"The Mirage of a $15 Trillion Economy: Why the Numbers Don’t Add "

 

"The Mirage of a $15 Trillion Economy: Why the Numbers Don’t Add "

When a $15 trillion economy operates far below its potential, it is the citizens who bear the heaviest burden. This shortfall often signals governance plagued by inefficiency, dishonesty, or an inability to leverage the economic and human capital at its disposal. Examining the relationship between governance, currency value, and quality of life, this article delves into India’s current challenges and offers insights from global examples.

The value of a currency goes far beyond its exchange rate; it reflects how effectively a nation’s money can meet the needs of its people. A strong currency signifies not just economic resilience but also the capacity to support stable and fulfilling lives for citizens. Take the US dollar, for example. Its dominance allows Americans to enjoy greater purchasing power abroad. Even in Europe, where the Euro is nominally stronger, its real purchasing power is tempered by higher living costs. However, European nations offset these costs with universal healthcare, free education through the 10+2 level, and robust public infrastructure. While these benefits don’t directly enhance the Euro’s exchange value, they create a quality of life that demonstrates the importance of governance.

In addition to welfare benefits, Europe has invested significantly in sustainability initiatives, such as clean water systems, renewable energy, and efficient public transportation, showcasing how policy-driven efforts shape currency value and economic perception. Meanwhile, Japan’s unique challenges, such as limited land for housing, highlight how local constraints affect the real value of a currency.

The path to improving a currency’s value lies in systemic reforms—boosting production, building infrastructure, and reallocating resources more effectively. Expanding food production would lower costs, increasing housing supply would reduce rents, and enhancing energy generation would bring down electricity prices. However, governance plays a pivotal role in these reforms. When governments concentrate large-scale projects in the hands of a few corporations and overlook their inefficiencies or failures, wealth becomes concentrated, reducing circulation and stifling growth. Policies like loan waivers in the trillions to these corporations further exacerbate the problem, devaluing the currency and undermining the broader economy. This has been one of the key issues under India’s current leadership.

In stark contrast, Delhi provides an illustrative example of how governance can elevate the value of currency for its residents. The AAP government’s policies have focused on tangible public welfare measures, such as providing 200 kW of free electricity, 20,000 liters of clean water per household monthly, free healthcare at local clinics, and subsidized transportation for women. These initiatives significantly increase the purchasing power of Delhi’s residents, effectively stretching the rupee further.

The success of these policies lies in their efficient execution. Taxes collected are reinvested into critical infrastructure and services—schools, hospitals, and roads—rather than being lost to corruption or inefficiency. Programs that encourage entrepreneurship among students further bolster production and innovation, paving the way for a more resilient economy. These efforts have not only improved living standards but also drawn migration to Delhi, showcasing the appeal of effective governance.

When compared globally, Delhi’s potential is striking. Cities like New York ($2.26 trillion), Paris ($1 trillion), and Berlin ($300 billion) boast larger economies, but Delhi surpasses many of them in public welfare delivery. For instance, while 23% of adults and 25% of children in New York live in poverty, only 16.6% of Delhi’s population resides in slums. Despite its challenges, Delhi provides free healthcare, quality education, subsidized utilities, and public benefits that many wealthier global cities fail to deliver. Officially, Delhi’s economy is valued at less than $10 billion, but if its full contributions, including the services it provides, were accurately assessed, its true economic value would likely exceed $500 billion. The disparity in how labor is valued between developed and developing nations also cannot be ignored. Workers in developing regions often produce the same, if not better, quality of work yet receive far less compensation. Delhi’s governance, with its citizen-focused policies, is far more effective than the efforts of many larger cities in developed nations. When comparing apples to apples, Delhi’s economy—and its societal impact—arguably rivals that of the world’s leading cities.

Scaling Delhi’s governance model across India could unlock the country’s true potential, transforming it into a $15 trillion economy. This shift would strengthen the rupee and empower millions of citizens to lead dignified lives. The link between governance and currency value is undeniable. Countries that prioritize equitable resource distribution and citizen welfare create environments where economic growth flourishes and currency strength follows. While advanced economies like the US struggle to maintain such balances, India has the opportunity to set a new precedent.

However, realizing this potential requires fundamental change. India must adopt governance models that prioritize public welfare, reduce costs, and boost production. Policies that encourage transparency, equitable distribution of wealth, and efficient resource use will strengthen the rupee and improve quality of life.

Note: This vision remains unlikely to materialize, as a significant portion of India’s population continues to cling to the regressive ideologies of the Manu Smriti, ignoring the far superior and progressive constitution of India that guarantees equal rights for all. Compounding this issue is the attitude of 90% of small Indian businesses, which view even a 1% revenue share with workers as a magnanimous act. Profit-sharing is practically taboo, perpetuating a system where wealth remains stagnant and out of circulation, stifling economic growth. Until these mindsets shift, the dream of a thriving, inclusive economy will remain just that—a dream.