Abhijit Banerjee On Indias Economy Poverty Gdp Ai

TITLE: qt2XslRMOto CHANNEL: Unknown DATE: ---TRANSCRIPT--- You don’t take GDP very seriously.

I don’t take it very seriously because I know a little bit about what goes into that sausage. I don’t have a much faith in those numbers. Abijit Banerjee, Nobel laurate, author, economist [music] and co-founder of JAL has spent decades studying poverty, inequality and economic development across the world. So we are sixth largest economy and yet we have one of the world’s most poorest population in the country. How both of the things are true at the same time? We have a gigantic economy but we have an even more gigantic population. So once you do the division you get to where the real meat is. So are we getting richer or poorer? Then the question is more who’s getting richer and there some people are getting richer and richer and richer. What do you call middle class? Give me some bottom range. People who make over 30 35,000 a month all the way up to people who make two lakhs a month. recently China is trying to do in the world of AI and jobs. It’s going to be illegal to replace and cut human beings. Do you think that’s the right thing to do? Yeah, I think so. Some job can be done much better. You should let technology do that. But I think if it’s only 5% better, it’s not clear that the social cost is worth it. Would you believe in the stats and data that we have that middle class salaries has been flat over two three decades now? It’s not increasing at all. What that means is that why only rich are getting richer in India? You said that you would explain Indian economics with the help of a pressure cooker. It has something to do with two things. Before we start today’s podcast, if you have found anything valuable from this channel, please subscribe. It’s free. It takes less than a minute, but it means a lot to us. And to listen to the audio experience of this episode, please follow us on Spotify. I use her logistics need solution twoheers and mover services available. Porter is a trusted affordable app logistics need to know more about our title sponsor Porter and their services. Check the link in the description. [music] Why only rich are getting richer in India? [gasps] I think there’s several uh pieces to that as you will notice we there are certain global products which everybody wants and call them call [clears throat] them iPhone call them Prada you know whatever call them uh chat GPT but if you own those and those products are all basically the production cost is very little once you produce them. It’s just the intellectual property. You know the Prada’s Kapuri cost the same 600 rupees or whatever that any Kapuri costs and then they sell it for 6,000 or whatever. So you know it’s it’s probably 60,000 60,000. I don’t I I’m the last person who’s going to buy a Kapuri from Prada. So it’s not it’s not I haven’t bothered to find out the price but in any case. So the point is that it’s not the cost. Therefore if you happen to have the intellectual property to the thing that people want it’s infinitely scalable. You can keep selling it to more people and you don’t run out of it because it’s the cost of producing it is very very little. So therefore, you know, the that’s sort of the argument we make in our, you know, 2019 book, Good Economics for Hard Times. We make the argument that we’re in a world of massive increasing returns. And so those people who happen to have the techn technologies where the where there is demand are going to become vastly rich. and the rest of the people there is really very little uh that you can do to compete against that. So you are going to be you can’t really get there. In fact now AI is doing something else and you’ve been it’s been happening for a while if you you know there is this whole even [snorts] in India the business press even recognizes that middle class salaries have not been rising. M this has been written about by people in the business press you know software salaries are flat this and that and that’s because partly you know the code writing is increasingly automated you know you can I mean Claude can write much better code than I can so therefore why would I do it and that means that there’s a lot of jobs that used to be well-paid jobs in India which are kind of disappearing. And so if you look at the data uh on the income distribution, the rich in the income distribution that are the data that we collect is totally leaves out the really rich they’re you can’t get to their apartments because their Dhwan sends you away. So therefore the only people rich in those are actually the middle class and those people are actually losing ground even in the national sample survey relative to the poor who are getting you know who are doing construction jobs or this or that the there wage is rising not fast but is rising somewhat. The wages of the software engineers is flat and so in fact uh in the data it looks like inequality is falling. Now that’s to me I I’m my guess would be that’s false because we really have no data on the rich and they just there is none. I mean there’s t there used to be tax data many years ago. Thomas Piketti and I used the tax data to show that a big part of the gap between uh the kind of income from the national sample survey and income from the you know the the GN the national product is the gap can be explained by the exclusion of the rich but you are you saying that middle class is feeling poorer just because there are no good jobs left. There are fewer and fewer good jobs and that’s that’s true globally. I mean it’s not it’s it’s not something that’s uh easily fixed because of you know a lot of the Indian middle class were in the service industry and so unless you are a I mean there are jobs that are clearly going to actually uh you know there’ll be demand more demand for it like being a health care professional is going to still be good. because I think AI will help with healthare but I think eventually we have an aging population increasingly and demand for healthcare will go up. So I I do do think that healthcare will be fine teaching will be fine. I think I mean though eventually I think some of the lecture will be replaced by but I still think that you know there’ll be a lot of complimentary activity explaining the lecture and all that even if it’s online lecture but I think uh other jobs like for example being an accountant [gasps] AI is so much better at accounting than anybody you know uh and it’s just or being a you know a low-level animator or any of these kinds of jobs which are kind of reasonably high skill jobs. It’s not that they are, you know, you have to learn how to do it. Yeah. But it’s just AI is so much better at those things. So I I’m I’m pessimistic about that class of jobs being, you know, so people need to move out and into maybe podcasting, some creative sector maybe. But what do you call middle class? Give me give me some income range [sighs and gasps] [snorts] you know in India. Yeah. So I would say uh people who make maybe over 30 35,000 a month all the way up to people who make um you know one one and a half two lakhs a month even more actually maybe these days three lakhs three lakhs yeah that’s that that range okay so 30,000 to three lakh like you would call it middle class. Yeah. 30,000 is really the bottom. And specifically if you talk about tech jobs, it’s like 18,000 or maybe lesser than that. Yeah. Yeah. So it’s it’s 30,000 is a reasonable benchmark for a a middle class uh job and then maybe the top end of that is you know three lakhs or something. Yeah. And would you would you believe in the stats and data that we have that middle class salaries which is 30,000 to three lakh has been flat over two three decades now it’s not increasing at all. What that means is that in inflation adjusted the salaries are actually fallen for many many many of these groups their inflation has been not huge but still over 10 years there’s been substantial inflation. But why do you think this is happening? Because the top talent CEO salaries has been increasing and it’s gone over the roof. But the middle class salaries have stayed flat and probably fallen if you adjusted with inflation. A lot of these jobs were at some point these were jobs that there was no substitute for and increasingly technology is substituting for those jobs. So it’s not it’s it’s a it’s a relatively simple point which is but shouldn’t company in the companies where people are making a lot of money or probably these companies which are global product they are profiting a lot and making a lot of money the salaries should rise there this interesting use of the word should there I would agree with you but it’s a very specific moral view of the of the of the company the company takes the view that if I can replace this I and get AI to do it for less, I’m going to do it. It’s it’s is the problem with, you know, the market is that it it has its own logic and unless you actually actively resist it and there is let me say that it’s not true that the whole world works the same way. in Germany or in you know Denmark the highest and lowest salaries are the band is relatively small within a a company or in Sweden or even in France though it’s a little bit higher but the you know not the not the entrepreneurs but the the CEO is often paid maybe 10 times what the lowest employees paid in India you can can make that division and in the US as well. So there is some labor markets are much more normed much more you know there is a expectation that you don’t cross a certain ratio and the US used to have that till the 70s and since then you know the ratio of the CEO I mean you think of Elon Musk getting paid $54 billion okay I I’m not making that number up and so 54 billion. So a billion is a a million times a thousand. So 54,000 is if somebody gets paid which is a very good salary for a you know lowkilled employee probably they don’t get it. They probably get 27 not 54. That’s a million times more. I’m not I’m not you know I’m I’m just giving you some you know kind of a benchmark example but but the fact that that’s considered acceptable socially that’s a problem to me that’s somehow that’s a that’s respecting the market way too much to say that you know if I can get it why shouldn’t I is is a level of cynicism which estab which eventually undermines the social equal equilibrium. [snorts] Do you saw what recently China is trying to do in the world of AI and jobs? They are saying that it’s going to be illegal to replace and cut human beings because of AI jobs. Do you think that’s the right thing to do? Yeah, I think so. I mean the Chinese it should be illegal to cut people off because AI can be more effective than humans. The question is what would the human do? You know in the end one thing to realize is that when somebody uh somebody uh gets fired in a state maybe in India we don’t do much for them but if you take a state which is more [snorts] welfareist China is more welfareist than we are they are more conscious of unemployment being a social problem it becomes state’s liability the state pays for those people to somehow to survive to transition to another job. It’s not it’s not free. It’s it’s it’s money that comes out of somewhere that’s paying for those people. And so you could so I I think there is a legitimate uh ground to say that if I can increase my profit by 5% by firing somebody but I ruin somebody’s life then there is some some value attached to uh that uh choice that should be taken into account that there’s some social uh concern that uh is reflected in uh the fact that this is somebody who will have very you know who had um have has children who go to school who who have hard time you know rather suddenly even if he can get a job somewhere else to move and to cut his standard of living and to sell his car and you know move out of his apartment all of these things are extremely costly and emotionally costly but also economically costly that he have to take his children out of the the good school they go to and put them into a whatever a corporation school. I mean all of those choices are are have social costs and so the idea that this is this is just the market’s logic which you seem to be implying seems to be to be uh missing the fact that there’s no justice in in the market. It’s just somebody got lucky and got a better technology and therefore I’m screwed and and there’s costs being impo imposed on people. So I I don’t know you you can obviously have a different view. Elon Musk surely has a different view but I I’m not going to take that view. But do you think then you should continue working with employees who are ineffective and inefficient with the growing technologies of the world? The question is what is what is what does that sentence mean? So inefficient yes maybe maybe if some job can be done much better uh you should let technology do that but I think if it’s only 5% better it’s not clear that the social cost is worth it and second I think the society has an obligation to think about well then what will this person do I think one day we’re going to face this problem in droves that there will be people extremely angry because they have nothing to do. If you think of what happened in the US, why there is so much support for Trump, it’s because there are places where people had jobs, they had stable living and then uh Chinese imports came in and took those jobs away and they have they they were 53 or 57 or 46 and it’s very hard at that age to move because you know you are you’re not fresh out of the your of college or something and you have your you have your social network, you have your friends, you have your your you goes to school, your uh you are the coach of the local baseball team. I mean whatever you know this this is kind of person and they they suddenly realize their life is no longer viable. they have to move somewhere and live with their 80year-old parents because they don’t have a living and so they’re extremely angry. One thing that you see in the US is reason why I think Trump is popular with a certain group is because he articulates that anger. It’s a huge amount of anger. So I I think eventually you can you can treat people like they are you know whatever machines but they’re not the machines don’t get angry and I think we need to take that into account. India is sixth largest economy in the world. Actually, we’ve fallen down to sixth now. It’s a bit about it’s not these are very they’re very fragile things because the rupee goes down because there’s a war in the Gulf and are we suddenly much poorer or not? It depends very much on you know too many factors that have no real meaning. So true. But so so we are sixth in the world, sixth largest economy and yet we have one of the world’s most poorest population in the country. How both of the things are true at the same time? So one thing to say is I I this this whole I I find this rather I know I think there are reasons to maybe sometimes talk about the size of the economy especially if we are talking about you know what happens to the global economy if India suddenly slows down then the size of India matters but for poverty what matters is per capita income and we’re still very poor per capita income because it’s not we we have a gigantic economy. We have but we have an even more gigantic population. So once you do the division you you get to where where the the real meat is. But so are we getting richer or poorer then? We’ve been getting richer. I I don’t think that I think the question is more what you asked right at the beginning which is who’s getting richer and there some people are getting richer and richer and richer. I I go to the sometimes to a restaurant expensive restaurant in India and it’s like you can’t get in. There’s so many people who can spend you know 5,000 rupees per head uh without a thought and then there are people who can’t spend 5,000 rupees in a month you know but it’s not that you see the yeah you you know what I’m talking about yeah and but what do you think is the biggest thing then which economists politicians or all the experts are probably fundamentally getting wrong about India’s poor. I don’t think they’re getting it wrong. I I I mean I think there are kind of very politically motivated uh kind of people claiming there are there is no poverty in India. But I I think if you know I spend a fair amount of time traveling in rural India. So I have a relatively firsthand view of of this. I would say that’s a you know I was in in December I was in northern you know northern Maharashtra in the tribal belt and you know see what the houses are like I mean it’s I’m not saying that things haven’t improved things have improved you can or but if you look in in Mumbai the jobies are still there you you come into and suddenly there is this set of complete completely falling down little I mean I think we we are a little bit I mean other than people who have very specific political motivations is hard to imagine anyone not recognizing that there’s a fair amount of poverty left in India that’s not to say that things haven’t improved things have improved vastly since in my lifetime vastly I I you know the poverty I saw when I again I was as a teenager I spent a fair amount of I’m in villages and you know in in Jarkand or something and there the poverty was nobody had a had a you know there were people wore you know one doti and maybe had had a had a gamcha to put around their shoulders but that was it but it was really there was a dire poverty. What has changed about poverty and rich poor gap? I think the rich poor gap has has you know the rich have got richer relative to the poor. [gasps] But the government has also you know our fraction the fraction of of uh income that the government gets has gone up. GST has increased uh the government share. Now that’s that a lot of that money money is coming from middle class people who are spending. It’s not that they’re coming from the rich. I mean GST is a very you know it’s kind of everybody pays GST. It’s not that you know Amani pays the same GST as the poorest person more or less you know some brackets and this and that but yeah so therefore it’s not uh but still that money means that the for the poorest people the government is able to redistribute and there is more redistribution uh now than there was before and you know and the you then narga wages are higher and and you know the jobs in construction. [snorts] You know, now you I I’ve been actually a couple of uh not last summer but the summer before that I spent a lot of time interviewing construction workers in Delhi and Hyderabad and and they were getting paid you know depending on your skill level 5,000 500 a day or 350 a day but not not 50 a day. So I mean there is there is clearly and if you paid 50 a day you wouldn’t get anybody they would stay in the village and get narga. So you know there is there is an effect of if you can make you know some reasonable amount of money in the village why would you move to the city unless you paid substantially more. So I think there is a push pressure from the bottom and that that has meant that the earning you know nobody’s making the kind of salaries that people were making uh even 20 years ago. So that has changed like people are making at the bottom people are making more money. Yeah. And I think that’s result of policy. I think the fact that now for example if you live in a village uh and you are classified in the you the bottom 75% of the economy you get PDS you get food subsidies and so you know survival is possible if you live in your village and you have a uh you have a Russian card you can live off that it’s not a it’s not that it’s uh it’s not wonderful I don’t want to [clears throat] glamorize poverty in any way. I find it reprehensible. But I still think that things are better now. So coming back to your professor mode a little bit. Okay. Which is because we started that way and you said you you can teach it basic terms as well. So first teach me on let’s say a white board or like a white paper if I have to just put it out for you. Mhm. What is RCT like? How what what is this thing? How would you explain it to me if I don’t know anything about it? Why did you win Noel for it? Okay. So going to so imagine that you want to know whether um you know having computers in school is uh these are uh different schools and these in these schools there are um you [clears throat] know some some of these have computers some of these don’t and let’s say these are the ones have that have computers and these other ones don’t okay what What would your guess be be about the performance of the children in these schools versus these schools? They’ll perform better because they have computers or because they are in schools that can afford computers. Their parents are richer. Their parents have can hire tutors. they parents have access to you know online classes and and you they can so everything is correlated here. So what our RCT does is it says I want to if I want to study the effect of computers on children’s learning I need to first thing I need to do is I need to be compare like with like I I can’t compare the schools you know the Ammani school with the Bombay Municipal Corporation schools for a million reasons not just because they have computers so therefore what I should do is I should do an experiment where I give random randomly choose schools. So maybe I’ll choose this one and then I’ll randomly choose this one and this one and I’ll give them computers and I’ll leave the rest without the computer and then I’m going to then these are comparable because I chose them without any I blinded myself and picked them out of a hat. So I’ have no there’s no systematic bias. So then I can compare them and say that well is it really true that learning is higher in the schools that have computers than the ones that don’t. Yeah. So that’s that’s the extremely basic idea. Then of course there’s a lot of technique and and statistical uh nuance that you have to deal with. But if you want to the basic idea is exactly this idea that if you just compare naively you get biased biased outcomes. You you say that the children in a money school are you know they learn better because they have computers but in fact you know that it’s not true. So this is this is what we are guarding against. M [clears throat] and what is a what is what could be one statistical nuance which is so so for example uh suppose I you know I chose these four schools to have computers okay m but only three of them actually got the computers the the computer delivery to this one failed what do I do in that situation does the experiment have to fail or can I is there a way to deal with that nuance. And the answer is if I choose, if I say that I’m going to compare the schools that were originally assigned to have computers with the schools that were assigned not to have computers, that’s still a valid comparison. I know that’s not all of them got it, but I can scale by that. So that’s that’s a statistical nuance if you like. Got it. Got it. And what if you have to explain me in this way? What would be economics for you? How would you explain economics? Economics takes very seriously the idea that people you have to understand people’s motivations in interpreting the effect of anything. So if I if I want to look at what happens in a particular situation then I can either say people have you know they are from this cast and therefore they be behave in this way or I can say that but the world is always changing and they’re also looking at other opportunities and therefore I need to understand how people’s behavior interacts with the market situation or the institutional citiz is and economics takes that second step very seriously that individual choice and collective outcomes are related not in a mechanical way they’re not rec just because you know I am from a particular cast I won’t do a certain behavior I’ll do what I do also depends on you know what government programs are available what kind of schools are available what kinds of what is the macroeconomic situation can I borrow easily or not all of these things matter. So you can always take the fact that people are inside this complex of you know related uh but distinct institutional movements and make active choices they take that very seriously. So I would say that’s what makes economics a very distinct way of thinking about about anything. So when I think about uh the the computer in the school, I go to go back to that example, I naturally ask why is it that these schools have computers and those schools don’t and so and then I I have a theory of that which makes me suspicious of comparing them. Why am I suspicious? them suspicious because I I know that these schools probably don’t have a computer just randomly. they probably have a computer because their parents are rich or you know they were they the government is particularly focusing on these schools or some there’s some particular privileges there privileges there so that asking that question is what makes me an economist that I’m I’m very much interested in the underlying causal mechanisms that that cause these differences and that allows me to then think of what’s the right experiment [snorts] Interesting. And then you you said on the briefing call that you would explain Indian economics with the help of a pressure cooker. Pressure cooker is a good example of something that’s [snorts] it’s a technology we use a lot more in India than in most of the world. It’s really and Indians have adopted this technology even though it’s actually a very interesting technology is the fact that pressure raises the boiling point and therefore uh it allows things to cook much faster is a tech is an idea that has been around for a while but still if you look in a regular US household they wouldn’t have a pressure cooker till [snorts] 20 years ago when when in some sense the Insta Pot which is actually a pressure cooker was introduced but even then there wasn’t insupport went out of business actually it’s not vastly popular and it has something to do with two things one is our lifestyle that we make slowcooked uh what were traditionally slowcooked like dal and you know we need to melt things we we relatively unusual in the US or in Germany or something the second thing is that we we have we are poor and we are very especially we are an energy poor country. We we are always conscious of the fact that energy prices we are very sensitive to global energy prices. So we are always going to be um you know worrying about uh can I afford to cook this you know this uh this dal but it’s going to be this chana will take a long time to boil so should I do it and what what a pressure cooker does is it makes that much more energy efficient so it it goes very the the pressure cooker is a very good example of where preferences and the market interact act to define a particular style of cooking which is very Indian. You know in Indian you look you read a recipe they’ll always say you put it in a pressure cooker you wait till three three whistles and then you’re done. That’s you you try finding that in a Chinese recipe or a or a Spanish recipe. It just doesn’t exist. So it it is very much that the fact that that’s there is a is a very interesting interaction of energy prices, poverty and taste. Yeah. But so pressure cooker became popular just because of energy efficiency in the country. We had used to have something called cooker before the pressure cooker which was a I think I haven’t actually I’m actually not old enough to have use used one or seen one but I think they were there was a prior thing where they would at least cook uh and I’ve seen that as a child I saw that when you cook rice you put in in a little daba inside the rice you put some sabzi So that when the rice cooks the same heat cooks the subzi and uh and so that that idea is I think the cooker basically was a way of using that structure. So there was there’s all all this thinking about how to economize on energy and this has been a while I mean I’m saying last 100 years we’ve been mikp cooker goes back to uh the 1930s or something. So I I think these things were eikmic comes from economic by the way just to it’s exactly this idea that it was a economic way to cook and what has what these things has to do with economics. So one of the samosa ladu chips and mitai and mitai. So one thing that one idea that I think is very um prevalent even in our policy conversations in India I mostly say unfortunately is being judgmental about the poor and you hear this a lot. you said that you know she was uh she has no money but she go she’s always eating samosas or something or having chai and uh and I always thought that’s backwards that what you know in some sense because we have such fulfilling lives we we are able to it’s much easier to resist temptations when you have fulfilled lives It’s easy to be disciplined when I know that I’m I’m getting lots of rewards. When you think your life is a bit dreary, you know, you you clean people’s dishes. You know, some pleasure needs to there has to be some space for pleasure. [snorts] Otherwise, life isn’t worth living. And so, I think fundamentally these chips why is why are chips popular? just popular because you know they’re very they’re very easy to transport. They’re available if you go to a village in I don’t know in rural Udaur district. Okay. [snorts] Which is you know once you get out of Udaur and you go 50 kilometers you are in the middle of nowhere. Yeah. I I spent lots of time in those places. Uh so and in those villages you’ll get parlay and you’ll get a bag of chips. These are durable. So they’re things that are easy to [snorts] uh you know they they provide a certain amount of quick satisfaction. They’re cheap to transport. So cheap therefore they stay cheap. If you if you try to provide uh you know uh this bury there that would be much more expensive. Burfeies don’t travel well. So you want to so there’s a logic to why these things are available which is for poor people they want something a little bit different ro they eat uh you know um whatever makai koti and some sabzi and and it gets uh gets tedious and especially children I think it’s the children often say this is this is I had that every day so mother then says her father then says cho I’ll get you a bag of chips. I think those are those are very important for survival. So you know if you don’t and in that sense I I am very much against being judgmental about what what poor people do. I think they have a hard enough life without us criticizing them. True. True. So it’s so they usually consume more chips and more samosas because of indulgent pleasure. I think not more because of course we can afford anything but for them it’s very much more important and it’s like a short escape for them. Yes. And what’s what’s with ladu and matai? The same ladu and mai. I’m just saying it’s much more expensive. It’s much more expensive. So it’s much bigger treat. They might actually give it to the god. So you know you’ll buy one mai and you give it to the god and then you share it among your family. You know then you have done some you know you got some puna and you also got some mitai and what if you wrote something about this somewhere [clears throat] [laughter] it’s a good one that’s a nice one why is guava so [laughter] exactly what is in guava so guava turns out has um a very is a very good source of bioaccessible iron. So the problem with iron is partly that many things have iron but they’re not very bioaccessible meaning uh they don’t even if your body gets it it it expels it basically so you you don’t actually absorb the iron. The advantage of Guava is it has it’s a very good source of bioaccessible iron and we have a huge anemia problem. We are like with a few other countries we are kind of the where the anemia in the world is concentrated and so it was the guava is was it was more that it was a example of some very simple thing we can do to help with with with uh with with this anemia issue that there is is not a matter and how how anemia issue and guava and economics it’s related Well, anemia is a huge productivity issue. There’s evidence showing that, you know, anemic people are 20% less productive. Okay. So, big gains from anemia. Solving anemia. So, that’s one part of the economics. Economics productivity is like, you know, if you read the business press, it’s like number one issue. No. So there’s no nothing so surprising about uh and the second thing is [snorts] I think that’s what goes back to what I said before about understanding behavior. So what’s nice about guava is available everywhere. It’s really like one of these things that grows in most villages. You don’t have to it’s not a and it’s tasty and so people are willing to eat it without really you don’t have to it’s not a you know that this special sag that you have to eat and or this loo that has made with with this and that and the other is much more difficult to to implement when it’s something that people intrinsically don’t but if a guava if you tell people that yeah eat more guavas because this is still easy and I think that’s the connection with what I was saying with the economics which is understanding what behavioral how do we deal with that people have certain behavioral patterns and they will if you give them a very difficult challenge you know you have to go to the city and buy this thing and regularly eat it some will do it but a lot won’t but if you say g Um perhaps a lot more people will do it. True. And why will earnings will go 15% up? Because anemia just undermines work. Enemia you just your body doesn’t absorb oxygen so you get tired. It’s very simple. uh iron is you know hemoglobin is related to iron and if the body doesn’t you don’t have enough iron you get tired faster it’s it’s very there’s lots of studies of that got it and what is an est trap curve of a poverty curve so this the [laughter] nice nice um so think about um somebody okay who has um extremely low income. When you have extremely low income, you’re you you’re um you know, you’re tired all the time. just we talked about anemia but even just not having enough calories means you’re tired if you and or I give you maybe a more an example I believe more suppose you you you want to start a business but [snorts] you know a business where you have a shop you maybe you can have a shop a lot of if you go to slums all over in India you see that there are lots of shops People basically take part of their front room and put a wall and put a shelf and then they put some stuff on it and so you you are Kiran little Kiran typical absolutely [gasps] but maybe you can do all that without a lot of capital but if you don’t have any capital you can’t put anything on the shelves and then nobody’s going to come to your shop is a waste of time. [snorts] So that means that the productivity of your investment actually goes up very fast as you get more and more investment. Okay. So what the idea of the S shape is that when you’re very poor going from being able to stock two packets of biscuits to six packet of biscuits is still pointless. Nobody’s come come to your shop for the six packets of biscuits. But if you go go to you know biscuits plus uh you know some other chips per mixture plus uh you know other tooth toothbrush plus toothpaste plus shampoo then people will come. So the return to capital is steeply increasing for a while. you you have more capital, you can just your shop you have a shop, but your shop is worthless till you have enough. So that’s the idea of a of an S shape is that for a while at at the at the if you think of the left tail of the of the S, you know, a little bit more and a little bit more and a little bit more doesn’t do much. So you know give a lot you have to get a substantial amount before the the business really flourishes because till then it’s you know nobody’s going to come to your shop for to see if you have the fourth packet of biscuit but they will come if you have many things and you know it’s attractive and when I get there I’m going to uh think of what I’m going to buy but it’s it’s a nice attractive shop. So it’s very much this idea that that’s that as we get further up the S S kind of goes up steeply for a while and so that’s if you make more investments you get for a while the returns and of course then at some point if you have a [snorts] small store there’s no point investing more so then it becomes the top of the S where it kind of flattens off. So you’re saying that if you have to get someone someone out of poverty, giving them small amount of money probably every quarter or every year is not going to make significant difference. Giving them one short lump sum money is going to make the difference. Yeah. I did an experiment in Kenya. Mhm. um where people got either you know uh I guess monthly small amount of money or they got all of that at the beginning. So then this both of this continued for for so I I’ll actually say it in two steps. So this continued for so the monthly small amounts of money continued for 2 years. Mhm. The lump sum that they got was equivalent to that 2-year amount. Okay. What was it like? What was the monthly? Uh it was I think it was so 83 cents uh day in but at Kenyan real exchange rate. So the amount it’s be like a monthly in dollar terms. Um would it be I it would be something like um maybe 8 $89 a month. A month. A month. Okay. So like $800 rupees. Yeah. Somewhere around that a month. A month into 24. into 24 or or the equivalent in in um one lump lump sum one lump sum and you see that the lump sum generates many many many more businesses than the so this is a randomized control trial uh some villages got this you know small amount some people what’s more remarkable is that some people were given a promise that they will get that small amount for 12 years. M and the lump sum was only for the value of two years and it still generated more businesses than than the the 12 year amount. Why? Because people exactly what you say you know what will people you know you give them small amounts they’ll never be able to either they are very disciplined and they save up and save up and save up or there’s no way to turn it into a business. So they buy whatever you know they repair uh they smell spend it in whatever way that’s u makes sense for them but assuming they it’s very hard for them to build a business whereas you give them a lump sum they know that this money will go if they don’t turn it into a business they turn it into a business but then does it has it ever happened that if you give lumpsum money to somebody for no reason just for free they end up missing using it. Sure, some people will, but the the I think the most striking fact is that, you know, you don’t we you don’t really see there’s lots of studies of this of people getting lump sums or getting, you know, free money of some kind and there’s no evidence that it generates more uh laziness or more drinking or all the things that people imply. There’s evidence on all of them and none of them happen. But you you’ve junked this theory, right? I’ve junked it for years and is and the evidence keep mounting that it’s not true. Tell me, explain me if somebody’s hearing this for the first time, why do you think or believe that giving free money to people or giving freebies to a lot of poor people is not making them lazy. It’s actually good for them. Yes, it’s good for them. In fact, there is it’s not ruining them. Yes, there is a study u before us was shut down uh they did a a metaanalysis which is like when you combine 140 different studies and looked at the effect of that on work and they found that people who get freebies let’s use the popular word uh work slightly more not much more but slightly more not less the important Important thing is that they don’t work less, they work more. And that’s what we found also when you give people in all of these studies, there was no evidence, you know, that they work less. Why? Why? Because I think we misunderstand what motivates work. I think being depressed and thinking that your life is basically it sucks is not a way to get people enthusiastic about working. when you give them an opportunity they say that look you know you can do now you can have a better life maybe they they are more enthusiastic about trying things I I think we just don’t but do they not get used to that hey because I’m getting things for free I should just be this I give you an example in West Bengal we did a study now 7 18 years ago 19 years ago um There were women who were extremely poor. So poor that the poor people in the villages we asked them who’s poor in your village and they would say those people are poor. So we did a mapping and we f they identified the poor. So these were people who the very poor people who live in West Bengal villages all thought were poor. M they were given an asset given usually you know some got cows some got goats some got some trinket to sell in in the local villages they they could choose they chose whatever they wanted and then they were given some handholding they were to somebody from the organization came and said yes yes yes uh you can do it uh and that went on for a year. [snorts] We now look at them 17 years later. We have data for them 17 years after. So we following them 17 years after the people who got that asset are 40% richer. They’re still richer. It’s not that they and this asset was given to them once. Remember that’s why I’m it connects to your question. They were given the asset in 2007. Okay. 2024. And we see that they are 40% richer. Their consumption is higher. Their their income is higher. Their you know their children are doing other things. You know their lives are transformed. It’s more that I think people underestimate how hard it is for it’s not that everybody does that. Of course some people you know whatever their their mental illness. Yes. I mean there are lots of reasons why people not everybody will do it. Yeah. They’ll get drinking problems. They’ll get some stuff but that’s going to be very small. But it on average the effects are dramatically positive. I mean they are why do you think is that like why do you think actually there are two questions to this? Okay. One is why do you think people who have been given free cows or free business opportunity or free money to start something uh why do why are they more motivated and eventually in 10 12 15 years they do better rather than just getting addicted to the free money or free stuff and misusing it. That’s the first question. And then second is if there is enough evidence that people who have been given freebies they do better. Why do a large section of society believes that they’ll get addicted to free money and be lazy and then giving money is not good? The first part I’m going to answer uh quite specifically and the second one I’m going to give you say something and then speculate a little. Okay. So the first part is I would say you know the you know for a lot of people it goes back to that S-shaped curve we discussed. It’s the fact that you know they are it’s not that they were sitting there waiting for okay I get some free money I’m going to take a go on vacation. They were hoping that they get a chance in life. A lot of people want to do things in their life and you know you you you are someone who’s done something in your life. You know that you didn’t come just from just from this sense that okay uh you know uh I you know this is programmed into me. It was a it was a choice. You you wanted to do something and I think why would we think poor people are any different from us. So if you give them an opportunity to give a better future for their children, better future for themselves, to live in a house that’s uh you know um you know nice house why would they just say that no I should just go drink when just this why would that be the psychological model that we believe in? That’s my answer to the first part of the first question. Second question. So there is actually now fair amount of policy traction. So in Bihar um the GVK which is part of the labor ministry but it’s a it’s a I guess a I don’t know a se maybe a semi-governmental organization which implements social programs. Okay. they implemented um the this program I described to you which is the one of giving cows etc which is called the graduation program bizarrely enough but uh that program they implemented I think for one lakh families and for with a part of that sample we did a randomized control trial and it’s vastly successful dramatically successful also so I I I would I I my view is that you know there is now some policy traction when you you look at how you know how difficult it is to keep going back to people and trying to support them I think people understand that if you so I that’s part of the answer the last question is why because I think people partly have I think they are [snorts] people need to feel that you know their success is fully earned. And so these poor people, they didn’t earn it. I earned it. In fact, we don’t recognize that huge part of our success is always luck. We were born into the right kind of family. I was born into a family of professors. My family, my grandfather was a school teacher. My great-grandfather was a school teacher. We had books all over the house. So the fact that I I can I can read and write and understand things is not an accident of you know my genius. It was just you know luck. It was luck. I was born in the right place. I was you know my parents encouraged me to they discussed ideas with me. My father would give me ma math puzzles and we would discuss them. I mean it was all of this cultural capital is luck. Yeah. And I I I don’t think of myself as being a genius. I think of myself as being someone was in the right place at the right time. And uh and I benefited from it. I think people underestimate how much how difficult it is for the poor to get out of where they are. Just just how much pressure is on them and uh and they in reverse they give themselves too much credit. And why do you think rich people they don’t do much charity? They don’t actually give freebies. A lot of people don’t. And I asked this question specifically to uh Bill Gates as well. And I asked him that when you go ask for money or probably just spend time with people with lot of money, why there are just few tech billionaires who are ready to give away their entire wealth versus the conglomerate who’s accumulated wealth over years and years and years of money and they are not able to give money so easily. What’s the reason? You know, I think sadly I think a lot of I have it. Why will I? I was deeply I find it deeply disturbing and there are not this is not everybody obviously you know there are people who who will who actually genuinely uh are committed to to the poor and Bill Gates is a an excellent example he’s he takes I think what is particularly I think laudable about his example is that he not only gave his money he gave his attention and that’s a very valuable thing. He’s a very very thoughtful man and he gave his his intellectual investment to this project. So and I I fully uh credit him for that. So I I think it’s also that partly people don’t get so I think what gets understood is that it’s also exciting to do these things to solve problems and I think a lot of people haven’t also got that taste. So a lot of it is also about you know feeling that this is also a remarkable project. It’s not and I think that here when they do charity it’s also that people haven’t yet got this idea that you know I’m going to actually this is going to give meaning to my life and I think there are people of course who who do that or really but more rich people give less money but there are few who give a lot because I think they are they also feel that you know it’s not exciting for them and why will I And there’s all this nonsense about this is going to just be bad for the poor. You know, I I really think this conversation is important because I hope people really look at the data. I I’ve been looking at the data and I I don’t think I’m a pushover. I think I’m I mean part of the reason why I’m successful is that I’m I’m known for being quite careful about these things. So and I would say I’m not and I know that the evidence is very clear that this is not going to you know ruin the lives of the poor. So they tell themselves these stories also that’s why the stories are damaging. Why do you think why do then people also say because if there’s data that freebies are actually helping that the freebie politics in India is ruining the country. So there is a question which is slightly distinct there. So I think part of it is what we discussed which is people don’t like the idea that you know their tax money is being given to the this issue he read all the time I must say and depresses but do you think that freebie economy or free politics is ruining country I don’t but I I still think I mean I I actually it’s interesting that all parties do it um and I don’t think it’s ruining the country but I do they keep topping it up they keep topping it up Remember the country is also getting richer. It’s not that the share of GDP going to the poor is dramatically exploding. So as the country gets richer, there’s more GST as we discussed and there’s more money to for welfare for welfare. So I I don’t see a reason why this is such a you know awful thing. But nonetheless, I I do think that one worry which is real and maybe is that there’s a little bit of you know vis chasing visibility there. So you know in Tamil Nadu it was famous that you know before the elections the chief minister would summon people and tell them this time TV is for everybody or computers for everybody. So there is a little bit of that and it’s not clear that everybody needs a TV or needs a computer. So I I do think that there is some amount of you know visibility chasing which which makes it uh sometimes wasteful. So I I think there is some some reason to try to be very disciplined about these things and say that you know here’s what the evidence says and we should really invest this money thinking about the long term rather than here is a pre-election scheme which which happens to be you know computers for every school but it may be that that’s what not what they need. I I do think that there is some some validity to the to the concerns. So do do you feel this competitive welfareism for popularity and winning votes is it good or bad? I would say that overall it’s meant that more money is going to the poor. So it’s good. I I mean I I think as I said there are you there are better ways to do it and I I’m happy that Bihar went through this and they [snorts] really went through the research they we we discussed the research with them. So they’re they were very mindful of the fact that money eventually if you want to do it for all the poor is money is scarce and what would be a better model to give the way government is in like few specific states they’re giving it to women 1,000 rupees a month or 3,000 rupees a month 2,000 a month what do you think is better way that giving them 1,000 rupees a month for next 5 years which or giving them upfront like 60 60 70,000 [clears throat] up front. Said women’s labor market opportunities are often very constrained. So will their family led them start a business? You know, I remember a lot of the women we worked with in that in that graduation program were actually either abandoned women or widows or husbands who were uh had, you know, had had a stroke and were not going to do anything. And so they were actually working and whereas a lot of our you know this issue about labor force participation and so I don’t know whether women will be allowed you know the this whole story that I told is about uh women being able to work work and so that’s that’s that’s the reason why it may be different for for women in India in India and doesn’t it become a big let’s say hole or pocket or like big burden on a state’s capital or like budget right isn’t that a problem because then is that not harming state because they’re spending literally lacks of crores of rupees you know another way to think about it is that the the fact that there is you know social peace and that we so this India is a relatively you know stable country and that there’s not a lot of you know vi violence and all that has something to do with the fact that you know you know the we the inequalities that are as glaring as they are you started with the inequalities so I know you’re aware of it are not allowed to explode totally that in some sense the poor are not allowed to go to zero so you know I think there is something there about maintaining social coherence that’s critical in any society so I don’t even think that this is I think the rich should understand that you know their the access to a stable large economy is partly funded by these social programs. You have publicly said that tax havens should go. Yeah. What do you mean by that? Should go meaning every country should want them gone. I mean, why would you want tax cabins? It’s a bit like, you know, it’s undermining your own project of of uh taxing people. And then I mean there’s a little bit of cynicism sometimes in the sense that governments often want to you know pretend that they are very serious and and then not do it because the rich are very powerful. But but beyond I I see no reason to to have any sympathy for tax heavens. But why why do governments don’t ban tax heavens? Which one would be the most lucrative tax heaven in the world? probably less. I think both Switzerland and Monaco are probably but they’re less and less good tax heavens. They’re not tax like great tax like St. Lucia and all of that would be no great tax he happens but they are little bit less you know people are you know what Monaco does is it is like you know you become a resident there’s no taxes uh it’s it’s much more like a legit now if you have moved to St. Lucia or Granada, it’s a little bit dodgier. So shady shady. [laughter] So there is some trade-off there. But I think the I think both Monaco and Switzerland in are moving towards a more more uh they are more complying better. So I think that this is this is this is changing and and I think it should change totally. But why let’s say why country like India doesn’t ban these tax? What the the question is what does it ban mean? So a lot we are also I mean maicious in Dubai are big investors in India. So Indians take residency in Dubai and so what does it mean? You can’t invest in India if you are if you’re a resident of Dubai. Dubai gives you no tax. So it’s not that. So the question is more what is tax what counts as taxable income in India and there are countries the US for example which are much more tough about that they don’t you know you can’t just say that I’m leaving uh bye-bye and I won’t pay pay taxes and [snorts] you know and Sweden has an exit tax you have to pay to leave so there are countries that can do much more but it it’s a matter of you know you can’t tell people that you can’t move to Dubai. So therefore, you know, you have to think of what that when you say ban, what does it mean? So if we if there was a world agreement that says that you know if Dubai does it we’ll stop all trade with Dubai then indeed you would have no pro the problem would be or if Slucia has to grow all its crops because we’re not going to give them any food then it would like you know Iran has a trade after all the trade using trade to to you know co countries is not unknown. So we could do it. We could say that you know Granada gets no more no more uh rice and then they will presumably have to collaborate a bit more. But why why it should happen like because countries like probably let’s say Monaco or the UAE they survive on the fact that they’re building such a good safe secure country and which is probably tax efficient for highly ultranet high worth individuals whatever you want to call them like they attract that is how they attract or else they’re just going to be deserts and barren lands I but Why would but the amount of damage they do to to [snorts] countries which have many many many more people it’s a matter of people right so eventually we want to uh to help a lot of you know pe large populations and [snorts] these countries are do do huge damage to but it’s only it’s always going to be like a like a debate of are how do you sub like do citizens of these countries ries matter more because that’s how they make money versus some other country where there are more people. I if but I think the debate is more about I mean it’s true that there will be a debate but it’s a it’s a you know when when my economic uh moral is that I’m going to exploit some other country then you could say that that country has a right to push back. So I mean Europe is basically I think there’s minimum tax on corporates which will happen. So you know all companies will have to pay if they want to sell in Europe they can’t just locate in St. Lucia and and so I mean Europe after all is providing their market why should Europe subsidize their uh lifestyle. Mhm. Europe should do exactly that which is they should impose a a high minimum tax on any income that comes from selling in Europe or ban selling in Europe. I think that’s that will happen actually that happens in India as well, right? Like even if you’re in some other country and you’re selling it here. No. And we don’t have a place of business you have to pay at least not personal tax but you have to pay the com the GST and stuff like We don’t pay I mean we don’t have any tax on meta on you know on alphabet I mean are they paying any any any taxes on anything? No but they must be paying GST just to operate here. No no they’re not paying corporate tax. No but they they’re not and Indian ident entities must be paying because they are not making they’re not selling anything here. They’re selling advertising online. So, so I don’t think they are I mean you this I’m not an expert on on Indian tax law. Okay. So I if if I’m wrong I’m wrong but I do I doubt that they’re paying much in taxes here. Interesting. I doubt they pay very much because in in fact Europe is fighting this battle against Trump to get uh to tax uh the Alphabet and Meta and uh I guess Microsoft or whatever these these companies Europe is fighting and the Trump basically forced them to not tax them. So I don’t think actually we would dare. Uh Meta paid 5,993 cr income tax in 2026 to the Indian government. Yeah. But is that because they are um as a fraction of their uh revenue that’s let’s let’s do it as a fraction of their revenue coming from India. That’s the part I don’t know. So the point is that they pay some tax. Yeah. based on I think there is some some rule that all the services which are being availed here you’ll have to pay taxes here on that you probably don’t have to pay personal income tax because probably Mark would be making that’s a personal citizenship but I think company the place of business profit tax we don’t get the profit tax I I I do think that the co must not be paying but the Indian co must be paying yeah Indian co is probably paying I’m saying the Europeans are fighting this battle attle as we speak. So I I I don’t know exactly tax I’m not tax law is now two steps away from me but I can tell you that the Europeans are fighting this battle and Trump is very much that’s why they are so proTrump you could imagine a law which says that every country every market gets the same share of you know if you if you operate in a market after all we provide them with a huge market yeah with a consumption market yeah why why Why why why do we provide them free? So the question is is that what’s the scale of it? So I I I think that’s one question and then the question of personal income and paying taxes on it is a distinct question. So that I I do think that those are separate. It’s you know it’s it’s interesting to me because yesterday I was having a conversation with Samir Saran. He said the same thing that we give such a big large humongous consumption market and a potential market which is growing and getting richer and we don’t price it right and we are just giving it away for free. He said the same thing you are saying the same thing almost every thought leader is moving in this direction but I think Europe is fighting this battle right now. So it’s not it’s the signals are there which is that Europe is trying to get the these American large American uh global service providers to be taxed based on the revenue that they are getting from European countries. China how do they do it? China doesn’t allow these people in. So very simp Apple is there, right? Apple is there but Apple is is a company also in China. They’re producing. So but you know they don’t Yeah. They don’t allow WhatsApp or Google. So they they have a they don’t have the same problems we do. They’re like they’re closed economy. Yeah. Do you think for economy to grow keeping it closed makes sense just [snorts] like what China did? I think China never kept it closed. I mean they when it started growing, China was always what they did was they undervalued their exchange rate. So that’s a little bit like closing because Chinese things were cheap and foreign things were expensive. But they were never closed. they were always open because they realized that at this point we need chips if you want to do you know if you want to be competitive in AI we need chips and if we don’t get the chips we’ll just zero chance if if we don’t and Nvidia is not you know we we need to it’s a American company we’ll have to pay so I I do think that there is no alternative to to you know especially in today’s world to using the world market for the key input. So I don’t think we can afford to be closed and I think we did very badly uh in ex when we were fully or almost fully closed. We were you know everything was such a pain to get that people weren’t using the right inputs and everything was a little bit of a jugar and all that. you know before 91 before 91 so I I don’t think I think we’ve been there done that I I do think that do we have to be do is perfectly open or partly open these are harder questions but you know the Chinese certainly were not fully open they always kept their exchange rate undervalued which then is a way to basically close it button [snorts] talking about China. That gets me to our economy again. We are in this race where we’re going to be competing against China and US at some point in couple of decades or years from now. And we are at this point chasing Japan, right? So it’s like our GDP is almost going to be around that. Yet an average Indian is probably 10 or 11 times poorer than an average Japanese. Does it mean that we are growing as an Indian and we are we have arrived or does it just mean that it’s some number which is good for books and pride and it actually means nothing. I mean the GDP com comparison I already said this means very little to me. There is some significance of course we have more sway in the world world than you know whatever uh you know Guyana because we have more more of a we’re a bigger market you know if we banned um like China has alphabet it would be costly for alphabet in a way that’s not if Guyana bans alphabet it’s not going to be so but I think the size matters But first order is is very little to do with what we should really take pride in which is quality of life for our people and quality of life is is it improving? It has improved in in some ways. But I think especially if you look at the the the amenities we provide the poor, you know, there I really think I mean if you go to the kind of the not the central part of Delhi but like Rohini or Duara or places like that. I let I know Mumbai less but it is such completely desolate places when the the urbanization is so low quality there are no parks there’s dusty children get to play in the dust rather than in rather than in some place which is healthy I mean the quality of the air is terrible in Delhi it’s so terrible that people mean some estimates are that you know people are losing 10 years of their life I mean these kinds of numbers should really that’s quality of life right it’s just how long do you live if you’re sick from the age of 55 because your lungs are get weak then that’s low quality of life and I think a lot of people except those who can afford to get out of Delhi and go to the house in Goa in the winter or those who can have you know air purifiers in every room for the and good ones I think for the rest it’s it’s it’s a bit of a if you talk about quality of life when that’s the trade-off Delhi used to have much better air I mean now we are the poor are richer in Delhi but they are they are the air they breathe is terrible yeah so you you said poorer are poor are richer in Delhi yeah I mean that [clears throat] they compared to 19 90 okay the the poor in Delhi are much much better paid even in even inflation adjusted but does that mean that they are quality of life is high? You had another paper you wrote another paper marry for what? Yeah. What does it mean? You know what determines marriage is a huge economic choice. you know, you’re you can and it’s always been uh you know, there was in the in the Middle Ages um there was in Europe there were a a lot of um you know people died very young and a lot of um you know widows who were older meaning they were 28 would marry 18year-old boys because they wanted a farm a strong boy to work on their farm which their husband usband had they had been widowed and they so it was it was always an economic choice you know they were buy buying labor so so you know and now in India we in a sense we do the reverse we buy labor I mean women very cheap labor who you know she’s works like 12 hours you know kana banana you know taking care of the elderly this that school get the children to school come cook for their you know they have very long days. So in a sense there’s always that element of so is is is marriage an economic choice of course and uh the question we were asking was is it how much of it is you know how important is cast in these decisions and we found that it was very despite being an economic choice cast is very important. How what did you find? Uh we found that the premium on on getting a groom from your from and this is not necessarily the choice of the woman but of the family. A premier groom who is from the same cast is like the difference between a high school degree and an MA. [laughter] That’s a big difference. So you know so people were willing to sacrifice a lot of education for cast matching and [snorts] you’ve you’ve seen that different casts have different wealth structures how like is even in 2026 there are some cast who ends up getting wealthier than others. Yeah, but I mean we discussed this but in the end it’s not that social connections matter uh family uh you know kind of background you come in the the fact that you have an uncle who can give you a loan of 10 crores to start your business matters so why wouldn’t it be and your uncle is from your same cast it’s not there’s nothing nothing surprising about that do you think in future now that the AI is coming the inequality will be more or less I think that what’s going to happen is that especially the middle class will be hollowed out but then will the UBI come you know I think we are little bit I mean moving towards covering more people in you know the fact that you know the the PDS cover 75% now is is not accidental we’re moving towards including a lot of the [snorts] middle classes into these schemes. Whether UBI will come anytime soon, no. Because I think we are still our tax capacity is still extremely I mean we we we as as we were discussing if we start to try to trust the rich they will move to Dubai and put the money in Maldives. And so I’m skeptical that that we’re going to get get there anytime soon. Open AAI recently published a paper and they’re working on it very openly. Yeah. That at some point because AI is going to do most of the jobs then they we will have to launch universal basic income. Yeah. Do you think that’s the future? I think the part that open AI is not open about is how will we how will we fund it and who’s going to pay the taxes. And I really think that it’s very easy to say that productivity will be high so we don’t need workers and we can give them UBI. All sounds good but then you ask them okay then shall we have a 70% tax rate on the rich because that’s how we’ll fund it. How will we fund it otherwise? I I don’t understand this. This conversation is a bit dishonest in my view. I we really need to talk about paying much higher tax rates than we are facing now. Uh and then I I I’m I’m very keen to join that conversation because I I I have thought about it, but I I just don’t see the the the fiscal side of it needs to be honestly dealt with before we can talk about UBI. [snorts] So like the rich who are making consolidated wealth should be taxed way more way more. That’s the only way you I mean if you want to get into the UBI conversation there is no Are you in favor of that though? Yes, I’m in favor of the UBI concept. Whether it’s UBI, that’s a diff more difficult question. The question of I said of taxing the rich more. Yes. Whether right now we need UBI or we need to uh have more targeted, you know, if in India we went to do that, we are still pretty poor. We may want to do more targeted investments uh than than that. There’s a lot of other things we need. We need urban infrastructure. We need to deal with the pollution in our cities. There are many things that are valuable whether I would say UBI is the number one on that list. We need to improve our education institutions. You know there are many things we need to do. I I I that’s a much harder question on whether whether we should go directly to UBI or we should invest it in other things. Should we tax the rich more? Yes. There was one thing which came in my research which was about you were in jihad for 10 days and even in jail there was inequality. Yeah. What inequality was there? They’re like jailers of certain studies. Exact. Just give me that example. 1893 I think or something you know Indian um uh penal code uh used to which was now we have replaced but it was in in uh was was what we were jailed under. Um there was a a provision which said that people with bachelor degrees can get bindi or vegetables the others get you know they get different diet. So we were going to get if we could prove that we had all bachelor degrees we could get you know vegetables without dal otherwise you just get dal roti that [snorts] was literally the law which is that if you it’s an amazing uh you know you you you have you you’re jailed but you are you will get better bindies if you are if you are graduate graduate why this is in 1893 they have other values I mean it’s hard to hard to you know was cast was much more accepted. All kinds of things were different. It’s hard hard to go back to that point and ask so much why. Did you learn anything specific in those 10 days when you were in jail which nothing else in your life can teach you? You know, we were very privileged because we were a lot of friends were with us. I think being alone I would have gone nuts. I think with all my my I was there with really many of my very close friends who are very close friends now even today. Yeah. Last questions I have. You said GDP is quite not a metric that we should be looking at. It’s not like a number we should like that’s like somewhere like you don’t take GDP very seriously. I don’t take it very seriously because I know a little bit about what goes into that sausage and a lot of it is for example the informal sector which you might notice is big in India the informal sector is actually not measured on a yearly basis okay it’s not it’s it can’t be done so what they do is they kind of use a coefficient they estimate it from some model which they you know build every five years. I think we’re using some NSS data to connect you know if this is how much spending is happening in the in the formal sector this is how much spending is happening in the informal sector now the fact that the informal sector shrinking now because of GST and all that and that the formal sector has grown all of this how do you take into account it becomes a it’s it’s a so when you talk about the growth rate is actually not 8.7 but 8.6 or 6.8 eight or you know these second digits after the after the decimal I don’t have a much faith in those numbers I know how they’re manufactured a little bit and so yes I sort of India’s got richer I don’t think there is anyone who’s disputing that how much richer exactly and you know how how good is our measure and what should we measure what number should we look at if not GDP you know I think we we do need to look at GDP. It just question is should we invest more in measuring it or are we doing is it and if we don’t invest more then should we put so much faith in that number that’s more the question I’m not saying we should give up on it because I don’t think it’s it’s it’s still the globally accepted measure of the size of an economy I’m not going to be the one who says that you know give it up but it’s certainly the case that uh we put too much on this year 6.8% 8% last year 6.7% ba it’s so kind of you know it’s a squishy thing so you don’t want to spend too much emotional energy on that kind of comparison you can say that we are doing okay as a as a economy we can see that you know the the [snorts] GST collection this year was the record and so that’s this quarter was a record and that’s a measure of transactions. So that’s a in some ways as good a measure as as GDP. It sort of gives you a sense of scale that you know things are improving the GDGST is higher. Now of course GST who who what gets covered by GST is varies and that rates vary. So you have to still bury your into those numbers to see exactly what that implies. But it’s not it’s not I don’t think any any statistics is telling us that you know the economy is not growing right it’s just how fast etc then there is you know people have different views so I think we could do better on many things no one number tells you the full story so there’s no point in trying to think of the the holy grail doesn’t exist fair well all right thank you so much thank you for spending time with us and explaining the concept basic six of things. I really enjoyed talking to you. It was very fun. Thank you. Thank you. What was that story of uh committee? What is that story? And then you were feeling sleepy. Okay. [music] I knew that people might call. So I switched off the phone and went to sleep. [laughter] I told my wife So [laughter] really, thank you so much. comation can change someone’s life. I’ll see you next time. Until then, keep figuring out [music] [music] [music]