Thursday, August 20, 2015

Journalist Belittles 10-Billion-Rupee Economy

So our Rs10 billion 1982-economy would be about the size of some companies in the latest Top 100 list? And that would be proof that the economy was not going well at all? Or? One problem with this argument is that we're talking about 1982 rupees here. If we assume that average inflation has been about 5% since then Rs10 billion in 1982 would now be worth about Rs50 billion. Assume that inflation has been 7% instead and you get a Rs93 billion economy in aaj ki paisa. Which is three times more than the turnover of the current leader of the Top 100 companies.

16% unemployment is also not so bad given the devastating effects of cyclones in the 1970s -- Claudette for instance sent Mauritius into a depression -- and that we were a left-for-dead country.


Anonymous said...

1 billion dollar economy in 1982 vs a 12 billion dollar economy in 2015, not bad at all. As for the top 100 companies, MCB capitalisation alone in 2015 is Rs 50 guess how much an investor in the MCB in 1982 would have made in 2015? May be some of the ponzi swindlers would have been better inspired to invest in MCB stocks.

Sanjay Jagatsingh said...

Rs50 billion is still about 1/2 what a Rs10 billion economy in 1982 would be worth today if inflation had averaged 7%. It doesn't make sense to invest in only one stock: it's a lot better to spread your risks.

We should also have a good look at the evolution of the economy and the type of problems that were solved between 1968 and 1982 and even before that. Guess there is a big need to have a disinterested analysis of these periods.