Any non-productive activity, which also involves transfer of money through UPI, will also add to the GDP. Activities such as beggars, friends and family members transferring money between themselves using UPI will not have any effect on the economic growth but will show the GDP to be of enormous size.
By Debasish Roy
CEO, Royalle Corporation (www.royalle.in)
When a mother transfers money to her children through UPI for lunch money at school, that gets added to the GDP with no economic activity, creating a false picture of a large GDP with little foundation of jobs and salaries.
GDP being a sum total of transactions is being pushed continuously through hordes of non-value adding transactions through UPI. If a million beggars transfer their begged alms between themselves through UPI, the GDP will grow. If 2 million beggars and two million peons beg or accept bribes through UPI then transfer the earnings through UPI to the higher fellow in the chain, this is repeated say 20 times, the GDP will grow that much without any purposeful economic activity. The same thing happens when construction labour and other unskilled labour sends money home through UPI. When 1.4 billion family members transfer money to each other. Next, contributing to GDP without much of value-adding economic activity is salaries paid to government employees whose number keeps growing. The net result is a false picture of economic growth. We are experiencing jobless growth.
Both formal and recorded informal sector have been shrinking after demonetization and wrongful implementation of GST. Unaccounted sector and cash transactions have been growing. UPI has been growing to push up GDP figures.
Any non-productive activity, which also involves transfer of money through UPI, will also add to the GDP. Activities such as beggars, friends and family members transferring money between themselves using UPI will not have any effect on the economic growth but will show the GDP to be of enormous size. This is not a solution. This way, we shall soon become the world’s largest economy with negligible economic activity producing no jobs and salaries. This is not the way we want to grow. Do we?
