GFC with several new developments that impact the GDP, such as globalisation, dismantling of trade barriers, greater flow of capital between countries, increasing inequality between and within countries and the advent of AI, which leave scope for fuller discussion than is done in the report.Also, as the report says, a decision was taken by the panel to focus on the output side and not on the inputs that lead to the GDP. This is unfortunate since by overlooking the distinction between the two components of GDP, namely, ‘goods’ and ‘services’ which require a different mix of technology, capital, skilled labour and unskilled labour, one loses the link of GDP with inequality, emissions and productivity.The report is preceded by sustained research over the past two decades based on the usefulness of the indicators in monitoring progress. The lessons from that experience informed the panel in writing up the UN report. It maintains continuity by linking the listed ‘domains of current wellbeing’ in box four with the 17 SDGs, underlining the fact that the UN report should be read in conjunction with the SDG rather than in isolation.It classifies the proposed Indicators under ‘tier one’ and ‘tier two’, subcategorised under ‘foundational principles’, ‘current wellbeing’, ‘equality and inclusion’, ‘sustainability and resilience’, noting the ‘domain’ it falls under, and lists the data source indicating where improvements are required. It distinguishes between tier one and tier two by noting that while the former “have internationally established methodologies and standards, and are supported by data,” the latter are not yet regularly produced by countries.Where applicable, the data source refers to the SDGs that feature the indicator. Underlining the importance of data for what it calls the ‘global agenda’, it devotes a significant part of chapter five to ‘statistical and data agenda’ for ‘global adoption’. The concluding chapter six contains a set of recommendations directed at the principal stakeholders, namely, ‘governments’, ‘UN and other international organisations’, ‘international statistical community’, ‘civil society, academia, the private sector and the media’.Critical evaluation of the reportA criticism of the GDP stems from its original definition that conflates two different items, ‘goods’ and ‘services’, in its measure. While the former is more dependent on capital, technology, and skilled labour in the formal sector, the latter is more dependent on low wage-earning unskilled labour in the informal sector, especially in developing countries.This has implications for productivity since the former is appropriated by the capital-owning entrepreneurs, and the latter by wage labour. In focussing only on the output side, the UN report overlooks the link between GDP and inequality. This is exacerbated by the increasing role of AI in the production process.The UN report could have increased its contemporary relevance by providing more extensive discussion of the role of AI in distorting the uncorrected GDP. The same applies to greenhouse gas emissions. In ongoing work with my Kolkata-based co-authors we have provided evidence of significant upward bias in ignoring inequality and environmental pollution in calculating GDP.We find that the incorporation of inequality leads to a sharp reduction in GDP for middle-income countries such as India.Another significant omission is the role of the informal sector with its much larger share of output and employment in the developing countries than in the advanced ones. Unless the statistical agencies improve the data collection on the informal sector, the GDP estimates will be severely distorted for developing countries. While the report signals the importance of data in chapter five, it needed to discuss the importance of coordinating with autonomous UN agencies such as the International Labour Organisation (ILO) and World Health Organisation (WHO) that provide data on household work and health, respectively, to make the GDP better reflect living standards.The report lacks methodological detail on how these can be incorporated in the GDP measure. There needs to be better coordination between the individual countries’ statistical agencies, as previously noted by the Global Poverty Commission set up by the World Bank. This can only be done by a global agency such as the UN Statistical Commission. The cross-country nature of the report is both a strength and weakness.While it increases the global interest in its contents, by treating all countries large and small uniformly, it ignores the heterogeneous nature of a large country that requires special effort at measuring spatial prices. In such contexts, a country-wide GDP may be less meaningful than subnational GDPs paralleling the recent interest in subnational PPPs.Adding to this is the ‘elephant curve’ due to economists Branko Milanovic and Christoph Lakner who found that the percentage of real income growth across all global income percentiles between 1988 and 2008 plotted against income classes, mimics the profile of an elephant with an elongated trunk.The top income classes are situated on the trunk and appropriate much of the GDP growth while the middle-income groups are on the back of the elephant and record a flat trajectory. This calls for percentile-wise GDPs supplementing a single, country-wide GDP.Moving forwardThe UN report on ‘Beyond GDP’ provides a useful document that – in conjunction with the SDG – provides a forward roadmap. Special attention needs to be paid to technological developments such as AI that improve productivity and GDP at the expense of low-skilled labour.Also, there needs to be benchmarking of multidimensional measures such as Human Development Index (HDI) and multidimensional poverty against the unidimensional GDP.Let us identify and spell out a few areas that can provide a basis for moving ‘Beyond GDP’, the title of the UN report.With Artificial Intelligence (AI) playing an increasingly important role in the GDP growth process, special attention needs to be paid to developing measures that show the penetration of AI in a country’s economy and the presence of a skilled workforce to take advantage of AI. Filippucci et al. (2024) have recently called for “for a comprehensive policy approach to ensure AI’s beneficial development and diffusion, including measures to promote competition, enhance accessibility, and address job displacement and inequality”. The reporting of GDP should be supplemented by such measures that are forward-looking and show the potential for future GDP growth.Greater attention needs to be paid to how inequality is incorporated in the measure of GDP. Sen (1976) provides one such approach based on Gini inequality, reflecting the view that inequality drags down living standards. One needs to develop the limited literature and provide an agenda for methodological development on embodying the inequality measure in GDP measurement. While the evidence on the role of the Informal sector in the GDP is mixed, it is important to improve the data collection on the Informal sector and develop a methodology for incorporating the size of this sector in the GDP estimation.Since productivity underpins the GDP, a global project on productivity distinguishing between labour and capital productivity and between the formal and informal sectors is called for.CO2 emissions have a detrimental impact on living standards. Majumder, Ray, and Santra (2026) propose a methodology for modifying the GDP to incorporate pollution. Further work is called for as environmental degradation accompanying GDP growth occupies an increasingly important role in policy discussions.In the absence of reliable data on household work and child labour, official figures underplay their role in promoting production and underestimate GDP. Since the ILO is the purveyor of such data, there needs to be closer coordination between such global agencies and the individual countries’ statistical agencies that produce the GDP estimates.In large heterogenous countries such as India and Indonesia, one requires spatial prices for comparison of regional GDPs within the country. Such information is generally missing and requires special initiative with the help of the World Bank’s International Comparison Project (ICP) to provide spatial prices using a consistent methodology across countries. The most important takeaway from the UN report is the warning of the danger of exclusive reliance on GDP alone and the need to develop supplementary measures for assessing living standards in a country.Ranjan Ray is a retired Professor of Economics at Monash University in Melbourne, Australia. He held the position of Professor of Public Economics at the Delhi School of Economics, India from 1989-1995. This article was originally published on Ideas for India.