0:01 Is everything all right with the Indian economy? I am not asking this but rather questioning it. And why am I questioning? It's because I find wealth inequality widening and data of Indian economy misleading. After all, India as a country has very poor financial literacy. People don't understand basic economic indicators like difference in asset and liability or wealth concentration at the top size of the economy and demographic distribution and media stories of owners having no relevance for them rather
0:47 negative relevance for them. I am Ravi Sha and I keep raising the issue of Indian economy not in the right direction. I keep questioning media reports that glorify wealth concentration in the hands of select rich. I question why is rich getting richer and poor getting to a level of survival only with free ration. I question a ballooning economy where an average Indian household is reing under the dual burden of rising inflation and stagnant wage growth. I question why our national debt is at an all-time high when the GST collection is also high. Why a country like India historically
1:34 known for the saving has alltime low gross domestic savings? Why household debt and household world mortgage are alltime high? Am I not justified in raising such issues that concern the common Indians? But every time I question the core issues, I'm reminded of how India is growing and the arguments are based on three key determinants, three key assumptions. Number one, India is going to be a $5 trillion economy. Number two, India is going to be the third largest economy and third, India is producing more billionaires than anywhere else in the world.
2:20 Let's examine the three arguments and anybody anyone can see how flawed are these arguments. Argument of $5 trillion economy. Okay. What's the size of the economy of which Saudi Arab trillion US? Are we more prosperous than Saudi Arab? You will also have to see the size of the demographic. India's present economy of 4.19 trillion is for a population of 140 cr plus while Saudi Arabs 1.1 trillion economy is for a population of 3.3 cr who is more prosperous. Such a basic economics
3:06 cannot fit into the minds of the masses. It's like I have to feed a family of 25 25 with 50 rupees while the neighbor has to feed only for two members with 40 rupees earning who is in a better economic condition and if you remove the wealth at the top 5% in the size of the economy then 95% Indians have lesser wealth than many subsahara countries. It is hence no surprise India's ranking in ranking in global happiness index is at 118 out of 147 countries arguments of third largest economy now yes India has emerged as the fourth largest economy by
3:53 marginally beating Japan but is this the right metrics to evaluate an economy it's only good for the poor masses to feel proud of something the wealth of Japan with almost the same size of economy is for a population of 12.5 cr and not 140 cr plus. We will soon beat Germany to emerge as the third largest economy by leaving uh Germany behind that has a GDP of 4.74 trillion but then Germany only has a population of 6.5 cr. The right metric to evaluate the strength of a given economy is GDP per capita. The
4:40 GDP per capita of India is 2700 US while GDP per capita of Germany is 55,910 and GDP per capita of Japan is 33,960. By the way, the economy of UK with a lesser GDP size of than Japan currently at number six has 3.83 trillion but far better placed for a population of 6.84 84 cr and GDP per capita income of 54,950. India is only parallel and comparison could be with China that has a similar demography size and has weathered more or less similar challenges but then China has a GDP of 19.23 trillion and GDP per capita is
5:28 13,690. Even if China's economy does not grow at the same pace as seen in the last 20 years, it will take India another 2530 years to catch up with China. It might sound depressing, but India's ranking in GDP per capita by the IMF International Monetary Fund is as low as 141st. Arguments of billionaires in India. India is producing maximum billionaires in the world. Okay, I would rather question whether this is good news or bad news for an economy with so high wealth inequality. Is this good news? The K-shaped economy of India where the top less than 1% is amassing
6:15 wealth and the rest are struggling is the green reality of India and mind you inflation is squeezing you from both ends. high cost of living and low wage growth. The rich are beneficiary of this inflation because their asset uh valuation is increasing with inflation. Even if someone's monthly expense rises from say five lakh to 10 lakh a month, he benefited with his wealth of 50 cr turning into 100 cr. But for an average Indian whose monthly expenses rise from 50,000 to say one lakh he falls from relative poverty to absolute poverty because there is no wage growth in that
7:02 proportion and mind you most of these newer that are flaunting their entry into billionaire club are byproducts of a startup culture right are the real rich or playing a game of bubble valuation. Many of them or rather majority of them are rich promoters of sick companies that is bleeding the investors money. I will make a separate video on these startups. But this much I would say here is that barring a handful of exceptions, none of these startups are into profits. My fundamental objection with these startups is that I
7:48 believe business is about value creation and not valuation. A small trader of chi shop trading in commodities with a small shop and earning even a lack a day which does not look like from outside is creating far greater value than these highly valued startups. These startup founders are flushed with investor money where cash bulk is always greater than the business generated. Even if one has a revenue of say 50 lakhs, they are spending lavishly with even film stars being their brand ambassadors and end up burning 6,000 k
8:34 in a year. I will not take any name and what happens in the end I believe you are in the wrong business. If your burn rate is higher than your revenue generated but these startups are highly valued on the basis of future earning potential. Wow. The example of w is just one such example and debate continues whether they failed with the investor's funds or committed fraud with their uh overly unreasonable paper valuation. Even in prop tech business, one such company has been witnessed to owners changing hands multiple times and the valuation is down
9:22 from once 4,000 K to now 560 odd K. The new owners have just one request. Now if you can't make company profitable at least reduce the cash bar are are these success stories for an economy just because the startup founders met their personal wealth and exited the companies. But no media would tell you these are successful founders who who questions how many of these startup founders and VC's venture capitalist funds have a common element in funding to make these startups valuable.
10:09 Alumni of IIT and IM even some of the success stories have this harsh reality that they got highly bloated valuations and got listed to give exit to the foreign investors. The share price of these companies could not sustain and who lost in this game. The common investors like you and me I call it a banana republic's economy. Have Indian startups made a single product that is world class like Google, Amazon or Facebook or they are just creating a gig economy of jobless youths. The Prime Minister Narendra Modi applauds the startup ecosystem in the country while
10:54 his own minister Puce Goyel questions these startups for what he calls selling ice cream. I am not sure who is right and who is showing the reality of these startups to the common man. Now someone will miss someone will be missed out and say that India is selling houses for more than 100 crores per apartment. Is that the real indicator of Indian economy? Do those buyers represent the true reality of Indians at large? Is not it a fact that the share of affordable houses have gone down from 40% to now just 18%. Those apartments are only for India
11:41 0.001% and there's an underlying guarantee that your profile is the right fit for the neighborhood. A wellguarded neighborhood that offers you potential of networking for future growth along with a safe place to park your money. That is not real estate buying selling business. Tomorrow if you get 100 cr the same developer may not sell you his apartment as your overall profile is misfit and a misfit for that private neighborhood. As per media reports one Mumbai developer refused to sell a couple of apartments in his ultra luxury project as he was
12:29 not getting the buyer with the right profile. Wake up and smell the coffee. My friends, Indians should not get defensive when a hard hard reality about lack of prosperity and misleading economic growth is questioned. Remember the UNICEF said in 1982 that malnutrition is a challenge for China. Chinese policy makers did not say it's an international conspiracy to slow down China. They rather took it as a challenge. China sent a study delegation to many countries including hold your breath India. Why India? To
13:15 learn something about green revolution. Did that make China a loser? No. A loser is one who does not acknowledge a problem. China did a turnaround and so can India but for that accept the flaw in the Indian economy first. Will Indian leaders pedestalized by the media and masses do so? Well, the list said is the best. I rest my case. Thanks for watching. [Music]
