Slowing Down
(Source: The Indian Express, Editorial Page)
Also Read: The Indian Express Editorial Analysis: 12 June 2025
Also Read: The Hindu Editorial Analysis: 12 June 2025
| Topic: GS Paper 3: Indian Economy, Growth & Development |
| Context |
| Latest macroeconomic data reveals a concerning Indian Economic slowdown in GDP growth despite earlier projections of resilience. This editorial critiques the government’s narrative and calls for more grounded policy responses rather than celebratory rhetoric in light of ground realities. |
Background:
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India’s Q4 2024–25 GDP growth came in at 6.2%, lower than previous quarters.
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There are emerging risks from global headwinds, domestic consumption fatigue, and slow private investment.
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The editorial questions overoptimistic claims and emphasizes the need for grounded economic management.
Issues in Current Economic Management:
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Consumption Worries: Private final consumption expenditure is plateauing, especially in rural India.
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Investment Lags: Private sector investment remains subdued; most capital formation is led by the government.
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Jobless Growth Risk: Growth has not been accompanied by proportional job creation, worsening income inequality.
Challenges from Global and Domestic Factors:
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Global Slowdown: Weak external demand and global inflation tightening contribute to export stagnation.
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Manufacturing Stagnation: The manufacturing sector’s GVA has grown minimally, affecting employment generation.
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Agricultural Vulnerabilities: Uneven monsoon and climate-related disruptions continue to strain the rural economy.
Criticism of Political Narrative:
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Overemphasis on Optics: Political leaders have highlighted India’s global ranking, ignoring ground-level distress.
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Lack of Data Transparency: Key surveys like the Employment–Unemployment and Consumption surveys are delayed.
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Neglect of Middle Class & MSMEs: Middle-income groups and MSMEs face credit stress and inflation pressure.
Way Forward / Recommendations:
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Focus on Rural Recovery: Enhance MNREGA funding, rural infrastructure, and targeted subsidies.
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Data-Driven Policy: Rebuild credibility by releasing timely socio-economic data like consumption surveys.
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Boost Private Investment: Offer stable regulatory environment, reduce compliance burdens, and ease credit.
Key Economic Indicators:
| Indicator | 2023–24 | 2024–25 (Q4) |
|---|---|---|
| GDP Growth Rate | 7.6% | 6.2% |
| Private Consumption (% GDP) | 58% | 56.4% |
| Gross Fixed Capital Formation | 34% | 33.1% |
| Unemployment Rate (CMIE) | 7.4% | 8.2% |
| Practice Question: Discuss the recent concerns regarding the Indian economy’s growth trajectory. How should India balance optimistic projections with structural policy corrections? (GS Paper 3 – 15 Marks – 250 Words) |
