India is lying about GDP': Hotmail founder Sabeer Bhatia says India must rethink its work ethic to compete with China.

Hotmail co-founder Sabeer Bhatia has sparked debate across business and policy circles after openly slamming India’s GDP model and calling for a major mindset shift in how the country defines progress, effort, and success.

 

In a recent podcast, Bhatia explained why he believes India's current GDP model prioritises financial transactions more than actual productivity.  

 

“Our GDP is all wrong,” Bhatia said, adding, “You just need two seconds to look at how they are computing GDP. In India, if I give you Rs 1,000 and you give it back, that’s counted as Rs 2,000 of GDP. But no work has been done. Giving money is not work. Correct work is work.”  

Bhatia then proposed a bold alternative: measure India’s economic output based on actual hours of human effort, not just how much money changes hands.  

 

“In the US, everyone has an hourly rate. You calculate how many hours of effort were put in and report that. That determines GDP,” he said.

Bhatia further argued that India needs to introduce a nationwide hourly wage system, across professions—from manual labourers to doctors and engineers—so that work is measured fairly and transparently.  

 

“Hours of effort lead to progress, not transactions. Only when you put in effort do you get a positive outcome," said Bhatia

India cannot compete with China like this'  

 

Bhatia also issued a sharp warning: unless India rethinks its work ethic, it won’t be able to compete with China in the long run.  

 

“India has to adopt a different work ethic. China still values people who are willing to work. People graduate as engineers and work as engineers.

In India, he said, engineers often graduate only to land cushy managerial roles—without ever actually building anything.  

 

“99 per cent of Indians who graduate as engineers join management and start giving gyaan to everybody. Where is the work ethic to build something with your hands?”  

 

He also blasted the obsession with “body shopping”—India’s staffing-heavy IT industry model—over genuine software development.  

 

"Here, people value anybody who does work with their hands. And yet he’s the software guru of India—doing body shopping, not software.”  

 

'Education for all, not just the rich'  

 

Beyond work and economics, Bhatia took aim at India’s skewed social priorities—especially when it comes to education.  

China educates everybody. Subsidised education. Subsidised cars. Everything. Here, education is the prerogative of the rich,” he said. “And what do the rich do? Get educated and then get married for dowry. What kind of thinking is this?”  

 

While acknowledging that building massive educational infrastructure overnight isn’t realistic, he stressed that India could still equip people with critical thinking skills—through digital tools and platforms.  

 

“We can teach critical thinking through an app. Solve real problems. Help people solve problems. Happiness comes from solving other people’s problems.”  

 

'The future lies with Gen Z'  

 

Bhatia wrapped up with a hopeful message for India’s youth, whom he believes can lead the country into a new era of honest, effort-driven growth.  

This change must start with Gen Z. They can adapt faster. They can lead us into the future," he added.  

 

Who is Sabeer Bhatia?

 

Bhatia co-founded Hotmail, one of the world's first web-based email services, which debuted in 1996 and was eventually acquired by Microsoft for an estimated $400 million.  Since then, Bhatia has been involved with a number of technology and productivity-focused businesses.  He is also known for expressing his views on innovation, economic models, and education reform, particularly in the Indian context.