Replies to This Discussion

Permalink Reply by Akhil Gupta on August 26, 2012 at 2:09pm

Hey I dont wanna get into economics, but please explain me how countries with very less corruption are the ones leading the world economy. These countries like Japan, Germany,France, Australia etc. are very less on corruption yet very high on GDP. So to conclude that corruption does not qualify as an argument to  support GDP. Infact there are lot more other variables which work in favor of GDP. And these variables are enhanced by corruption free environment. 

Permalink Reply by Alok 'Rodinhood' Kejriwal on August 26, 2012 at 2:30pm

Akhil, its simple - I think people here dont get the point i am making. i am not advocating corruption. i am advocating 'being practical'. lets say the the electricity fails in your office. either u buy a generator and keep working or stop ur business and travel to delhi to fight the govt - "why is there no electricity"??
im saying - as gdp grows, corruption automatically decreases. all the high gdp countries have seen this - corruption then migrates to the highest levels of power (gun manufacturers and cigarette companies bribing american senators) rather than on the street. the policeman who takes a bribe is also a citizen - he needs to feed - salary is very low. increase his salary. by creating gdp.

Permalink Reply by Sanjeev Agrawal on August 26, 2012 at 2:39pm

Alok, how can you find time to spend time on such detailed discussion. Guess someone is doing this on your behalf

Permalink Reply by Alok 'Rodinhood' Kejriwal on August 26, 2012 at 2:49pm

Sanjeev, I am so so flattered that you think that there is someone actually helping me write this :-)

I wish - how I wish!

That's the aim of therodinhoods - and its slowly coming true! Check out the quality and quantity of the posts of the members on the site now!

A year back, I was the only writer  - now I am one of the many many!

PS - this article (you may have missed noticing) was first written by me in Dec 2011. And all these counter arguments etc have happened in the 8 months since. So, I have had time :-)

PS - I love to write. That's truly my passion.

The day I have no job, thats all I will do. And yes, help entrepreneurs.

Dharma = write

Karma = help

:-))))

Permalink Reply by Ramesh on September 3, 2012 at 11:19pm

I have been following Alok Rodinhood Kejriwal's blogs since long, i have utmost respect for this Kejriwal(Rodinhood). Recently there was a lot of hullabaloo happening on this post of him, which definitely attracted my attention ;) For me all the logics/arguments absolutely makes sense. 

And the other thing is that, its just his perception, its his personal view on his personal blog which absolutely makes sense from his point of view. Don't understand why people beat around the bush and still couldn't counter him if they are right? 

We Indians are very emotional(including me :P), especially youth. We want to change things out here. But we don't want to be the change, but we show off, being patriotic towards our country. Trust me even am against corruption. But there were times when i was getting late for work and i took a wrong way(it wasn't more than 10mts), got caught by cops, paid bribe just to save my ass from getting late, for an important meeting  (just to save my job). Why did i do it??? 

For me if i want to fight against corruption, i should change my perception first than paying bribes to anyone or supporting the other Kejriwal(Arvind). 

Just curious to know, how people who put comments against the other Kejriwal(Rodinhood), are contributing to the society? Did they waited in line for hours for something, did they do what they are supposed to(never paid bribes) at least once? Can Arvind Kejriwal be successful and can he ensure that, we Indians don't have to pay a single rupee for bribe?

Paying bribes is in our DNA and it will take ages for us to overcome it, and for now what i see is, what if am not even earning a single rupee? I cant even pay a bribe, which means i cant get my work done isn't it?? 

Entrepreneurship is the answer! Create jobs, make people independent first. Change perception, don't pay bribes and start taking initiative than sitting on a cozy chair in an AC Room and lolling around FB.

I have utmost respect for the other Kejriwal(Arvind) as well, but can he do it all alone? Without our support???( i don't mean attending his fasts in Ram leela Maidan) ???

I don't think so.

Thats all from my end. 

PS: Am not targeting anyone, thats just my perception :P

Permalink Reply by Alok 'Rodinhood' Kejriwal on August 2, 2012 at 2:10pm

Ravi,

Maybe you should prove Wikipedia wrong:

http://en.wikipedia.org/wiki/Gross_domestic_product

Expenditure approach

" All expenditure incurred by individuals during 1 year . "

In economics, most things produced are produced for sale, and sold. Therefore, measuring the total expenditure of money used to buy things is a way of measuring production. This is known as the expenditure method of calculating GDP. Note that if you knit yourself a sweater, it is production but does not get counted as GDP because it is never sold. Sweater-knitting is a small part of the economy, but if one counts some major activities such as child-rearing (generally unpaid) as production, GDP ceases to be an accurate indicator of production. Similarly, if there is a long term shift from non-market provision of services (for example cooking, cleaning, child rearing, do-it yourself repairs) to market provision of services, then this trend toward increased market provision of services may mask a dramatic decrease in actual domestic production, resulting in overly optimistic and inflated reported GDP. This is particularly a problem for economies which have shifted from production economies to service economies.

[edit]Components of GDP by expenditure

GDP (Y) is a sum of Consumption (C), Investment (I), Government Spending (G) and Net Exports (X – M).

Y = C + I + G + (X − M)

Here is a description of each GDP component:

• C (consumption) is normally the largest GDP component in the economy, consisting of private (household final consumption expenditure) in the economy. These personal expenditures fall under one of the following categories: durable goods, non-durable goods, and services. Examples include food, rent, jewelry, gasoline, and medical expenses but does not include the purchase of new housing.
• I (investment) includes, for instance, business investment in equipment, but does not include exchanges of existing assets. Examples include construction of a new mine, purchase of software, or purchase of machinery and equipment for a factory. Spending by households (not government) on new houses is also included in Investment. In contrast to its colloquial meaning, 'Investment' in GDP does not mean purchases of financial products. Buying financial products is classed as 'saving', as opposed to investment. This avoids double-counting: if one buys shares in a company, and the company uses the money received to buy plant, equipment, etc., the amount will be counted toward GDP when the company spends the money on those things; to also count it when one gives it to the company would be to count two times an amount that only corresponds to one group of products. Buying bonds or stocks is a swapping of deeds, a transfer of claims on future production, not directly an expenditure on products.
• G (government spending) is the sum of government expenditures on final goods and services. It includes salaries of public servants, purchase of weapons for the military, and any investment expenditure by a government. It does not include any transfer payments, such as social security or unemployment benefits.
• X (exports) represents gross exports. GDP captures the amount a country produces, including goods and services produced for other nations' consumption, therefore exports are added.
• M (imports) represents gross imports. Imports are subtracted since imported goods will be included in the terms G, I, or C, and must be deducted to avoid counting foreignsupply as domestic.

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Permalink Reply by Aditya Singh on December 29, 2011 at 2:42pm

Some cool thought.

1. Common people face a lot of problem due to everyday corruption at lower level. Not everyone can do a startup. Many people have different priorities and have a lower "risk-apetite". Why should he pay bribe out of the 10k salary he gets.

2. Out of the entire chain above, say 200 goes into taxes (income, service , sales taxes etc). And then comes one single man who takes away so much out of it in some stupid scam. They hired taxis in commonwealth games for like 30k per day out of which sure some 20k would have been gone into some goon's pocket. So entrepreneurs create the wealth for the nation which is destroyed that way.

I am still more concerned about the higher level corruption which is more difficult to deal with. There are already ways to deal with lower level corruption. Moreover, i don't feel like lokpal is really going to solve the problem. Look at the govt. version of the bill.

Ending corruption is like ending black-hat-SEO

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Permalink Reply by Abhishek on December 29, 2011 at 6:12pm

bhai Arvind Sir is thinking of people who are not ready to "start" abey harr koi start karega toh company main akela kaam karega kya.. aur bhai ap kya tech-crunch samajh rahe ho apne aap ko... copy-baaj

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Permalink Reply by Siddharth Sethi on December 29, 2011 at 6:40pm

Alok,

I have always enjoyed reading your blog .Very invigorating , enriching and mostly ,brutally honest.

This is the first time i am wondering "Why would you say that?" .Logical from one dimension but devoid of soul.

Arvind kejriwal has done a few good things ;crusade for RTI etc etc and made a difference.Thinking outside of only "self" is a pretty big picture guy for me .Very delayed gratification for self even if the end objective is political power.Meanwhile some good happens to the society too.Nice mission i would say!

You being a progressive entrepreneur  will do these calculations , that's your filter in life . But he fights for something else i guess.

He is a crusader and a good / bad one (effective nonetheless), maybe because possibly his stint as an insider fills him with angst about the corruption that reeks through.Even if it is ulterior its not hurting me yet!

His angst or his ambition is his fuelandthat drives his agnda.His philosophy is maybe more qualitative than number driven.

We have all felt anger , rage frustration at the hopelessness of our corrupt system and done nothing.Maybe it hasn't hit us more brutally than a bribe here and there.But corruption is much more than a bribe here and a bribe there!Its also a killer walking out free and a doctor peddling spurious drugs. Corruption itself has a huge canvas!

Even if nothing else , he and team made the smug look a little disoriented.

Your calculations are really good but that's your fuel ,not his .

May you add more to the GDP and may he add more to the discomfort to the scum of our society.

We need both and we need them to drive vastly different agendas.

I choose to  not judge harshly the people who have in them to drive difficult agendas and make a difference(Since the are so few)!Power to all Kejriwals:-)

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Permalink Reply by Alok 'Rodinhood' Kejriwal on December 29, 2011 at 6:47pm

very very nice! 

thank u sir

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Permalink Reply by Neerja Singh on May 9, 2013 at 4:12pm

Nicely said!!

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Permalink Reply by Darshan on December 29, 2011 at 7:22pm

Hi Alok,

First of all, very creative attempt to solve the problem at hand than keep beating around the bush. I, however, see a fundamental flaw in your argument. The number Rs. 875 is a notional number, as you are summing the "revenues" while you move down the value chain of your product/service. In effect your model is proving that if our country's earning is Rs. 100 (the revenue generated in your example), then Rs. 87.5 goes in bribe. Note that at each level in the value chain, the REAL earnings are only 10% of the service/product that you sell, so effectively your model depicts that at each level of the value chain, as the money trickles down, 90% goes in the form of bribe, while 10% of the profit or 1% of the revenue remains with the actual producer of the service or goods.

Regards,
Darshan

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