Gross National Happiness (GNH) � introduced as a new measurement of national prosperity, focusing on people�s well-being rather than economic productivity. This paper talks about how Buddhism is associated with happiness (psychological well-being). The Buddhist understanding of happiness is much broader. It is a holistic reflection of the general well-being. Happiness and prosperity does not come through accumulation of wealth rather happiness comes from mental well-being (i.e. psychological well-being).