The price of tomatoes has hit the ceiling. But why do we find it so difficult to pay Rs 160 for a kg of tomatoes when we are supposedly a rich country, being the 5th largest economy in the world by GDP? We need to examine the convoluted role of population in calculating GDP. Let us compare India and Australia. India with a population of 1,350 million is ranked 5th by GDP while Australia a highly developed country with a population of 26 million is ranked 13th. Let us assume that India produces 1 sack of wheat per person every year. Our GDP for this single item will be a huge 1,350 million sacks of wheat which is just enough to feed us. Australia on the other hand produces 10 times the amount per person but their GDP will be only 10x26 million or 260 sacks of wheat. Extrapolate the wheat sack example to all goods and services in the country. It will then emerge that the per person production is very low. Now when we take GDP per person our rank is not 5th but 122nd.
