- Fiscal experts, renowned economists, finance wizards, and people with a better comprehension of how the modern-day economy functions would be unanimously seconding the subject tagline without an iota of doubt. Ever since the Indian economy was subjected to liberalization and globalization, the country has made tremendous progress on the back of some prudent fiscal measures in line with the growing aspirations. So much so that the present dispensation at the Centre would want us to believe the country is on the right path to be counted among the advanced countries by the year 2047. The aspirational society, as propagated at every platform, is making steady progress in realizing this stated objective. But is it enough, though?
PC: KNN India
- The moot point to ponder here is whether the Indian GDP growth supports this exalted viewpoint when the geopolitical and geostrategic scenario is under great duress courtesy of Donald Trump’s debilitating tariffs as well as the dragging of conflicts between countries. Let’s dwelve. As reported recently, the growth this fiscal is expected to touch 7.4% against the initial projection of 6.3-6.8%. Most hearteningly, India remains the fastest-growing major economy, inflation is low, and fiscal deficit is under control. We even got a rating upgrade from S&P last August. Yet, the subtext of this year’s Economic Survey is cautionary. That’s because India, with all its pluses, is at a point where business-as-usual can’t get it out of the low-middle-income category. This is worrying.
PC: BW Businessworld
- For one, the decade or two of sustained 8% growth that last year’s Survey talked about remains elusive. Two, trading is harder in the current geopolitical climate, and if the AI bubble bursts this year, things could look worse than the 2008 crisis. What are the odds that 2026 will be no worse than 2025? Survey assigns it a probability of 40-45%. That means, its projection of 7% GDP growth in 2026-27 may turn out to be optimistic. Unless India makes some fundamental changes, going beyond the text of policies. One interesting idea that Survey proposes is of an entrepreneurial state. This is govt with the ability to deliver and get the right things done. Japan, S Korea, and Singapore have done it, but it requires a bureaucracy that’s not afraid to experiment amid chaos.
PC: India Shipping News
- That can only happen when govt learns to distinguish between error and corruption and doesn’t punish good-faith decision-making. Talking of experiments, one has gotten out of hand. Survey says that unconditional cash transfers are crowding out growth-enhancing spending. How can the Centre and the states invest more in schools, hospitals, power transformers, and roads if freebies consume their revenues? Note that the rupee was the worst-performing major currency last year, and it would have looked worse without India’s booming services exports. India must focus on strengthening manufacturing to maintain long-term currency stability and strength. Domestic consumption must pick up pace, too. And there’s lot that needs to be done for the economy.
, unconditional cash transfers crowding out growth-enhancing infrastructure spending, and the need for an entrepreneurial state model. India must fundamentally shift focus toward strengthening manufacturing, boosting domestic consumption, and reforming bureaucracy to experiment without fear while distinguishing between honest errors and corruption.){kind=link}