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Submitted by Ranjan Ray on

The PPP is a concept that, as calculated and made available by the World Bank, is of very limited significance. The reason lies in the lucid explanation of Kaushik Basu of what the PPP means. Prices vary so widely within large countries such as India and China, and between expenditure percentiles, that it makes little sense to assign a single value to the PPP for the whole country. The ICP should spend more resources on calculating intra country PPP s and intra regional PPP s than it does to calculating between oountry PPP s. Moreover, we should move away from expressing every country's PPP with respect to the US dollar. For example, one cannot work out the PPP s between say India and Vietnam without going through the US $. This is analogous to flying from Delhi to Hanoi via Washington. The Global Office of the WB should allow greater control to the regional offices that are better placed to calculate the intra regional and intra country PPP s. Given that the ICP is spending so much resources on producing a set of numbers that means so little, it is time for the ICP to try to undertake a more meaningful exercise.