Is the Indian economy really doing well?

During the runup to the 2024 parliament elections, this writer came across many young men raging over unemployment and the indifference of the authorities towards them. In UP, which is again going to have bye-elections to 9 assembly seats the results will come out on November 23, the anger of the young unemployed or under-employed was palpable. In Prime Minister’s constituency of Varanasi, it was possible to hear the local youth, unimpressed by the infrastructure work in this temple town, worry about how the examination papers to select them for government jobs were routinely leaked and their induction process put in abeyance. It was a dark and grim future they had to contend with. Since then nothing much has happened in terms of shoring up their plummeting fortunes, but the rating agency Moody is showing growth of GDP as 7.2 percent allowing PM and FM to display swagger at the good work they were doing even though nothing really had changed since the BJP led NDA performed so abysmally in the general elections earlier this year. 

Besides the raging unemployment, which is at a 5 year high, there are enough indicators to suggest that all is indeed not well with the Indian economy. Its apocalyptical how many Indians belonging to different strata of society are escaping to the west. This just does not mean to only the US, Canada and Europe, but also to Dubai, UAE and rest of of the world. Indians just do not want to enjoy the Ram Rajya created by the government of Narendra Modi. Is this flight of Indians to the West captured by the high rate of growth of GDP that our bureaucrats and ministers usually flaunts?

Similar contradictions are visible in the manifest fall in national consumption. The consumption of all the goods  that are consumed by the middle and lower middle class fell quite dramatically. Two wheelers and inexpensive four wheelers had fewer takers than those buying high end vehicles. The same logic is playing out when it comes to accumulated inventory of two bedroom apartments meant for the middle income group. Also in non- metro cities, these houses are piling up as people do not have the funds to buy a house. Instead there is a great demand in Mumbai, Delhi for high end houses. In Bengaluru, for instance, the demand for house has mellowed considerably since its peak some months ago. It is one of the cities that capture the slowdown through different indicators.

A renowned economist when queried about the state of the economy is succinct in his response: “ it’s bad and will get worse in the coming days”.

The government does not give traction to bad news so we have nothing really authoritative on what really is driving the GDP to new heights. It’s not that the number of rich people are dwindling. Au contraire, they are soaring- especially from the state of Gujarat, which is also the scene of an exodus for all those who are leaving the country. By the estimate of a national newspaper: About 4 Gujaratis enter US every hour, perhaps left out of the wealth privileged Indians are creating for themselves. The riches people are getting from one state, border on the absurd. All the projects, allegedly meant for other states are pushed to Gujarat. From the bullet train to the semi-conductor plant to manufacture of aircrafts in the private sector, the promoters/investors are either enticed through promise of institutional finance on easy terms or pressured to put up their factories and facilities in this western state. In Varanasi, the resentment was quite evident with many local people alleging that all the major projects in this temple town have been handed over to Gujaratis. There are suggestions that the number of billionaires from Gujarat has doubled since 2014, when the BJP led by Modi and Amit Shah came to power.  Such allegations get plenty of space on social media. In Maharashtra, the opposition, Congress party, pleaded that the voters should vote for Maharashtra and not Gujarat, which meant the BJP. It remains to be seen how the voters reacts to this allegation which allegedly is making Gujarat wealthier at the expense of other states- mostly from Southern and Western India.

Despite these contradictions that stare at us, there is little comfort for those who clutch at the figures for sustenance. Take for instance, all the funds that are moving out of the country that had come as foreign portfolio investment(FPI) and that had given a bounce to the stock market, In October 2024, about a lakh crore rupees left the shores of India. The phenomena continues. Some attribute it to the  foreign funds moving to China after Beijing announced a stimulus to fight off an anticipated high tariff that US under new President Donald Trump wants to slap on them. This is not the only reason as it hides the structural problems intrinsic in the Indian economy.

Visibly, the biggest manifestation of the growing poverty is the fact that the Indian government feeds 800 million people on a daily basis as they do not have enough to put two square meals for their families. These reside more in North and Eastern part of India. The southern states, in comparison, look wealthier and physically robust in comparison to their Northern or Eastern counterparts. This north- south divide has triggered off a debate on the strategy needed to bridge the economic and social chasm between the two regions. And on all counts, the religion based, nationalist model that the BJP flaunts comes a poor second. It is exclusionary and based on hatred that leaves believes in leaving many people behind.

How are the educated unemployed surmounting manifest inefficiencies and inadequacies that prevent them from getting jobs. Besides, trying to escape to the US and the West, the angry and desperate Indian youth are even getting pulled in to fight this non one’s war in Ukraine and Russia. For the lure of good money and promise of residency and possibly marriage to a local girl, these, these young men can be found in Europe. Similarly, there are many who are fighting on behalf of the Israeli defence forces (IDF). If life would not have been so arduous, these young men would not have gone so far to earn a living or worse work to repay the loans their parents took to educate them. It’s a painfully tragic life, but the unemployed youth have little options. Many of those who cannot cross the border to travel abroad are putting their phones to good use trying to make a fast buck either by using apps to play cricket through Dream 11  or the stock market. Investing in stock market seems easy, but with lax regulation as witnessed in the case of Securities and Exchange Board of India (SEBI), there is a possibility of many impressionable youth losing all their money. In the last 3 years the total number of those invested in the stock market has grown to 10 crores. If something goes wrong then its will be an unimaginable catastrophe. Congress leader, Rahul Gandhi have been running a campaign on how the stock markets are poised to hurt the gullible as they are a handmaiden of the rich and powerful. The bewildering part is no one is really listening to his advice.

(Cover Photo: Economic Disparity | Courtesy: Canva)

SANJAY KAPOOR is a Senior Journalist based out of Delhi. He is a foreign policy specialist focused on India, its neighbourhood and West Asia. He is the Founder and Editor of Hardnews Magazine. He is a Member of the Editors Guild of India (EGI) and, until recently, served as the General Secretary of EGI.