Sanjay Negi's thoughts on Current Affairs and Information Technology Directions.

Google

Saturday, April 14, 2012

Will removing corruption in India improve its economic performance? | LinkedIn Answers | LinkedIn

Will removing corruption in India improve its economic performance? | LinkedIn Answers | LinkedIn


Will removing corruption in India improve its economic performance?

It seems a short answer is a big NO....and here is why...


The white accounted GDP of the country is about $1,300 Billion. The central and state governments together have an annual budget of $750 Billion. This means an astonishing 60% of the country's white GDP is appropriated by the governments through taxes, borrowing and money printing. Much of this money is mis-allocated, consumed by a bloated bureaucracy or simply pilfered.


Any other country would have collapsed under the weight of 60% of GDP being channelized through government. The miracle of India is its much maligned so called "black economy" which is at least as large as the known economy. This generates the unaccounted wealth over which the government does not lay its dirty hands....it seems this is what actually saves the country's economy and keeps the white part of it growing at 9%.


All the well intentioned hullabaloo over corruption is actually barking up the wrong tree... even if corruption was reduced to zero, the sheer size of government and its populistic programs would continue to drag down the economy....indeed it could even become much worse....if elimination corruption bring the black economy into the accounted visible economy, the greedy government bureaucracy would be tempted to expand rapidly and thereby drive the last few remaining nails into the coffin...

0 Comments:

Post a Comment

<< Home