increase in total income of country may or may not lead to the welfare of the masses explain

Pranay, an increase in total income can be due to increase in income of few individuals or due to increase in income in general. The former lead to increase in welfare of only those few individuals, whereas, the latter has a widespread impact, since all the people will have more income. Besides this, a much depends on the welfare programs and taxation policies of the government of a country. If government can implement effective taxation policy, wherein, the increased incomes of few individuals are tapped efficiently and utilised in mass-welfare programs, then the welfare level of the general people will raise. On the contrast, if the government fails to do so, then the same will have a lope-side effect in favour of the rich at the cost of the poor.

Hence, it can be concluded that an increase in total income of a country may or may not lead to overall welfare of an economy.