More than half-a-century after economist-philosopher E.F. Schumacher talked of “economics as if people mattered”, India is caught in an economic story that is increasingly about numbers bigger than the people they are meant to serve.

As 2023 drew to a close, Prime Minister Narendra Modi reiterated in Parliament that India will soon become the third largest global economy. The Union minister of state in the PMO Jitendra Singh repeated the promise on 30 December 2024, when he said, “Hopefully this year [India] will emerge as the fourth-largest economy and during PM Modi’s third term, India will be the world’s third-largest economy, marching on to become the No.1 economy by 2047.”

Ironically, the claims of a march to global superstardom come come at a bad time, even from a numbers-only perspective. To begin with, growth is down and inflation is up. GDP was 9 per cent in 2022–23 H1, fell to 8.2 per cent in 2023–24 and further slipped to 6 per cent in 2024–25 H1. GVA (Gross Value Added), which is growth on the supply side, was 6.2 per cent in 2024–25 H1, down from the 8 per cent mark in the same period for the previous two years.

Inflation (CPI-Combined) crossed the targeted upper threshold of 6 per cent in October 2024, with food inflation at an alarming 9 per cent. Food inflation this close to double digits was at a 14-month high. CPI inflation came down to 5.48 per cent in November 2024, with continued high food inflation at 8.2 per cent. Largely, inflation has been on a higher trajectory since 2020, above the mandated upper target of 6 per cent for as many as 25 months in the last four years.

It is plain that the Indian economy has had a bumpy ride in the year gone by, with many red and amber warning lights. The hope being expressed is that the ride will settle and pick up pace, an optimism reflected in the newly appointed RBI governor........

© National Herald