18 PARLIAMENTARIAN l juLy 2019
example of your mother, who converts
fruits and vegetables into squashes
and juices on a regular basis. Or
consider the outputs from services
such as baby-sitting and lawn mowing.
These are never reflected in official
data, nor can there be a reasonable
way to calculate them.
This is why the Brookings paper
stated that the “exclusion of non-
market activities that bear on
economic wellbeing merit more
attention, particularly given the
potential for changes in the
importance of such activities over
time...”One must also remember
another huge gap in the GDP data.
This is the total exclusion of the black,
or gray, markets. In developed
economies, where their sizes are
smaller, they can be reasonably
neglected. But not so in India, where
the illegal economy is estimated at
between 14-62 per cent of the official
GDP. The lower estimate may distort
the overall figures a bit, but if the
higher one is true, it has tremendous
implications. This may entail a
dramatic change in the way we think
about the Indian economy.
Consider how Arun Kumar, an
economist and a leading expert on
black economy, views it: “It (India’s
unofficial economy) is larger than the
income generated by agriculture and
industry.... It is larger than the size of
the Government (Centre plus states)
spending.... Because of its existence,
the country’s economy has been losing
on an average 5 per cent growth
(compared to official figures) since the
1970s.... If we add 5 per cent to the
rate of growth over the past four
decades, the size of our economy
would be Rs 1,050 lakh crore (or about
$15 trillion)....” In effect, we would be
thrice the $5 trillion dream today.
We tend to think of the real
economy in terms of the market
economy – the goods and services thatare deliberately produced every year.
But let’s take a few steps back, and look
around us. As the article on WEF
website stated, “The real economy
includes our natural capital assets – all
of the gifts from nature that we do not
have to produce – and the immensely
valuable, but non-marketed,
ecosystem services those assets
provide. These services include
climate control, water supply, storm
protection, pollination, and
recreation.”Economists feel that such
natural assets “contribute significantlymore to human wellbeing than all of
the world’s GDP combined”. In
essence, the overall global GDP is
more than double of our calculations.
Imagine what will happen to the
economic growths of nations like
India that are endowed with huge
amounts of natural resources and
assets. Sadly, we have overlooked the
benefits, and depleted these assets.
Since 1997, the world has possibly
lost $20 trillion a year in non-
marketed ecosystem services, i.e. an
amount that is larger than the GDP ofeconomy|gdp
Imagine what will happen to the
economic growth of nations like India
that are endowed with huge amounts of
natural resources and assets. Sadly, we have
overlooked the benefits, and
depleted these assets