This paper assesses the extent to which the conceptualization of gender inequality based on the capability perspective describes equality and development better than the conventional conceptualization. Unlike, the conventional gender inequality indices which fundamentally concentrate on single dimensions or factors that are extrinsic to women, the capability approach bases its ground on the inclusion of various dimension to capture the nature of inequality and development. Using a revised gender inequality index based on the capability approach and random effects panel regression, this study examine how the revised gender inequality index across 114 countries related with the various dimension of development and test its validity to conceptualize development as alternative indicator. The result indicated that the revised gender inequality index can adequately affect poverty head count ratio, child health and multi-dimensional poverty. The findings reveal the validity of the revised index and the importance of conceptualizing equality from multidimensional perspective to policy design.