Sabeer Bhatia Challenges Country's GDP Calculation, Stating, 'In India, if I give you INR 1,000...'

According to Hotmail co-founder Sabeer Bhatia, if India wants to compete with China, it needs to reconsider how it gauges economic development and get ready for significant adjustments in workplace culture. Bhatia questioned India's existing GDP calculation method in a recent podcast. He advocated for a new model that takes productivity and effort into account rather than just financial transactions. Bhatia attacked the way India calculates GDP. He claimed that it overstates economic output by emphasising financial transactions rather than real labour. According to him, India's GDP is completely incorrect. And it only takes two seconds to look at how GDP is calculated. He added, "If I give you INR 1,000, 18% GST is taxed on it. If you return INR 1,000 to me, 18% of that amount is considered INR 2,000 in GDP. You haven't worked at all. I haven't worked. I just handed you some cash. Giving money is not a job. Good work is work."

Comparing the Tax Calculation with the USA

He likened it to the way GDP is determined in nations such as the US, where economic output is correlated with the value of labour and the number of hours worked. Everyone has an hourly rate, he explained. Everyone calculates how many hours a person works, reports that information to the government, and pays a specific amount of taxes, which determines the GDP of the nation. Bhatia says that by implementing a work system that values human effort, India can address this issue. He said that the first step in fixing this in India would be to ensure that everyone is paid on an hourly basis. How many hours do they really spend working on their projects? In order to track work according to effort, he proposed setting fixed hourly wages for all employment categories, including physical labour, law, and medicine.

How India can Compete with China?

Bhatia opined that if India wishes to catch up to China's advancements, it must address its deficiencies in technical skills and work ethic. India needs to change its work ethic, he said. Anyone who is willing to work in China is still valued, and engineers continue to work as engineers after graduation. He condemned the trend in India for engineering graduates to enter management positions rather than engage in construction or creation. After graduating as engineers, 99% of Indians go into management and begin offering gyaan to everyone. Where is the work ethic where they actually go out and construct things and work with their hands? He also drew attention to the value structure in society that prioritises outsourcing over in-house software development. He continued by saying that although he is the software master of India and the business guru of dealing in, you know, body shopping—not software—people in India admire anyone who works with their hands.