India’s economy grew by a remarkable 7.8 per cent in the April-June quarter, comfortably exceeding expectations. Yet the celebration has been accompanied by an uncomfortable question: why does such rapid growth fail to generate a corresponding sense of economic confidence among many Indians? The answer is not that the growth number is false. The new GDP series, introduced with a revised base year and improved methods of measuring output and prices, has been defended by the government and received support from the IMF.

Manufacturing grew 9.2 per cent and services 10 per cent in the quarter, while investment and consumer demand also contributed. The real problem is that GDP measures production, not prosperity. An economy can expand rapidly without distributing its gains evenly or generating enough secure, well-paid employment. This distinction matters in India, where millions of young people enter the workforce every year and where the quality of employment matters as much as the number of jobs.

That helps explain the strange coexistence of impressive macroeconomic statistics and economic dissatisfaction.........

© The Statesman