Dr. Susmit Kumar, Ph.D.

A politician’s job is to win elections, and after winning elections it is duty of his advisors to guide him in running the government. As discussed in my article Modi, the Best PM, India Has Ever Had, but He Needs to Stop Viewing India from the Prism of Gujarat, Mr Modi is the best Prime Minister, India has ever had. I will never doubt his sincerity and zeal to make a difference in the lives of ordinary people in India. But he is not getting good advice on the economic front. As discussed in my aforementioned article, Mr Modi needs to get out of his Gujarat-development mindset to come up with economic policies that would result in job-growth also along with the GDP growth.

As shown in charts 1, 2, 3, 4 and 5 below, the economy of Gujarat displays the same defects as the US economy. As discussed in the December 10, 2017 Hindustan Times news report quoted in Chart 1, despite increasing shares of both manufacturing output in the national economy and productivity, wages are lagging in Gujarat. The average productivity of a worker in a Gujarat factory – 1.8 times the all-India average. But the average factory wages in the state are less than the national average and among the lowest when compared to similarly developed states. On the other hand, Gujarat’s share in national manufacturing output was 18.5% in 2014-15, up from 13.8% in 2000-01. But the state’s share in the national manufacturing workforce, at 10.3%, is proportionately much lower and hasn’t changed much during the period. It indicates that growth was mostly driven by capital-intensive industries that created fewer jobs. India, the second most populous country in the world, needs more and more jobs along with the GDP growth.

As shown in Charts 2 and 3, the US wage as a percent of the GDP is at the lowest since 1940s whereas the corporate profit as percent of the GDP is the highest in the same period, i.e. workers are not benefiting from the increasing corporate profit. Except Chart 1, all other Charts are from my forthcoming book "India is a Country, not a Company - How Anglo-US 'Imported' Economists Misled and Mismanaged the Indian Economy" (out in a month). The book has 66 charts and tables to analyze the Indian, US, Chinese and global economies.

On May 20, 2017, I wrote and sent my 37 page summing up article Niti Aayog: Why does it need new direction and a new leadership? to 200+ personnel at Niti Aayog and to another 100 top bureaucrats in Finance, Ministry of External Affairs, and Commerce & Trade departments. The dispatched comprehensive article contained 14 charts and 7 tables with enough economic data to provide documentary proof of my critical points regarding the ongoing economic mishandling of Niti Aayog. My 37-page article was in fact a charge sheet against the workings of Niti Aayog. Due to extensive data in my paper, it was not possible for Dr Arvind Panagariya, the then Vice-Chairman of Niti Aayog, to defend himself.

After sending the article, I was expecting PMO (Prime Minister’s Office) to ask Dr Panagariya to resign. Instead, within a week of receiving my article Dr Panagariya submitted his resignation to the PM Modi and the PMO accepted his resignation only after two months.

There is no doubt that economists like Dr Panagariya are brilliant people. They know that the defective “Reaganomics”, followed and preached by nearly all US economists, is indeed responsible for the creation of the Frankenstein China and for the bankruptcy of the US, too. As discussed in my article China, US-Based ‘Imported’ Economists and Bhisma Pitamah of Mahabharat, the US-based Indian-origin economists and management gurus are like the “Bhisma Pitamah of Mahabharat”, i.e. they will preach and implement the bogus theory “Reaganomics”. The fact that the PMO did not accept Dr Panagariya’s resignation for two months shows that Mr Modi’s advisors at the PMO are lacking in understanding of the fundamentals of the global economy and of the US economy in particular.

PM Modi and his advisors visit the East Coast (location of major financial firms) and West Coast (location of major IT firms) of the US and see money everywhere. They need to visit Midwest or the Rust Belt of the US to see how “Reaganomics” has devastated the US economy. Then only they will find out why Americans elected an African American with a Muslim middle name, i.e. Barack ‘Hussein’ Obama as President not once but twice and then a known white supremacist, racist, serial liar and misogynist who had never hold any elected position, in the 2016 US Presidential election, over the Wall Street favorite Hillary Clinton. Trump won mainly due to getting votes in the US Rust Belt (Midwest) where people voted for him on just one hope that despite being not a perfect person, Trump might bring back the factory jobs, lost to foreign countries, in the recent three decades and more. It is worth to note that both Obama and Trump won all the Midwest states.

Chart 1. Rise in productivity, but low wage in Gujarat (Source: Has the ‘Gujarat Model’ failed the smartphone generation?, Rajesh Mahapatra, Hindustan Times, Dec 10, 2017)

 

 

Chart 2. US Corporate Profit as Percent of GDP (Chart 15.2 Page 76 from Dr Susmit Kumar’s forthcoming book "India is a Country, not a Company - How Anglo-US 'Imported' Economists Misled and Mismanaged the Indian Economy")

 

 

Chart 3. US Wage as Percent of GDP (Chart 15.3 Page 77 from Dr Susmit Kumar’s forthcoming book "India is a Country, not a Company - How Anglo-US 'Imported' Economists Misled and Mismanaged the Indian Economy")

 

Chart 4. US Job Growth Since 1940s (Chart 16.2 Page 87 from Dr Susmit Kumar’s forthcoming book "India is a Country, not a Company - How Anglo-US 'Imported' Economists Misled and Mismanaged the Indian Economy")

 

Chart 5. US Manufacturing Jobs Since 1980 (Chart 16.1 Page 87 from Dr Susmit Kumar’s forthcoming book "India is a Country, not a Company - How Anglo-US 'Imported' Economists Misled and Mismanaged the Indian Economy")

 

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