The Ticking Time-Bomb

This was the speech that I delivered as part of my ICSE English assessment.

The Ticking Time-Bomb

In 2022, India will overtake China to have to world’s largest population. Currently at 1.37 billion, it is projected to reach 1.6 billion by 2050. It will be more than 3 times the population of Europe and 4 times the population of the United States. Now, the question that bothers everyone in the world is: will our young and growing population rocket us towards prosperity, or is the sheer size of our population a ticking time bomb?

India’s young, energetic and growing population can be a boon our economy, if we take advantage of it. A young population means a country with educated, talented, innovative and tech-savvy people. It means a generation of motivated youth who are willing to take risks and seize every opportunity that comes their way. But let’s look at the statistics.

In the last 20 years, the size of India’s working age population increased by 300 million! However, the Indian economy could create only 140 million new jobs, that’s 160 million jobs short. And it doesn’t stop there. By 2040, another 280 million people will enter the workforce. That means that, in order to prevent an unemployment crisis, we need to create more than 12 million new jobs every year. Are we ready for this huge influx?

The good news is that India has now overtaken China to become the world’s fastest growing economy. Our growth rate is about 7.5% per annum. But this is not enough. China has been growing at 10% per annum for the last 40 years. We have not only started later, but our population is growing at a faster rate.

So, what can be done to help the Indian economy grow further so that we can provide those millions and millions of people with jobs? The answer is: investment. We need lots and lots of investment in the various sectors of our economy. We need investment to build new factories, repair our roads, expand our metros, build bullet trains and to fund research. We also need Indian entrepreneurs to start new companies and businesses. However, India only ranks 130st out of 181 countries in the Ease of Doing Business Ranking. This means that it is easier and quicker to do business in USA, UK, Singapore, Taiwan, Australia, China and many other countries. Let me give you an example. It takes 29 month to register a business in India, but just 1 day in Singapore. Similarly, it takes 53 days in India to obtain electricity connection, but less than 14 days in New Zealand.

We need to improve our ease-of-doing-business ranking by cutting red tapes, reducing the size of our bureaucracy and curbing corruption. We also need to make the payment of taxes and registrations completely online. If we do this, then Make in India will no longer be just a catchy phrase; it will become a reality. If we can do this, investment will flow into India like the Ganges from the Himalayas. It will flow through Bihar, Uttar Pradesh and West Bengal. It will flow like the Kaveri not only through Karnataka but also through Tamil Nadu. And it will shower India with employment, income and economic growth throughout the year and for generations to come. If we can make India into an investment friendly and a business-friendly country, then the next Google, Apple or Microsoft will be started by an Indian in India.

I want to conclude with a quote from our former Prime Minister, Dr Manmohan Singh: “No force on earth can stop an idea whose time has come.” The time has come for India to become a world economic superpower. However, we can achieve this only if every student, parent, teacher, and more importantly, every politician realises that we have miles to go before we sleep and miles to go before we sleep.

Humpty Dumpty Sat On Trump's Wall

This is a satirical poem that I wrote about Donald Trump and his laughable policies. Since some of you might be his supporters, just consider this as a work of literature. Have fun!

This poem has been published in The Times Of India: Student Edition.

Humpty Dumpty Sat On Trump's Wall

                                                                                by Vishal Ramesh

Humpty Dumpty sat on Trump's wall,

Between Mexico and America did it sprawl,

Memories projected on his eye's lens

Of days he had spent on both sides of the fence.

"Which side to choose?" he tried to decide,

"I can't choose between" in despair he cried

"The land of my fathers or the land I call home",

"I don't think I belong, I feel so alone!"

And so he sat on the wall day and night;

He resolved not to give up without a fight,

But Uncle Sam did not take note,

Trump laughed, and thought it was a joke.

Humpty Dumpty sat on Trump's wall,

Until one night Dumpty had a great fall!

All of Trump's houses and all of Trump's wealth

Couldn't bring the countries together again.

Peace was broken, so was trust

Because of a man's desire for powerful lust.

And another thing that on that day fell

Was America, the land that now looked like hell!

Only one thing must fall,

And it is the wall.

For only ALL the world's women and ALL the world's men

Can put Humpty Dumpty together again.

The Rat Race - Mensa Magazine Article

Taxing Question: Can we create a fairer system?

This is an article that I wrote appeared in the May edition of the British Mensa Magazine (I am a member of Mensa) It explores a different kind of tax system which has the potential to create a fairer society. There are debates in many countries, Japan being a notable example, as to whether it should be introduced.

Here is the ugly truth: most people try to gain status in society by showing off their wealth. They do this by buying what we call ‘conspicuous goods’ or expensive stuff that have cheaper and equally good alternatives.

You can see an extreme example of this in the online sensation Rich Kids of Instagram with its  unpleasant show of wealth by very young people (see panel opposite). Every primate including humans, vie to climb up the status ladder. Perhaps there is nothing wrong with this, it is just natural in a meritocracy. Or perhaps this is what is responsible for an increase in inequality as well as stress related diseases.

Wealth and income has increased steadily over the last 50 years or so in the West. But repeated studies have shown that overall happiness among people has not increased. British economist Richard Layard blamed it on the status-seeking behaviour of humans.

We have all become accustomed to working more, and spending more just to get ahead of others.

Consciously or unconsciously we buy things to display our higher material status. Remember the time you bought those expensive Nike shoes? Or that expensive watch? Or the Lamborghini? We do this to show others our wealth. We sometimes prefer cheaper alternatives, but end up buying costly  ones so that we are not noticed using the cheaper goods and having others “think less of us”. This behaviour is found among almost all humans. However, having a work-spend-and ‘get in front of the line’ attitude is not very healthy for the mind, body or for society.

When everyone works more and spends more everyone has something to lose. Stress and irritation prevails in individuals. Wealth disparities breed in society. So how do we stop this materialistic, consumption attitude? Time for some economics. Undesirable effects caused by activities are called externalities. For example, pollution is an externality caused by burning fossil fuels. If you ask an economist on how to stop negative externalities like pollution, they will recommend taxing it. So taxing pollution could discourage it and reduce pollution (the same thinking applies to the recent tax increase on sugary drinks). Such taxes are called Pigouvian taxes and have many supporters.

Spending to show status is also an externality since it has negative effects... reduced time spent on leisure, increased inequality and reduced trust in society. So can a new tax help eliminate this problem? Yes. Income tax is what we call a ‘progressive tax’. It means the more you have, the  larger proportion you pay. Value Added Tax (VAT) is the additional amount of tax paid on the things you buy – however, it is what we call a ‘flat tax’. Everyone pays the same 17.5 per cent of their consumption. Here is where the problem and the solution lies...

Take a moment to think about what can be done to discourage the materialistic consumption by making some changes to the tax system. It is less to do with Economics and more to do with logic.

Here is one potential solution. ‘Income’, i.e. the money a person earns is equal to the amount they save and the amount they spend. So what if we tax everything other than savings progressively? It means all the money you put in a bank savings account will be tax deductible. The rest, which is the consumption, can be taxed progressively... the higher your spending the larger share you will pay as tax.

Currently since VAT is a flat tax, those with a higher income pay a smaller share as part of their consumption. This new tax will help to reduce conspicuous consumption. Less money will be spent  on fancy handbags, expensive cars and other things that are bought to display status. People will  spend more time on other activities that increase well being, including exercise, family time, charity work and socialising with friends.

This idea is called the expenditure tax and was made popular by an economist called Robert Frank. It has been introduced already in some countries but only so far in a limited form.

Frank advocated a much steeper tax. He believed the richest in society should be taxed on about 70 per cent of their consumption. Such a tax doesn't look like it is coming soon even if, ironically, Bill Gates considers this to be the best tax system because of its fairness and efficiency. If only the Rich Kids of Instagram could be convinced...

Why Africa Is Poor - Book Review

'Why is Africa poor?' This is a question which everyone has asked themselves at least once. World leaders, the general public, activists and even economists have struggled to find a satisfactory answer to this question.

Greg Mills answers this pressing question in the first sentence of his book: 'The main reason why Africa is poor is because their leaders have made this choice.'

He argues that countries can grow their economies and develop quickly if leaders take strong decisions in the national interest. Mills provided dozens of success stories ranging from East Asia to Latin America as well as some cases inside Africa.

But most of Africa's performance remains dismal because the broad public interest were in many cases not in the leader's personal or financial interests. But why wasn't corruption stopped? Africans and the international community has allowed them to get away with it.

In this book, Mills busts every known myth about development from colonial history to the effectiveness of aid. Mills demonstrates how African leaders can harness their people's entrepreneurship and hard work to help their country to develop. And while it largely needs to be played by Africans, Mills shows how the rest of the world can play a meaningful role in this endeavour.

This is one of the most optimistic books that I have ever book. I would recommend it to every human being in the world.


COMING UP: Let us see how a simple tax reform can stop the rat race of humanity.