Economy is one of the most dreaded subjects, still the most important course to be studied for building nations. What is Economy? We all have a threshold understanding of what Economy is. I need not to go into depth. We all have elementary knowledge about all the indicators discussed in Economy. To name a few, GDP, Gross Domestic Product, Per Capita Income, Inflation etc.
Let us have a little talk about Economic Picture of present day India. Let us discuss some gist of the Economy.
Well, we all know what per capita income is. It is the amount resulting from dividing the GDP by Total Population of the nation. In India’s case the population is very high and growth rate of population is not low as well.
Per Capita Income
The ways to increase the per capita income are
1. Increase the GDP of the nation.
2. Decrease the population of the nation.
How are we going to do this? The point 2, decrease the population is easy to understand. If the Fertility Rate is lesser than 2, the population decreases. That is, the fertility per woman should be lesser than 2. If it is equal to 2, the population stagnates. If it is lesser than 2, i.e. 1.9, 1.8, 1.5, it decreases. Majority of the Developed Nations have it lesser than 2.
Following, one can see the population of major nations and also, it can be ascertained the population growth rate is positive.
Moreover, the Fertility Rate of India and the Permanent 5 nations in UN is as follows:
Fertility Rate – Children per Woman
Please note the fertility rate of India alone is greater than 2 which is 2.51. Nevertheless, the evident continuous decrease is a good news.
Hence, the only means to decrease population soon, is to decrease the Fertility Rate as far as possible in India. It can be decreased much, if Indians produce only one child for time. With Fertility Rate equal to 2, the population curve shown above will become parallel to x-axis. The population will become constant but it would be still very high. If the Fertility Rate for the nation could be managed to be reduced further, the population of the nation will start decreasing. This will decrease the pressure on the resources of the nation. This milestone is to be achieved. Lesser manageable population with Fertility rate of 2, which means constant lesser population, is the goal.
Well, accordingly, I can say, that if Indians manage Fertility Rate of 2, GOI can definitely create or generate resources enough for whatsoever total population India has at that time; making Fertility Rate the only important, crucial indicator. The GDP should be directly proportional to the Total Population. Larger population will need higher GDP for maintaining the “Per capita income” standards.
Hence, People of India, produce less. Be content with one child. This is democracy and not communism like China. Hence, only directives could be given to the citizens. GOI cannot force and push citizens to one child policy, as done in China. This should be a conscious step to be taken by citizens at their part only.
The next point is, Increasing the GDP. How to do that? Or, how it occurs? Or What is the dynamics? Our aim should be to first reduce the number of variables in equations and also, the indicators on which we need to concentrate. The only variable for GDP is business. Well the second one is definitely agriculture. But let us first tackle Business.
Gross Domestic Product
The Vaish, the Baniyas, the Vishnu-Laxmi Putras. Here, I am going to touch the epic debate of Socialism and Capitalism. Through out history it is seen as well as quoted again and again, the societies keep on oscillating between these two extremes. That is what Karl Marx theory propose: the capitalism one day has to give way to socialism, etc etc.
In capitalism, there are business men. Strong, influential and powerful businessmen and business houses. As they grow their acumen for business, their money grows, thereby grows their stature. A business man becomes bigger larger huge businessman. Now, he keeps on investing more and more under his name, under one flag. Hence, all the money keeps on gathering in some couple of hands. Hence, the GDP increases but the inequalities in the country increases too. And it is reported in many societies that meager 1% of the population is holding 30% of total GDP to emphasize on this point only (this is just an example). Remember the popular “Occupy Wall Street” protest. That protest happened in US: the best capitalist nation today; having highest GDP but having inequalities higher than India (higher inequality results in higher GINI index). The GINI index is used as indicator for unequal distribution of income. The trend is shown below. It can be seen that the inequalities and hence, the index are increasing in India too.
GINI Index – For Equality Measurements
Hence, the GDP is not the right criteria to judge whether the nation is prosperous or not. In turn, a conclusion is reached that the “per capita income” is also not the right criteria to judge the prosperity of society, because it just shows the average income of the society, which does not necessarily mean that every person in that society in earning equal to “per capita income”. It is possible that a country having quite high GDP, may have higher per capita income but still, the inequalities exists. USA being the epitome of such society; having higher GDP with higher inequalities, comparative to India. For instance, Google, McD, Pepsi, Coke and other big houses of USA generate quite a GDP for the nation. But still inequalities are not addressed. Hence, GDP or “per capita income” indicators both are not sufficient to judge the prosperity of the nation.
There is a need to define suitable criteria for the above said purpose.
Purpose: Higher “per capita income” and Higher Equalities (Lower GINI index).
1.Higher Per Capita Income: Higher GDP and Lower Population
2. Higher Equality: Proper distribution of GDP (National Income), Lower GINI index.
Better Distribution of High GDP. Capitalism ending at Socialism!! Can we reach the solution of the problem consciously? Is it possible?
Yeah. It is. With sound fundamentals.
The problem of India lies in this fact, that India has been led by “Not that economically smart” leaders, and “very smart bureaucrats” but People of India being “unaware and uneducated” of this subject. “What is it that a common man should do” is missing. What is the directive to the common man. There is no such directive to People of India for uplifting the economy by the GOI or by the very intelligent Economists or by the very intelligent Bureaucrats.
In this case, my studies reflect that, only and only, the People of India can help themselves. Together. Nobody alone. Nobody else.
The People of India should be made aware of what they should do at their level.
Hence, I write this article with a hope, that the article reaches masses.
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Make world more equitable.