How is Indian economy faring?

WE NEED RIGHT FUNDAMENTALS FOR MEANINGFUL GROWTH; INDIA MUST MODERNISE STATISTICAL ARCHITECTURE

- ASHOK GULATI BIDISHA CHANDA

ONLY A FEW months back, President Trump called India’s economy a “dead economy”.

But the GDP growth numbers for the second quarter (Q2FY26) at 8.2% not only suggest how ignorant his remarks were, but also surpassed the majority view of Indian economists. However, even as we may celebrate this, the International Monetary Fund (IMF) has quietly handed a “C” grade to the very national accounts that underpin this claim. In its staff report on India dated November 26, the Fund notes, in characteristically diplomatic language, that“the data provided to the Fund have some shortcomings but are broadly adequate for surveillance”. That should make us pause. If there are some shortcomings in data, we need to be more transparent to earn global trust in our final GDP numbers. It is important as global investors make their investment decisions based on the credibility of the information on performance of the economy, besides political stability. This transparency in data is also important to silence domestic critics who always try to paint a negative picture on the economic front.

Two questions are important when we look at India’s growth story beyond GDP numbers. First, is this growth creating enough productive jobs in the formal sector? And second, how green is this growth? These are critical questions if growth has to have any positive meaning for the masses. Let us try to dig a bit deeper.