Politics vs Economics

As a person belonging to the business community with Baniya and Marwari tag , I hv always noticed the economics ahead of politics. This is further strengthened with the base in Gujarat. Economics always superseded politics till very recently. However in 5-6 years I have noticed significant lead of politics over economics . Now the politics is more important than the economics or commerce. People at mass level have left aside the importance of economics . Now people are interested only in politics . This  shift in mindset is a significant change in our society which is generally noticed during war or crisis times. Why and how this transformation in mindset could happen is a very interesting issue. Till recently politicians used to blame each other for failure in economy . Public too was bit sensitive about inflation, interest rates, price rises , foreign inflow, rupee/ dollar exchange rate, job etc etc. now people more concerned about CAB, 370, temple, statue, religion, caste, neighbours etc etc. you talk any body anywhere in the country all will discuss about these issue and feel elevated with the knowledge acquired through WhatsApp. WhatsApp and google have taken over all the other knowledge sources irrespective to the authenticity. 

In such situation it seems that people feel threatened from deep inside and only concerned with their survival. Somewhere media has played very important role in this mindset transformation. It is true what ever is seen or heard multiple times we start believing and that is the reason that we all are put into a situation where the survival become threatening forcing the people to leave aside economy . 

I don’t know the long term effect of this but one thing is certain - people will be least interested in development and more into different things resulting in to poor growth . Although the political issues mentioned above are also of importance but superseding economics is something worrisome. We have been ahead of our neighbours due to different mind set but this may not continue in future and may be we will imbibe their mindset. Hope we soone realise this and return back to our growth track. 

C P Jain

GDP, GDP , GDP ......?

In current times, most common matter for discussion after weather is GDP. All media channels, newspapers, magazines etc. are full of this word. Every one in our country has become economist along worth the politician. But do we really know about the GDP? Is it important factor and where do we stand in terms of GDP in world economy . 

Although I am a layman as far as economics is concerned but still would like to share my views with little knowledge acquired from here and there. 

Let's analyse bit deep this GDP. 

What is GDP. : Gross domestic product is a value of all goods and services produced by a country in a specific period commonly annual. This helps In understanding the economic size of a country . Our country’s GDP was 2.935 tn usd in 2019. We are 5th Rank in size of economy after US, China, Japan & Germany. 

Now the question arises is what is the importance of GDP and does it really indicates perfect economic situation.

GDP reflects size of economy and hence the market of that country also. In that sense  GDP indicates overall volume of a country if we talk in laymen language irrespective to the size of population. It is just like a income of a family irrespective to the number of dependants. So we can say that yes to understand the size of a country it is important but this is only partial observation.  In fact it confuses with prosperity. We are always taught that the higher GDP will make us rich. This is not fully correct. The GDP is only one factor in deciding the prosperity of a nation. If we divide GDP by the population of a country we can arrive at the per capita income of its' citizen. 

We are ranking  5th in GDP size but if we look at per capita income then we rank at 127 i.e. far below many nations. Our per capita income is 2172 USD as against 8000 USD average level. If we analyse the economy by per capita we are far below the average of the world. In that sense our situation is too dismal. 

In fact the economic analysis of any country should be based on both the above parameters and not one factor only. Considering the population size we are far below average. Whatever be the growth it will take long time to even touch the average mark. 

Also the economic parameters should be mixed with the other factors like freedom, political situation, happiness level, education, mortality age, health care , infrastructure etc. to understand the real situation of economy in any country. 

Hence in my view defining ourselves at number 5 is of no use rather misguiding considering the per capita income. 

CP