The Quality of Growth Is Not Known
Atul Chatterjee
September 06, 2009
Recently there has been a downward pitch of growth India is expected to experience in the coming year. It is going to be at 6 plus instead of 8%. Let´s look at a few components of the 8% growth which has been broadcast.
A road gets built contributing to the 8% growth. Good. By the end of the year it develops (not suffers) potholes. These potholes are filled the next year. This act of filling potholes needs material, machinery and manpower adding to GDP hence growth hence development. So if you build roads with advanced engineering techniques which develop potholes the GDP increases again when the potholes are filled. Other nations worried about growth should take a cue from India. Build so that things do not last.
In London the underground water mains system is being relaid after existing quietly for 180 years or so. If they had built the water mains to have lasted for around 20 years they would have had multiple chances to increase GDP. In that respect India is more advanced, water pipes have to be replaced within 20 years. Of course all the better if they burst before that. It provides a windfall gain to GDP.
Look at the number of hospitals springing up in India. It´s fantastic. That obviously adds to GDP. So the more sick people we have and if they are able to afford hospitalization the higher our GDP.
July 2009 was marked as a very dry season for most parts of India. Normally the monsoons shower rains at this time making for humid conditions. Infections are common and the sale of antibiotics spikes. Not so in July 2009, so pharma companies performed poorly in the sale of many categories of antibiotics, providing a loss to GDP.
Obesity is growing in India and has ballooned in the USA. The result of obesity is that gymnasiums and weight loss gurus are doing brisk business adding to GDP. Then some obese people develop high cholesterol levels and other ailments. Medical care costs money and this adds to GDP.
Soon after the Beijing Olympics I read an article in which the China government was said to be planning to raise the average amount of exercise a citizen performed by 15 minutes (?) a day. I talked about this amongst a group of friends. One said that it was a ´communist government´ and that is why they were doing it. I tried to argue that whether it was communism, Gandhism or paganism it was worthy of emulation. I was told about democracy and freedom of choice being curtailed. I sighed in agreement. China will be poorer in terms of GDP for making its citizens exercise and remain fit or else they would be waddling to pharmacies to buy medicines and contributing to hikes in GDP.
The more cigarettes sold, higher the GDP. In the case of India there are a plethora of tobacco based products sold in huge quantities. So not only does the GDP increase directly, but the there is a second round affect when users go to doctors either with cancer, ulcers or other ailments. Medicines and hospitalization yields further increases in GDP. Rah Rah 8% growth.
There are ´good´ commodities and ´bad´ commodities a fact studied in economics. But then why is there no good growth and bad growth? Can´t there be deflators for numerical growth? Shouldn´t we be able to measure the quality of growth? Growth has become the God of all things.
A road gets built contributing to the 8% growth. Good. By the end of the year it develops (not suffers) potholes. These potholes are filled the next year. This act of filling potholes needs material, machinery and manpower adding to GDP hence growth hence development. So if you build roads with advanced engineering techniques which develop potholes the GDP increases again when the potholes are filled. Other nations worried about growth should take a cue from India. Build so that things do not last.
In London the underground water mains system is being relaid after existing quietly for 180 years or so. If they had built the water mains to have lasted for around 20 years they would have had multiple chances to increase GDP. In that respect India is more advanced, water pipes have to be replaced within 20 years. Of course all the better if they burst before that. It provides a windfall gain to GDP.
Look at the number of hospitals springing up in India. It´s fantastic. That obviously adds to GDP. So the more sick people we have and if they are able to afford hospitalization the higher our GDP.
July 2009 was marked as a very dry season for most parts of India. Normally the monsoons shower rains at this time making for humid conditions. Infections are common and the sale of antibiotics spikes. Not so in July 2009, so pharma companies performed poorly in the sale of many categories of antibiotics, providing a loss to GDP.
Obesity is growing in India and has ballooned in the USA. The result of obesity is that gymnasiums and weight loss gurus are doing brisk business adding to GDP. Then some obese people develop high cholesterol levels and other ailments. Medical care costs money and this adds to GDP.
Soon after the Beijing Olympics I read an article in which the China government was said to be planning to raise the average amount of exercise a citizen performed by 15 minutes (?) a day. I talked about this amongst a group of friends. One said that it was a ´communist government´ and that is why they were doing it. I tried to argue that whether it was communism, Gandhism or paganism it was worthy of emulation. I was told about democracy and freedom of choice being curtailed. I sighed in agreement. China will be poorer in terms of GDP for making its citizens exercise and remain fit or else they would be waddling to pharmacies to buy medicines and contributing to hikes in GDP.
The more cigarettes sold, higher the GDP. In the case of India there are a plethora of tobacco based products sold in huge quantities. So not only does the GDP increase directly, but the there is a second round affect when users go to doctors either with cancer, ulcers or other ailments. Medicines and hospitalization yields further increases in GDP. Rah Rah 8% growth.
There are ´good´ commodities and ´bad´ commodities a fact studied in economics. But then why is there no good growth and bad growth? Can´t there be deflators for numerical growth? Shouldn´t we be able to measure the quality of growth? Growth has become the God of all things.
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