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Friday, January 27, 2006

All the Ps of prosperity and poverty

Last NDA Government of India had put all its eggs in one basket called “India Shinning” and it failed in its appeal to 1/6th of world’s population in the elections. Recently, many analysts have proclaimed that India is poised to become the world’s third largest economy on the scale of GDP PPP (purchasing power parity)this year surpassing Japanese economy.

I am really proud of this fact, especially because this rating takes into account the exchange rate of local currency which levels some variables. The caveat I see with this is that this really shows the overall picture of an economy ignoring the individual purchasing power. Example, India is currently ranked fourth (International Dollar 3,290,800 M) compare this to per capita PPP of India; India is poorly ranked at 125 with meager International Dollar 3,080. And 133rd for GDP per capita.

All this ranking is based on averaging, which, I believe, further weakens the stand. I have heard that statistics should be like a mini skirt, but I think combined with stockings this will be nicer. Going by law of averages, if a person’s head is put in a 100 degree oven and feet in -100 degree freezer the person should be absolutely OK, right? Try it out and we’ll discuss this further. Coming back to the original point, the ranking really is based on averages and not median. This really tilts some reasoning in a deceiving way.


So, this really does not indicate the ground realities but more collective information. I would be keen to see the median PPP and add fourth P to this for population.

I might sound little socialist here, can’t help it I am egalitarian with a hint of capitalism and a dash of utilitarianism all shaken not stirred. I know this does not sound familiar to you.