Reason Of Indian Economy's Poorness Even Though Having A Lot Of Youths.

Updated: Apr 20

Law of diminishing returns is the answer!

There was a Dosa Stall in an office food court. The dosa stall had only one dosa master who could make 60 tasty dosas in an hour.

The stall owner saw many customers going to other stalls in the food court because the customers had to wait long for dosas as there was only one chef preparing dosas for so many customers.

The owner hired one more dosa master so that 120 dosas can be prepared

in a hour.

The move worked and they produced 120 dosas per hour which halved the wait time. More customers started visiting the stall due to the low wait time.

As the number of customers increased the waiting time increased despite having 2 masters. The owner now hired a third master so that 180 dosas can be prepared in an hour.

But the owner noticed that only 150 dosas were prepared in an hour. He wanted to know why only 150 dosas were prepared in a hour with 3 chefs (50 dosas per chef) while they could prepare 120 dosas in an hour with 2 chefs (60 dosas per chef).

The dosa masters told that the owner that now there are three masters, the dosa pan is not wide enough for three masters to prepare dosas at a time. They will need to buy one more pan to accommodate the new chef.

This is the law of diminishing returns. In short it means that if we just increase one factor of production keeping the others same, the output would become less efficient.

The dosa stall owner increased his labour but did not increase the capital (equipment).

Our country has a lot of labour, but we do not have the best technology to use the labour to produce stuff. We need to bring technology to our country and get training to use the technology and make quality stuff to get rich.

Having the biggest pool of youngsters is not something to boast unless we bring technology and capital to our country and train them. In forty years they will turn into biggest pool of senior citizens.

Thanks for reading till here !!!