India the two parallels

Everyone knows there are two economies in India one that is on paper and other that is on trust.

I was travelling through busy streets of South Mumbai and then I quickly realised this is very true

The market that surrounds the old building is all cash market, you will not see a single bill given or single document taken. You will probably find all the things you need to survive from clothes to furniture, home decor, bags, Electricals, food items almost everything but most amazing thing is it is all cash business. The estimates of trade done at the market will baffle anybody. When I calculated few figures it was really amazing. Most probably as an assumption 90% of those traders and buyers do not pay tax of any kind so they are really untracked. Such market is existing in every city in India and hence you can calculate the size of this big market. Upcoming malls and stores hardly affect business at these markets. So if you consider the amount of business done by these unorganized businesses and calculate that in GDP then our GDP can increase substantially and also this will reflect in GDP growth numbers.

Tracking these trades is not simple. but government have to do this. one way may be just register them and keep them tax free. This will help to get GDP data which is crucial. We are fighting with competition from other BRIC countries for outside money. Foreign investor look at country’s GDP and health of economy before investing. This will help India and market will be unaffected. May be there are many complications in doing so but we should be giving one thought to it.