The Indian government reported faster-than-expected GDP growth of 8.2% for the September quarter. It came as a surprise to many economists who were expecting a slowdown based on the recent high-frequency indicators such as consumer goods sales and durable goods production, as well as two-wheeler sales. At the same time, The International Monetary Fund expressed doubts about the Indian government's GDP data.
The IMF has recently expressed doubts about Prime Minister Narendra Modi's BJP government's GDP data. It has particularly questioned the government's statistical methodologies, inflation measurement, and the estimates of the informal economy used in reporting the country's gross domestic product. Professor Arun Kumar of Jawaharlal Nehru University believes the IMF's concerns are valid. He thinks the real size of India's economy is only half of what is officially claimed. “The economy is almost 50% wrong – when the government says it’s $3.8 trillion, my estimate is it is probably still $2.5 trillion because we are overestimating the unorganized sector, which is actually declining. This is building up over a period of time,” Kumar told Indian journalist Karan Thapar.
In its recent assessment, the International Monetary Fund (IMF) has given a "C" grade to India's national accounts. In particular, the IMF has raised the issue of the government using 2011-12 as the base year as being outdated, the discrepancy between production and consumption data and the use of Wholesale Price Index, and not a Producer Price Index, to deflate many economic activities to derive real GDP from nominal GDP.
The source of the biggest error is the way India estimates the informal economy which, including agriculture, accounts for almost 45% of GDP. To do so, India uses the formal sector as a proxy to estimate the performance of the informal sector. But if the two sectors are moving in opposite directions, as has happened after demonetization, GST imposition and the pandemic, you could end up overestimating the unorganized sector.
Indian-American economist Ashoka Mody, author of "India is Broken", has argued that the current unemployment crisis in India is a direct result of the destruction of the informal sector, particularly the mom and pop stores that employed a large number of Indians.
Questions about the veracity of India's official GDP figures are not new. These have been raised by many top economists. For example, French economist Thomas Piketty argues in his best seller "Capital in the Twenty-First Century that the GDP growth rates of India and China are exaggerated. Picketty writes as follows:
"Note, too, that the very high official growth figures for developing countries (especially India and China) over the past few decades are based almost exclusively on production statistics. If one tries to measure income growth by using household survey data, it is often quite difficult to identify the reported rates of macroeconomic growth: Indian and Chinese incomes are certainly increasing rapidly, but not as rapidly as one would infer from official growth statistics. This paradox-sometimes referred to as the "black hole" of growth-is obviously problematic. It may be due to the overestimation of the growth of output (there are many bureaucratic incentives for doing so), or perhaps the underestimation of income growth (households have their own flaws)), or most likely both. In particular, the missing income may be explained by the possibility that a disproportionate share of the growth in output has gone to the most highly remunerated individuals, whose incomes are not always captured in the tax data." "In the case of India, it is possible to estimate (using tax return data) that the increase in the upper centile's share of national income explains between one-quarter and one-third of the "black hole" of growth between 1990 and 2000. "
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I am not an economist and haven't much of an idea about how GDP is calculated (especially the informal sector), but I feel the general proportion in size between Indian and Chinese economies (1:5 or 1:6) is perhaps fairly accurate since there are several economic indicators where I have noticed 1:5 or 1:6 proportion between India and China - size of forex reserves and automobile production numbers are a couple of examples that come to mind - and as the French economist you mentioned in the article commented, perhaps the size of the Chinese economy is exaggerated as well due to opacity about how the Chinese govt calculates them.
ReplyDeletehttps://en.wikipedia.org/wiki/List_of_countries_by_foreign_exchange_reserves
https://en.wikipedia.org/wiki/List_of_countries_by_motor_vehicle_production
That said, Indian economy has indeed been experiencing sluggish growth in recent times, atleast partly on account of the prevailing uncertainities in the global economy. So I would take the govt's claim of 8% growth with a liberal pinch of salt. Recently the Indian govt was compelled to announce a major tax reform by slashing taxes on a host of products to rejuvenate the economy and encourage people to spend more. Taxes on many essential or commonly used products were slashed from 12% and 18% to just 5%, while the taxes on two-wheelers upto 350cc and cars upto 1200cc (gasoline) and 1500cc (diesel) were slashed from 28% to 18%.
That this worked to some extent in encouraging people - especially the midde class - to spend more was evident in the highest ever recorded sales of two-wheelers and cars during the recent festive season (August-Oct). What was even more remarkable in these sales numbers was the growing share of India's homegrown automobile brands. For instance, Tata and Mahindra surpassed popular Korean brands like Hyundai and Kia to become the No:2 and No:3 car brands by sales behind the market leader Maruti Suzuki. (And the primary driver for these sales were SUVs, not budget hatchbacks like the Suzuki Alto whose sales have been experiencing a steady decline in India over the years.)
https://www.autocarindia.com/car-news/tata-motors-tops-mahindra-hyundai-to-claim-2nd-position-in-october-sales-438340
https://www.autocarindia.com/car-news/tata-overtakes-mahindra-and-hyundai-to-claim-no2-spot-in-september-2025-437531
This surge of Tata and Mahindra was visible in the EV sales as well.
https://www.autocarindia.com/car-news/ev-sales-october-2025-tata-motors-has-healthy-lead-over-mg-mahindra-438359
It was a similar story for the two-wheeler sales in general, and those for the "Big Four" Indian motorcycle brands - Bajaj, TVS, Hero and Royal Enfield - in particular.
https://www.autocarindia.com/bike-news/honda-tops-two-wheeler-sales-in-october-2025-as-tvs-and-suzuki-hit-record-highs-438388
https://www.autocarindia.com/bike-news/scooter-sales-hit-all-time-high-in-october-as-gst-20-boosts-demand-438509
In fact, I would dare to say that the growth of India's automobile manufacturing and exports, the growth of its homegrown auto brands and their foreign acquisitions mirror what happened in China during the past couple of decades. As we speak Tata appears to have sealed a deal to buy the Italian truck maker IVECO. It already owns JLR and Daewoo Trucks. Bajaj meanwhile recently took control over the troubled Austrian motorcycle manufacturer KTM while TVS bought Norton.
I specifically mention the automobile sector here as that is an industry whose growth trends I have been following and reading about. I don't have much idea about the others.
So, in my opinion there are some sectors of the Indian economy (like automobile industry) that are bright spots and surging ahead with strong growth while there may be others that are experiencing sluggishness or even decline.
It’s also important to compare the size of the external debt when comparing forex reserves.
ReplyDeleteChina’s external debt $2.42 trillion, China’s forex reserves $3.43 trillion
India’s external debt $742 billion, India’s forex reserves $688 billion
China/India External debt ratio 3.26, China/India forex reserves ratio 4.98
- "It’s also important to compare the size of the external debt when comparing forex reserves."
ReplyDeletePerhaps that is correct. I came across this article.
https://www.newindianexpress.com/business/2025/Jul/23/forex-reserves-of-700-billion-cover-95-of-external-debt-rbi-bulletin
"The country’s foreign exchange reserves, which stood at close to $700 billion in the latest reporting week, can cover 95% of external debt outstanding at the end of March 2025, and also take care of over 11 months of goods imports cover, according to the Reserve Bank’s July bulletin."
Speaking of which, from what I could read from online sources, Pakistan's external debt is somewhere around $111 bn while its forex reserves hovers around $19 bn.
https://www.dawn.com/news/amp/1943692
"In FY25 alone, public debt grew by Rs9.4tr, with domestic borrowing swelling to Rs56.48tr and external debt increasing by $5.2 billion. The government’s external debt and liabilities now hover around $111bn, a stark indicator of reliance on foreign lenders."
With an external debt that is nearly 5 or 6 times that of its forex reserves, how would you assess the financial situation of Pakistan vis-a-vis India?
Vineeth: "With an external debt that is nearly 5 or 6 times that of its forex reserves, how would you assess the financial situation of Pakistan vis-a-vis India?"
ReplyDeleteIt's not a secret that Pakistan's macroeconomic indicators are not good. It faces significant risks but its debt default risk has dramatically declined in recent years.
The country's economy is under close scrutiny of the IMF, other multi-lateral institutions and lenders and its own media.
Pakistan’s debt default risk has seen a sharp drop as the country’s economy has stabilized under an IMF program. The nation's GDP for the April-June period grew at 5.66%, higher than the 3.1% expansion predicted by economists in a Bloomberg survey. The large scale manufacturing (LSM) sector saw 4.08% growth in the first quarter of the current fiscal year.
https://www.riazhaq.com/2025/11/retail-investor-growth-driving.html
AI Overview
ReplyDeleteAs of mid-2025, Pakistan's external debt stood at approximately $91.8 billion, a 6% increase from the previous year, primarily due to disbursements from the IMF and other multilateral institutions. This is part of a larger total public debt of $286.8 billion, which pushed the debt-to-GDP ratio to about 70% (India's debt to gdp ratio is over 80%). Key lenders include the IMF, China, and Saudi Arabia.
Key figures and details
Total external debt: $91.8 billion as of June 2025.
External debt growth: Increased by 6% year-on-year, largely due to IMF and ADB inflows.
Total public debt: $286.8 billion as of June 2025.
Debt-to-GDP ratio: Approximately 70% in June 2025.
Major creditors
IMF: Pakistan owes the IMF $9 billion as of October 2025.
China: Pakistan owes China at least $30 billion, including a recent loan of over $4 billion in June.
Saudi Arabia: Pakistan owes Saudi Arabia $9.1 billion.
Contributing factors
Disbursements: New loans from the IMF, the Asian Development Bank, and other multilateral institutions were significant contributors to the increase in external debt.
Exchange rate valuation: A portion of the increase in external debt was due to currency depreciation (valuation effects) rather than new borrowing.
Balance of Payments support: Funds from facilities like the IMF's Extended Fund Facility and Saudi Arabia's oil financing facility also impacted the figures.
Outlook and challenges
Repayments: The government faces significant debt servicing obligations, with nearly half of the 2025-26 budget allocated to debt servicing.
Sustainability: The reliance on external borrowing and debt rollovers highlights Pakistan's ongoing challenge of managing its debt burden.
There is a simple solution here - just look at ENERGY CONSUMPTION! For developing countries, energy is essential for almost all economic activity, and a rise in GDP is typically accompanied by an increase in energy demand.
ReplyDeleteIndia’s Industrial Growth Slips to 14-Month Low Amid Festive Disruptions, GST Adjustments and Global Trade Pressures Impacting Travel and Tourism
ReplyDeletehttps://www.travelandtourworld.com/news/article/indias-industrial-growth-slips-to-14-month-low-amid-festive-disruptions-gst-adjustments-and-global-trade-pressures-impacting-travel-and-tourism/
Industrial Growth Slips to a 14-Month Low
India’s industrial production expanded by only 0.4 percent in October, marking the weakest growth rate in 14 months. This represented a sharp decline from the previous month and a clear departure from the stronger industrial recovery that had been building earlier in the financial year.
The Index of Industrial Production (IIP), a key barometer of factory output, machinery use, and electricity generation, reflected widespread cooling rather than an isolated sectoral problem. What makes this slowdown more striking is that it occurred even as demand conditions improved following the indirect tax reductions announced in late September.
Ordinarily, the festive quarter supports strong industrial expansion as companies build inventories ahead of peak consumer purchases. However, this year’s festival clustering compressed working weeks and limited factory utilisation across large parts of the manufacturing belt. The consequence was an economy where people were buying more, but producing less.
India last received a loan from the IMF in 1993. Since then, India has been donating to international banks and funds, such as the World Bank, ADB, and IMF.
ReplyDeleteSo the IMF needs to put up or shut up so far as India is concerned.
That's not the same as with PK.
Shams: “India has been donating to international banks and funds, such as the World Bank, ADB, and IMF”
ReplyDeleteIndia is the largest borrower from the World Bank and the Asian Development Bank.
India’s debt to gdp ratio is 80%, much higher than Pakistan’s 70%.
- "India is the largest borrower from the World Bank and the Asian Development Bank."
ReplyDeleteThere is a big difference between taking loans from agencies like WB and ADB for financing development projects, and taking a bailout from IMF. The former is like what you do when you take a loan from a bank to buy a house, a car or start a new business. The latter is an emergency act to save the economy from bankruptcy, like when you mortgage or sell your properties to cover hospital expenses or save someone's life. Obviously, the two can't be compared.
Also, if I'm not mistaken, most of India's debt is domestic debt. Its the external debt that is most problematic, and India's relatively large foreign reserves act as an insurance against that. For that matter, even the debt-to-GDP ratio of countries like China and US are much higher than India's.
Indian Rupee falls to a new record low of 89.95 against the US Dollar
ReplyDeletehttps://www.cnbctv18.com/market/currency/rupee-at-record-low-us-dollar-rbi-intervention-policy-fpi-outflows-stop-loss-key-levels-19778137.htm
India's currency, the rupee, fell to a new record low of 89.95 against the US Dollar, on Tuesday, December 2, breaking past its previous record low of 89.78, which it fell to on Monday.
The currency has depreciated by over a rupee against the US Dollar since November 3, according to data available.
The fall in the currency comes just days ahead of the RBI policy and despite a strong GDP print of 8.2% for the second quarter reported on Friday.
Ashhish Vaidya of DBS Bank India told CNBC-TV18 that in the absence of any positive trigger in the near-term, he would not be surprised to see levels of 90 or even 92 on the currency against the US Dollar.
He ascribes a probability of anywhere between 60% to 70% for these levels to show up on the currency.
Anindya Banerjee of Kotak Securities said that so far, there has been no major intervention that has been observed by the Reserve Bank of India (RBI).
Banerjee said that there was a large Non-Deliverable Forward (NDF) expiry over the last few days, which needed to be rolled over or covered. He went on to add that in case the USD-INR breaches the mark of 90, stop losses will get triggered and there could be a swift move further down towards the 91 mark.
Jayesh Mehta of DSP Finance also attributed the fall in the currency to the daily selling from Foreign Portfolio Investors (FPIs) without any support from the RBI, and NDF expiry covering.
Mehta believes that the RBI should cut interest rates on Friday and should also announce Open Market Operations (OMOs) worth ₹2 lakh crore till March 2026.
According to Reuters reports, the RBI is likely to have sold dollars to prevent the currency to weaken past the mark of 90.
There is a case for the RBI to deliver a rate cut, according to Sakshi Gupta of HDFC Bank. She believes that the rupee is not a dominant driver for the RBI rate decision and that they will focus more on accessing the domestic growth.
After the initial weakness, the USD-INR currently trades at 89.93.
It's a whole lot of he said / she said but in the end, nothing of substance.
ReplyDeleteDaily fluctuations are common in currency exchanges due to demand and supply status.
Shams: "Daily fluctuations are common in currency exchanges due to demand and supply status"
ReplyDeleteRecord low valuations of currencies do not happen everyday. India’s rupee is hitting new record lows, ranking it among Asia’s worst performing currencies this year. Such devaluations are a symptom of a bigger problem.
It seems you love to argue just for the sake of argument without understanding anything related to the topic under discussion.
As per my understanding from the media reports, the recent sharp decline in the value of INR is largely on account of Trump's tariffs and the failure of a trade deal with US to materialize as yet. India's exports to US have been badly hit due to the 50% tariffs and as a result there is less USD coming in. That's why you don't see RBI doing any emergency fire-fighting and is instead adopting a "wait and watch" approach to see if a US-India trade deal come to fruition and intervening only intermittently to delay the event of INR breaching the psychological barrier of 90 Rs to USD. They would not want to waste its reserves to defend the INR if such a deal does not materialize. From their perspective it would be much better to let the INR decline and find its new stable equilibrium. (As a contrary example, you may remember how Ishaq Dar essentially emptied Pakistan's limited reserves in trying to defend an artificial PKR exchange rate years ago.)
ReplyDeletehttps://www.bloomberg.com/news/articles/2025-12-02/indian-rupee-nears-key-90-per-dollar-mark-as-trade-impasse-bites?embedded-checkout=true
The Indian rupee has tested a series of record lows this year, and some analysts warn it could slip to the psychologically key 90-per-dollar level if a crucial trade deal with the US doesn’t materialize soon.
The currency hit a new all-time low of 89.9538 on Tuesday as delays in finalizing a trade accord with Washington to lower one of the harshest tariffs in Asia hurt sentiment. It pared some losses after the Reserve Bank of India intermittently sold dollars around the 89.90 level, according to people familiar with the transactions.
India remains among the last major economies yet to sign a trade pact with the US, even as officials express optimism about concluding one soon. The 50% tariffs on Indian goods have hurt exporters, while strong imports have kept the dollar demand elevated, pressuring the rupee. These factors have contributed to a widening of the nation’s current account deficit in the September quarter.
For now, the central bank may be allowing a bit more weakness in the rupee to make exports more competitive amid the US levies, said David Forrester, FX strategist at Credit Agricole.
Although the Reserve Bank of India has stepped up dollar sales to smooth volatility, analysts say it may be reluctant to use too much of its reserves to prevent a break past the 90 level if no agreement is reached on the trade pact.
Indian Rupee breaches 90 to a dollar, falls 6 paise in early trade. A weaker dollar index and a fall in global crude oil prices cushioned against a steeper decline, according to forex traders.
ReplyDeleteRead more at: https://www.deccanherald.com/business/markets/rupee-breaches-90-to-a-dollar-falls-6-paise-in-early-trade-3818018
Mumbai: The rupee breached 90-levels against the greenback for the first time on Wednesday, falling 6 paise to 90.02 in early trade, as banks kept buying US dollars at higher levels and FII outflows continued.
However, a weaker dollar index and a fall in global crude oil prices cushioned against a steeper decline, according to forex traders. At the interbank foreign exchange, the rupee opened at 89.96 against the greenback and slipped to a record intra-day low of 90.15 before recovering some ground to trade at 90.02, down 6 paise from its previous close.
Read more at: https://www.deccanherald.com/business/markets/rupee-breaches-90-to-a-dollar-falls-6-paise-in-early-trade-3818018
Indian Rupee Plunges Past 90 Against US Dollar Amidst Deepening Economic Concerns
ReplyDeletehttps://markets.financialcontent.com/stocks/article/marketminute-2025-12-3-indian-rupee-plunges-past-90-against-us-dollar-amidst-deepening-economic-concerns
Mumbai, India – December 3, 2025 – The Indian Rupee (INR) today crossed a critical psychological threshold, breaching the 90 mark against the US Dollar (USD) for the first time in history. This unprecedented depreciation, with the currency hitting an intraday low of 90.30 before settling at 90.19, signals a period of heightened economic anxiety for India. The rupee's swift decline, marking it as Asia's worst-performing currency in 2025, is a stark indicator of persistent foreign capital outflows, a widening trade deficit exacerbated by surging gold imports, and a globally strong US Dollar.
The immediate implications are far-reaching, threatening to fuel imported inflation, increase the burden of foreign debt for Indian companies, and dampen overall market sentiment. While a weaker rupee typically benefits exporters, the current environment of global economic slowdown and specific US tariffs complicates this advantage, leaving policymakers and businesses grappling with a complex economic landscape.
Historic Slide: A Confluence of Global and Domestic Pressures
The Indian Rupee's journey to 90 against the US Dollar has been a culmination of several intertwined economic forces throughout 2025. On December 3, 2025, the currency fell sharply, extending a period of sustained depreciation that saw it dip below 89.95 on December 2 and a record low of 89.76 on December 1. This rapid descent from the 88+ level to 90 within a single week has sent jitters across financial markets.
A significant catalyst for this sharp depreciation was the announcement of sweeping US tariff hikes on April 2, 2025. India's tariff burden, at 50%, is considerably higher than that of other major economies, directly impacting approximately $45 billion worth of Indian exports, particularly in labor-intensive sectors. This, coupled with a prolonged delay in finalizing a comprehensive trade deal with the United States, has cast a long shadow over India's export competitiveness and investor confidence.
Adding to the pressure are persistent Foreign Portfolio Investor (FPI) withdrawals. Foreign investors have been consistent net sellers in the Indian markets, withdrawing nearly $17 billion from Indian equities in 2025 alone. This sustained selling has created unprecedented demand for the US dollar, widening the demand-supply gap in the foreign currency market. Factors driving these outflows include declining corporate profitability, concerns over stretched valuations, and the lingering uncertainty surrounding US-India trade negotiations.
India's heavy reliance on imports, particularly crude oil, electronics, and bullion, further exacerbates the situation. Rising global commodity prices inflate India's import bill, necessitating a significant demand for US dollars and putting continuous downward pressure on the rupee. The Reserve Bank of India (RBI) has adopted a more "hands-off" and "calibrated" approach to currency intervention, primarily aiming to curb "excessive volatility" rather than defending a specific exchange rate level. While the RBI has intervened by selling dollars (reportedly $30 billion between June and October 2025), its strategy appears to allow market forces greater sway, contributing to the rupee's swift depreciation.
Initial market reactions beyond just the stock market (where the Nifty slipped below 26,000 and the Sensex fell nearly 200 points) included heightened volatility in the foreign exchange market, rising bond yields due to inflation concerns, and increased hedging costs. The rupee's fall directly fuels imported inflation, particularly for crucial commodities, which can erode purchasing power and complicate the RBI's monetary policy decisions.
The '90' here is essentially a psychological barrier as it essentially isn't a whole lot different from an 89.7 or 89.9. So, there is no sense in wasting reserves to prevent the exchange rate from breaching that value. The bigger question here is whether or when there would be a trade deal with the US that can arrest or reverse this decline. The major sticking point in the trade negotiations appears to be the entry of US products into India's agricultural and dairy markets -a political hot potato for any Indian government. The fate of Modi government's farm laws in 2021 is an illustration of how politically sensitive this can be. Nevertheless, I guess at some point the govt would have to take a call on whether the continuing economic costs (with its associated political repercussions) of a 'no deal' outweigh that of a 'bad deal'. So far the currency depreciation has not affected India's consumers. Thanks to stable fuel prices and reduction in taxes inflation levels remain very low, even below govt's target. But at some point the effect of the currency depreciation would start to bite as import bills rise.
ReplyDeleteIndian shares extend losses on trade deal jitters, rupee at record low
ReplyDeletehttps://www.reuters.com/world/india/india-stock-benchmarks-set-open-higher-after-3-session-drop-2025-12-03/
ec 3 (Reuters) - India's equity benchmarks fell for a fourth consecutive session on Wednesday, as a delay in the trade deal with the United States and the rupee's slide to a record low dented sentiment.
The Nifty (.NSEI), opens new tab fell 0.18% to 25,986 and the Sensex (.BSESN), opens new tab shed 0.04% to 85,106.81. The indexes have lost 0.9% and 0.7%, respectively, in four sessions after hitting all-time highs on November 27.
NSE provisional data showed foreign outflows from the Indian equity market totalled 98.64 billion rupees (about $1.1 billion) in the last four sessions.
Investors unlikely to make much money in India next year: Marc Faber | Markets News - Business Standard
ReplyDeletehttps://www.business-standard.com/markets/news/investors-unlikely-to-make-much-money-in-india-next-year-marc-faber-125120400270_1.html
Global markets are set to sign off a choppy year and welcome 2026 amid hopes of better days. Marc Faber, editor and publisher of ‘The Gloom, Boom & Doom Report’, tells Puneet Wadhwa in a telephone interview that Indonesia, Thailand, Brazil and Colombia are among markets that could do well in the year ahead. Edited excerpts:
Are global markets in for more surprises in 2026 as regards US tariffs?
I think the impact of the tariffs on the economy will not be good. It’s negative for everyone but especially for the US. Because of tariffs, the US will face a higher inflation rate. The Fed can cut the funds rate — and they will — but long-term treasury yields may not come down. The bond market may not like these rate cuts, and long-term interest rates could even rise.
If that happens, the Fed will eventually be forced to reverse course. In my opinion, the only way to sustainably bring interest rates down is by tight monetary policy. But since they won’t do that, the bond market could sell off — and that would be bad for the stock market.
——————-
Will 2026 favour emerging markets (EMs) over developed markets?
EMs have underperformed the US significantly for the last 15 years. Going forward, I think EMs — especially Latin America and Indo-China/Southeast Asia — will outperform the US. Over the long run, India will also outperform the US.
When we spoke in May 2025, you did not expect strong Indian market returns over the next year. The benchmarks have hit new highs since then. Has that surprised you?
No, it hasn’t surprised me. I have always said: The Indian market may go up but the currency goes down. Yes, the Indian market is at a new high in rupee terms but in US dollar terms — and the dollar has not even been very strong — the market is down.
In fact, the last dollar-term high for India was in September 2024. In gold or silver terms, the Indian market is substantially lower. Investors should consider measuring their assets in gold or silver rather than paper currencies.
What returns should investors expect from India in the year ahead?
I don’t think investors will make a lot of money in India over the next year. In dollar terms, India is down over the last 12 months. Meanwhile, Brazil is up 55 per cent. Among major markets globally, India has not performed well over the past year. Some Indian stocks have risen, yes — but that is true in every market. In the US, technology stocks haven’t done well recently; what has done well are gold mining shares.
Global markets are complex. In Europe, the STOXX 50 index — despite poor economic conditions — is up 30 per cent over the last 12 months. So performance varies widely, but as a whole I don’t expect India to deliver strong returns over the next year.
Is India really the fastest-growing economy? Economist Arun Kumar breaks...
ReplyDeletehttps://youtu.be/8SYDPqB6Qhg?si=8qvGoQy0Lq4VTbZR
In this episode of Frontline Conversations, economist and retired professor from JNU, Arun Kumar, breaks down the turmoil inside India’s economic data ecosystem. He discusses the latest GDP numbers, the IMF’s “not fit for purpose” assessment, and India’s contradictory economic indicators all point to a deeper structural crisis.
Kumar explains why GDP growth is increasingly detached from lived economic realities, how the unorganised sector has been rendered invisible in official measurement, and why the 2011–12 base year has distorted national accounts for a decade. He also details the political pressures shaping data releases—from unemployment and consumption surveys to poverty estimates—and warns that the upcoming revision of the GDP series may still fail without census data and transparency in methodology.
Highlights:
-Why India’s GDP numbers are unreliable—and what the IMF got right
-How the shift to the MCA-21 database and removal of shell companies distorted growth estimates
-The systematic invisibilisation of the unorganised sector after demonetisation, GST and the pandemic
-Manipulation of data on employment, consumption, poverty and health
-The political logic behind “fastest growing economy” narratives
-Why GST cuts, corporate-friendly labour codes and tariff geopolitics are worsening inequality
Perfect for those interested in:
-Students of economics and public policy
-Researchers of political economy and development studies
-Informal sector and labour rights activists
-Think-tank analysts tracking India’s macroeconomic indicators
Credits:
Host: Sukumar Muralidharan
Camera: Vedaant Lakhera and Vitasta Kaul
Editing: Razal Pareed
Producers: Mridula Vijayarangakumar and Kavya Pradeep M
Is total GDP number worth anything? US has highest GDP, but large number of poor people with no med care. HDI is what matters as far as people are concerned.
ReplyDeleteGDP is but one measure among Maternal Mortality, Infant Mortality, Gender Equality & Schooling that forms the composite HDI. Unlike developed countries, for developing countries, in general, there is a strong correlation between them. In those countries all things being equal, a higher GDP translates to more resources available to tackle the ills of a society - good governance notwithstanding.
ReplyDeleteNarendra Modi Will Leave Behind a Broken India
ReplyDeleteBy Sudhanshu Tripathi
https://intpolicydigest.org/narendra-modi-will-leave-behind-a-broken-india/
As India’s Prime Minister Narendra Modi nears the end of what is likely to be his final term in office, a reckoning feels inevitable. After three terms marked by grand ambition, partisan dominance, and polarizing governance, Modi’s legacy is poised for intense scrutiny—not merely by political opponents, but by history itself.
Modi came to power promising transformation. Yet many of the most pressing challenges facing India today—economic stagnation, diplomatic friction, rising authoritarianism, and domestic unrest—have been exacerbated, not alleviated, under his leadership. India’s aspiration to reclaim its ancient stature as a Vishwaguru, a moral and civilizational leader on the world stage, now rings hollow in the cacophony of recent failures. The 2025 India-Pakistan war, China’s continued border incursions, and a visible lack of international solidarity during crises like Operation Sindoor all underscore a profound gap between rhetoric and geopolitical reality.
What began as a focused, energetic premiership has veered into an era of dysfunction. Modi’s weakening grip on foreign policy—manifested in frayed relations with key powers such as the U.S., UK, France, and Canada—reflects a broader loss of strategic coherence. The dream of elevating India into a global powerhouse has suffered repeated blows, not least from the absence of robust international alliances during moments of crisis. Instead, Modi’s leadership has appeared increasingly reactive, hamstrung by age, fatigue, and the consequences of wielding unchecked authority in a political landscape drained of serious opposition.
Domestically, his government faces mounting accusations of cronyism, corruption, and a willingness to sacrifice institutional integrity for political gain. From shielding BJP politicians accused of sexual assault—like Brij Bhushan Sharan Singh—to fostering a culture of impunity through the misuse of central investigative agencies, the Modi government has frequently weaponized the machinery of governance against its critics while turning a blind eye to wrongdoing within its ranks.
Nowhere is this institutional corrosion more visible than in the collapse of public trust in law enforcement and the judiciary. The ethnic violence in Manipur, for instance, spiraled into chaos without even a symbolic visit from the prime minister. Nor did he make a serious effort to restore confidence in security forces or engage with the humanitarian disaster on the ground.
Meanwhile, the BJP has mastered a kind of transactional politics that rewards defection. Politicians facing corruption charges have found themselves absolved the moment they pledge loyalty to the ruling party. Ajit Pawar, Chhagan Bhujbal, and others have undergone near-miraculous moral rehabilitations after joining the BJP—an alchemy that mocks the idea of justice and deepens public cynicism.
The health of India’s democracy itself appears to be faltering. The wholesale suspension of opposition MPs from Parliament to avoid uncomfortable debates amounts to a betrayal of democratic norms. When dissent is silenced and meaningful scrutiny is replaced by spectacle, it’s not just the opposition that suffers—it’s the republic as a whole.
Indian equities are having their worst year against global peers in over three decades. As foreign money exits and global investors chase China and AI-linked stocks, the Indian market is struggling to keep up. What went wrong and what comes next?
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