'In India, if I give you Rs 1,000...': Sabeer Bhatia questions country's GDP math

India’s GDP might be growing—but is it measuring the right thing? Hotmail co-founder Sabeer Bhatia doesn’t think so. In a recent podcast, he argued that India’s economic metrics are deeply flawed, inflating progress by counting transactions instead of actual work. His fix? A system that tracks hours of effort, not money exchanged.

“India’s GDP is all wrong,” Bhatia said, criticising the current model for rewarding movement of money rather than meaningful output.

“In India, if I give you Rs 1,000, 18% GST is taxed on it, and you give back Rs 1,000 to me, 18% 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.”

He contrasted this with the U.S. model, where economic value is derived from time spent working and its output. “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.

To make India’s economy more reflective of real productivity, Bhatia proposed an hourly work-based system that assigns standardised rates across professions—from labourers to lawyers to doctors—and measures output accordingly.

“The way India fixes this is to first make sure that everybody is based on an hourly system. How many hours of effort they are actually putting in into their work,” he said. “Hours of effort lead to progress, not transactions. Only when you put in effort do you get a positive outcome.”

He said such a model could promote transparency in taxation and foster a deeper sense of contribution among working Indians, particularly 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.”

He believes a cultural shift—anchored in self-tracked effort and digital accountability—can help redefine progress for the next generation. “Everybody keep a track of how many hours of effort you're doing towards work. Think of it as wor[k]…”