'India’s GDP Is All Wrong, Says Hotmail's Sabeer Bhatia, Calls For Rethinking Work Ethic; Here's What He Said

“India’s GDP is all wrong,” Bhatia argued, criticising the current system for rewarding the movement of money instead of measuring actual productive output

The solution for India is simple: everyone should be on an hourly system, Bhatia said

Source : LinkedIn

India’s GDP may be on an upward trajectory, but Hotmail co-founder Sabeer Bhatia believes it’s not capturing the nation’s real progress. Speaking on a recent podcast, Bhatia criticised the way India measures economic growth, arguing that current metrics focus too heavily on financial transactions rather than real, productive effort.

According to him, GDP figures often paint a misleading picture by counting the flow of money, not the value of actual work being done. His proposed solution? Shift the focus from monetary exchange to measuring hours of human effort—a metric he believes would provide a more accurate reflection of the country’s development.

“India’s GDP is all wrong,” Bhatia said, criticising the current system for rewarding the movement of money instead of measuring actual productive output.

He explained, “In India, if I give you Rs 1,000, 18 per cent GST is taxed on it, and you give back Rs 1,000 to me, 18 per cent is counted as Rs 2,000 of GDP. You’ve done no work. I have done no work. I’ve just given you money. Giving money is not work. Correct work is work.”

Bhatia contrasted this with the U.S. model, where economic value is linked to the time spent working and the results of that effort. “Everybody has an hourly rate. Everybody figures out how many hours of effort you put in, and you report that to the government, and you pay a certain amount of tax, and that determines your GDP,” he said.

GDP liked With Productivity 

To better align India’s economic measurements with actual productivity, Bhatia proposed an hourly-based system that would standardise rates across various professions—from laborers to lawyers to doctors—and evaluate output based on time spent working.

The solution for India is simple: everyone should be on an hourly system, Bhatia said. He suggests that India needs to measure how many hours of effort people are truly putting into their work. “Hours of effort lead to progress, not transactions. Only when you put in effort do you get a positive outcome,” he noted.

He added that such a system could not only improve transparency in taxation but also instill a stronger sense of contribution among workers, especially younger generations.

“Put everybody on a contract. A contract is what? A promise with yourself. You will self-report. You will do this and help you be honest in your reporting. Simple. Use AI. Massively use,” the Hotmail co-founder said.