Hotmail co-founder Sabeer Bhatia questions India’s GDP India’s method of calculating its Gross Domestic Product (GDP) came under attack in a podcast recently by Hotmail co-founder Sabeer Bhatia, who argued that the current approach overstates economic activity because it assigns value to financial dealings relative to genuine productivity.
Bhatia stressed that India would have to reform its system for monitoring economic growth if it were to keep up with China’s level. Quoted in The Economic Times, he insisted that it should be such that it rewards effort as much as product, as opposed to just the movement of money.
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Critically evaluating the present methodology, Bhatia clarified that merely swapping money for additional GST is inaccurately depicted as GDP growth, even without any work actually being done in the process. “Giving money is not work,” he clarified. “Real GDP should represent actual work and productivity.”
He made a comparison with the American system, where GDP is related to working hours and value generated. He further mentioned that in such systems, individuals report their working hours to the state, and the taxes are paid based on it—depicting the true picture of the performance of the economy.
