Anil Deep Mehta
Smile -a downside convex-curve from ear-to-ear takes away all creases from the face and catalysis smile and laughter. There are 43 muscles in the face and thus smile and laughter exercises all these muscles and fades the hypertension in the bargain. But does Indian economy serving this purpose or the biggest economy in the world doing it to its subjects? For that let us first understand the sizes of economies and happiness index of these countries.
Recently there were some music to the ear as far Indian context is concerned. India became the fifth largest economy in the world, superseding Britain, and Mr. Gautam Adani became the second richest person in the world in market capitalization as per Forbes listing. The following graphic representation would give a larger view of who stands where so far as size of the economies is concerned …..
As is evident USA with size of $25.3 trillion is the biggest economy in the world and makes up approx 24% of world’s total GDP, followed by China having $19.9 trillion economy, Japan with $4.9 trillion,Germany with $4.3 trillion and UK with $3.4 trillion. India adorns the sixth position now with the size of $3.3 trillion in the above graph. But as per data issued by Ministry of Statistics & Programme Implementation in India the GDP size of India has risen to $3.535 trillion and adorns the fifth position superseding UK. In rupee terms in Q1 of FY 2022-23 India has said to have attained Rs.36.85 lac crores as against Rs.32.46 lac crores in Q1 of FY 2021-22 showing a growth of 13.5%. Clearly from above India is one of the fastest growing economies and is poised to attain position of developed economy very soon (presently India is termed as emerging economy. Ireland at present is the fastest growing economy in the world. Some economist however are skeptical about growth story of Indian economy and tend to see it as economy generating equitable growth, an economy which must change the fortune of last man standing in the row. The growth of economy with high unemployment rate is not a very rosy picture altogether.
GDP per capita.
GDP per capita is the sum of gross value added by all resident producers in the economy plus any product taxes (less subsidies) not included in the valuation of output, divided by mid year population. It measures how much a country’s economy produces per person, rather than in total. This also acts as a very rough measure of income or standard of living for individuals living in a country. It is reflection of such economic health into an individual citizen’s perspective and determines the standard of living in that particular country.
As per data available in Investopedia the GDP per capita of first six big economies for FY ending 2021 is as under:
1) USA $69287
2) China $12558
3) Japan $39285
4) Germany $50801
5) U.K $47334
6) India $02277
GDP per capita thus provides insight into effect of population on to the available income of an individual. USA attains5th rank amongst 195 countries in the globe. First in this list is Luxembourg with GDP per capita of $116921 followed by Ireland and Switzerland. Ironically India stands at 142nd rank for considered population base of 141.71 crores, which under this evaluation is not a good standing.
Main factor behind rise in GDP of a country is free environment under which entrepreneurs can flourish.The above graphic representation reveals that USA grabs supreme position as far as housing of world’s biggest companies is concerned. China remains second and only 2 Indian companies figure in world’s 100 big companies. If India has to compete with the world’s big companies it need to create free environment for establishment of big companies. Indians are capable of rising to the top and there is no doubt about that. Top position of some of world’s top companies are adorned by Indians only. Thus there is only need of loosening of the regulations and creation of conducive ambience which can propel growth, wealth and employment.
Happiness Level.
The world Happiness Report (UN sponsored index) is a publication that contain articles and rankings of national happiness, based on respondent ratings of their own lives, which the report also correlates with various life factors. Finland was ranked the happiest country in the world according to the World Happiness Report from 2022. The Nordic country scored 7.82 on a scale from 0 to 10. The other Nordic countries Denmark and Iceland are at second and third places respectively. The top 20 counties in this coveted report are Finland, Denmark, Iceland, Switzerland, Netherlands, Luxembourg, Sweden, Norway, Israel, New Zealand, Austria, Australia, Ireland, Germany, Canada, United States of America, United.
Kingdom, Czechia (Czech Republic), Belgium and France.War-torn Afghanistan, already at bottom of the table for few years now, has seen its humanitarian crises deepen since the Taliban took power again last August. UN agency UNICEF estimates 1 million children under five years could die of hunger this winter, if not added. The report ranks 150 countries based on several factors like Real GDP per capita / social support.
How is Happiness Measured.
Healthy life expectancy, Low corruption, High Social Trust, Generosity in a community where people look after each other and Freedom to make key life decisions. Regressive analysis looks at tangible and intangible factors that could factor in :
* Social Support
* Life Expectancy
* Freedom to make life choices
* Generosity
* GDP Per Capita
* Perception of Corruption
* Positives and negative affects.
While the report do not definitely point to wealth contributing to happiness, there is a strong correlation across the board. World’s poorest countries have the lowest happiness scores, and the richest being the most happy. Some geographic similarities are observed though yet income inequality is a definite factor in determining the happiness of a particular country. Further by using tool such as Gini Coefficient (that demonstrates a degree of inequality in a distribution of income wealth – a score of 0 shows perfect equality and 1 shows perfect inequality) it was found that countries with lower income inequality tend to report more happiness. However, exception is observed in Latin Countries where despite high income inequality level of happiness was similar to many much wealthier European nations. But it is observed that Globally the lower middle income group level is where the most variance in happiness occurs.
India ranks 136th in the happiness list out of 150 countries evaluated and just by a whisker saved to be bracketed into last 10 most unhappy . In East Asia and Oceania India with a score of 3.8 remains the most unhappy country in the region. Even Pakistan at 103 and Sri Lanka at 126 are comparatively better placed than India. Taiwan is the most happy country with a score of 6.5. India’s poor scoring is because of high level of poverty. Pertinent to mention that COVID 19 pushed an additional 75 million people into poverty.
Why Does Money Buy Happiness?
The report warns that any theories behind why happiness increases with income are purely speculative. However, it does list a few possibilities:
* Increased comfort
As someone earns more, they may have the ability to purchase things that reduce suffering. This is particularly true when comparing low to moderate income groups-larger incomes below $80,000/year still showed a strong association with reduced negative feelings.
* More control
Control seems to be tied to respondents’ happiness levels. In fact, having a sense of control accounted for 74% of the association between income and well-being.
* Money matters
Not all respondents cared about money. But for those who did, it had a significant impact on their perceived well-being. In general, lower income earners were happier if they didn’t value money, while higher income earners were happier if they thought money mattered.
Whatever the cause may be, one thing is clear-Biggie Smalls was wrong. Looks like more money doesn’t necessarily mean more problems.
Earlier studies did not authentically endorse happiness level increases or decreases with increase or decrease of income. However, new research suggests otherwise as is clear from the graph above.
Using over a million real-time reports from a large U.S. sample group, a recent study found that happiness increases linearly with reported income (logarithmic), and continues to rise beyond the $80,000/year mark.
Hence GDP per capita do draws relevance in achievinghappiness level.
Indian Perspective.
India with a surging population which as per some estimates is at 141.71 crores need to grow at 9 percent per annum consistently for the next five years to become a five trillion economy by 2028-29. As per Ministry of Statistics & Programme Implementation in first quarter of ensuing financial year Indian GDP is estimated to attain a level of Rs.36.85 lac crores as against Rs.32.46 lac crores in corresponding period last year shows a growth of 13.5% on year-on-year basis. The size of GDP at Rs.3.535 trillion ranks India as 5th largest (GDP nominal) in the world.
But with inflation reeling at 7% , unemployment rate 8.28% as at August 2022 and GDP per capita of $2277 is not a very good story on micro analysis. As per Centre for Monitoring Indian Economy (CMIE) report salaried jobs fell by 4.7 million and ranks of unemployed increased by 6.6 million in August 2022.
The state vide unemployment data graphically presented above gives micro view about unemployment scenario in states and Union territories of India. The states and UTs with unemployment rate higher than the country average need to invite investment in their respective regions besides encouraging entrepreneurship, which can improve the levelssignificantly.
The central Govt. at its part need to give a push to financial reforms so that growth of 9% is achieved consistently for next 5 years. Only then improvement in the aforementioned parameters and equitable growth can be attained. Government’s ‘Make in India’ program, commercial opening of ISRO, disinvestment of PSUs and rationalization and widening of tax net are few of the focused areas which can stipulate sufficient impetus to the GDP.
(The author is former General Manager J&K Bank Ltd.)
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