Threat of GDP

1.22 trillion USD at current prices-2008

Bikash Choudhury


All economist, politicians and corporate chieftains wish economy i.e., GDP to grow by 9% and only they understand how dear this figure to their lives. Economist more work, politicians more votes and corporate chieftains more profits. These mortal would hardly constitute a 0.5% of billion population of this country. How about balance 99.5% populi?
They hardly get time, from their daily grind to think about GDP and its promise for their and family future. Recently, a cross section of global intellectuals have conceded that GDP does not accurately reflect the State of the Economy, worse still the people at the bottom of pyramid. In my understanding GDP only says, how many middle class people got; how much richer and hides the fact, how many poor people went belly-up and how many poor people live worse than animal existence. Therefore, we in India must revisit GDP with the data on average disparity between regions in the country and again between regions of a State. Further, we must take into account the disparity in income & expenditure-highs & lows, and then publish actual Gross Happiness or Despair for the reference of Policy makers. Having said that, we still welcome an above nine percent GDP to keep the system moving forward.
In current market driven economy and TV, Mobile and Bollywood controlled culture Urban and Rural divide would continue to grow to the disadvantage of rural poor unless and until negative transfer of resources is checked between rural & urban economy. Rural economies continue to sell stuffs at less and buy stuffs from urban economy at high. What is the way forward?Rural economy need to increase the value addition in all agriculture & other farm produce both in quantity and quality by 10-20 % each year.
Infrastructure for productive capacity creation in rural areas would need at least average level of logistic.That is net work roads and appropriate and cost effective transportation facility backed by a suitable Eco-system of transport industry, Networked Warehousing system connected to urban/metro markets.
Businessmen, Entrepreneurs of urban area can invest in creating production facility for value addition in rural areas and can save in labor cost and gain fiscal benefits already offered by Govt. All said and done, in spite of fiscal attraction the net investment in rural areas from urban pockets still remain at nascent level because of poor logistic. Unless and until the quality of rural-urban logistic improves; the rural economy will continue to be plugged by the vicious cycle of negative transfer.
Therefore, Central, State Govt. and Industrial houses need to make concerted efforts in improving the logistic and connect the Rural-Urban economy.

Once the quality of logistic improves in the country then our Industry can become compete with China by leveraging 'distributed manufacturing'by engaging unemployed and under employed rural women and men in rural areas on a part times basis in lucrative jobs, again, on the basis of their individual interest & skill. This will add a new source of additional income for rural people and help transform the quality of life in six lakh plus villages in the country.
If we look at a case where, we can employ ten crore village women for two hours daily at Rupees Ten an hour then that would generate an annual income of 18 billion USD per year.