DMPQ-What is wealth creation? How it is beneficial for an economy?

Wealth creation is the enhancement of assets, efficiency in economy and overall value addition to GDP and to the all sectors of economy. Wealth creation helps in improving the standard of living by improving Personal income. It also lead to more taxes, employment generation. In India wealth creation is coterminous with the opening up of the economy.

Beneficial for the economy in following ways:

  • High wealth creation leads to high salaries and wages for the employers. It lead to high consumption and investment in an economy.
  • Wealth creation can attract foreign investors and hence can lead to high foreign exchange earnings.
  • High wealth creation will increase the Tax/ GDP ratio. Hence more for the government to spend.
  • High wealth creation will lead to more spending on capital formation which in turn will increase the chances of higher growth in the future.
  • Wealth creation in one sector affects the other sectors positively. Example If Iron and steel Industry is flourishing it will affect the coal sector, Transport sector etc. Suppliers of raw material also become the part of the Industrial activity.

Hence wealth creation is an important aspect and can lead to increase in the economic activity. But the wealth creation has to be on ethical lines.

 

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