India to become US

Recently I had a discussion with my friend. He was mentioning, “We are so much underpaid. If we were in US, we would have been getting 8 times more!” Adding to his points, “Same is the case with UK and other developed countries.” He has good knowledge about the economics. So supporting his comments on salaries, he added, “US has just 300 million people and still able to manage 14 trillion GDP and we (India) are more than 1.2 billion now and just have 1.2 trillion GDP.”## Then I said, “My friend, think in this way, India is managing its 1.2 billion population with GDP of 1.2 trillion where US need GDP of 14 trillion for its 300 million population! Who is better?” Here is the point where new perspective has come about India.



It’s true that India has the population of 1.2 billion and GDP of only 1.2 trillion whereas US can have DGP of 14 trillion with just 300 million people. And they are having such higher salary packages.


I asked him a single question: “What if in India, such high salary packages are being offered?” Forget about the capacity, it can be managed. But, going ahead what will happen? With higher salaries, we will spend more. But, with higher spending, demand of goods will increase, with same supply, so prices of the goods will go high. This leads to inflation. Government will try to buy more goods from other countries to fill the supply crunch. For that government need money. But remember, we have higher money to with us. So, government will go for higher taxes (as it is in US). And eventually with proper prices people will get things. But, still there is higher income. So people will buy more and at the end waste more (like US). And the whole cycle of high income and spending will turn in to higher GDP for India. And no doubt it will be more than US. India will become another US! Or may be bigger! Wow! That’s great! Then why not we are going in that way?


Now think from another side of demand supply chain. If India, like US, consumes more and wastes even more; then what will happen? Do resources in the globe have sufficient resources to supply this increased demand forever? And the answer is, NO. Currently, when we are managing with economy of 1.2 trillion and other ‘developed’ countries with higher GDP, are consuming more. With this scenario, the globe is facing very high resource crunch with other environmental problems.


Going that way will lead us nowhere. We have to reduce the resource usage. Currently, developed countries along with US have realized that high consumption should be controlled and should reduce the resources usage. In west, people are reducing their usage by “Going Green” and managing their life style with less money. And guess what, India is just doing that thing right now! In fact, it is pioneer in that.


So it is US who will follow India; not India to follow US.






## GDP – Gross Domestic Product – which generally means how much money a country is making and it is used to compare the countries’ economy