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If GoP decides to dig the largest hole in the world without purpose that too will contribute to GDP growth. lt’ll need excavators, big trucks, explosives, and create many jobs whilst digging. However, on completion if the giant hole generates not much to sell, it’ll soon fill up
The hole & all the activity around digging it will soon enough get forgotten, but the interest on the loan & principle itself the government borrowed, domestically & internationally (FX to buy specialised equipment) will still have to paid back. The jobs would have disappeared
Few will remember the hole but all will’ve to pay for many years to come. While digging it the government would have been able to boast about how GDP growth had gone up during its tenure, but future government’s growth will be restricted by the loans they have to pay for the hole
So whether its 2% or 6% GDP growth may make us feel nice about ourselves, and may even help governments win elections, but it’s always worth remembering how that growth is achieved and for what purpose. And most importantly who’ll gain when and who’ll pay for it for how long
