Sabeer Bhatia, co-founder of Hotmail, has strongly criticised India’s approach to calculating GDP, calling it “basic maths” that the country is getting “entirely wrong”. He added that the entire country is “lying about GDP”, and contrasted it with the method other countries, such as the United States, use, where GDP is directly linked to actual hours of work and the value of that work.
Bhatia shared his “brutal remarks and advice for India” in a podcast with a YouTuber in San Francisco.
‘India is calculating GDP wrong’
“The whole country is lying, our GDP is all wrong,” Bhatia said on the podcast, adding that “you just need two seconds to take a look at how they are computing GDP.”
“In the United States or anywhere in the world, GDP is computed based on the amount of human hours of effort put in by everyone. Everyone has an hourly rate. Everybody figures out how many hours of effort you put in, you report that to the government, you pay a certain amount of tax, and that determines your GDP,” Bhatia went on to say.
Bhatia went on to illustrate what he sees as a flaw in India’s system. “In India, if I give you a Rs 1000, 18 per cent GST is taxed on it, and you give back Rs 1000 to me, 18 per cent GST is taxed on it as well. It’s counted as Rs 2,000 GDP. You have done no work, I have done no work. I have just given you my money. Giving money is not work.”
“I am saying this is basic maths. We are getting GDP wrong. And yet we are going to become a 4.2 trillion, 20 trillion, 15 trillion economy. I don’t effing care how many trillions we are making. We are counting it wrong,” he added, stressing that India is not calculating GDP as it should be doing.
‘India should implement hourly work-tracking system’
When asked how India could correct this, Bhatia suggested implementing an hourly work-tracking system.
“First, make sure that everybody is based on an hourly system. How many hours of effort are they actually putting into their work? And every human being is valued based on hourly rate. You create different hourly rates for different categories of workers,” the 56-year-old further said.
He also spoke about India’s need to make education more inclusive in order to compete with China. “China educates everybody. It’s like subsidised education, subsidised cars… In India, education today is the prerogative of the rich. And what do the rich do? They want to just get an education and go and marry somebody and get dowry. What kind of thinking is this?”
Bhatia revealed that he “built Hotmail by learning on the job”, adding that “free knowledge from the Internet is the real teacher”. “Innovation comes from doing, not just studying,” he stressed.