REFORMS IN BITS & PIECES

Lifting the potential GDP growth to over 8%, the minimum required rate for achieving developed economy status by 2047, warrants factor and institutional reforms

- GN Bajpai

Head into the New Year with India continuing to be the fastest growing large economy in a world marked by challenges.

The latest World Economic Outlook of the International Monetary Fund (IMF) indicated a continued slowdown in global economic growth, with risks remaining tilted to the downside. This came amid the disruptions brought by US tariffs, which also brought 25% extra tariffs on Indian goods, making it a total of 50% on goods exported by India to the US. On 28 November 2025, the National Statistical Office (NSO) announced 8.2% GDP growth for Q2 of FY26. The growth in the face of a global slowdown, the punishing Trump tariffs and the 7.8% GDP growth of Q1 FY26, is noteworthy. GDP growth has been contributed by all three sectors of the economy ~ primary-agriculture at 3.5%, secondary-industry at 7.7% & manufacturing at 9.1% and tertiary-services at 9.2%, indicating that the core of the economy is robust.

Skeptics about these numbers and the upgrade in the GDP growth rate are not far to seek. Recently, the IMF rated India’s GDP data quality as ‘C’, a low mark. “Economic change in all periods, depends more than most economists think, on what people believe,” wrote Joel Mokyr, the 2025 Noble Laureate in Economics in the opening of his book, “The Enlightened Economy: An Economic History of Britain 1700-1850,” published in 2010. We may ask: what do people believe in the case of the India growth story?