A Deeper Look
Former Reserve Bank of India Governor Raghuram Rajan believes India's true growth rate might be lower than official figures suggest. He argues that if we remove the "fluff" from the numbers, the actual rate could be closer to 6-6.5%, rather than the reported 8-8.5%.
Rajan emphasizes the need for sustained 9-10% growth to achieve developed nation status by 2047. However, he questions why inflation isn't rising alongside the reported growth. He points to the anomaly of surplus labor in agriculture, indicating low productivity and lack of job opportunities elsewhere.
He highlights the struggles of India's labor market, evidenced by the high number of people seeking government jobs. Rajan notes that manufacturing growth is concentrated in capital-intensive sectors, neglecting the labor-intensive ones.
He cites the example of two-wheeler and four-wheeler sales, indicating that demand hasn't fully recovered post-pandemic. This, coupled with the slow growth of two-wheeler sales, suggests insufficient job creation.
Rajan paints a picture of a two-faced economy. One face showcases the promise of "China plus one" and Apple's investments. The other reveals a struggling middle and lower-middle class desperately seeking work.
In conclusion, Rajan urges a deeper analysis of India's growth story, focusing on real indicators and addressing the challenges faced by the majority of the population. Only then can the country achieve its true potential and become a developed nation.