Prior to the election results, Prime Minister Narendra Modi made a tweet on ‘X’ acknowledging the 8.4% GDP growth that India witnessed in Q3 2023-2024 and promised an economy that aimed at helping 140 crore Indians to lead a better life and thereby create a Viksit Bharat. Amidst the backdrop of the 2024 Lok Sabha Elections, political leaders from the ruling and the opposition government have used the term Gross Domestic Product (GDP) in different contexts. Evaluating actual economic progress requires a dual approach that analyses the implications of GDP on India’s present economy and its limitations in addressing other socio-economic problems, thereby enabling the public to make a calculated decision. Firstly, let us understand what GDP is and how to calculate it. GDP measures the monetary value of all those goods and services produced and marketed within the country by summing personal consumer expenditure, government spending, capital formation, and net exports. India’s current GDP is estimated to be around 3.7 trillion USD, characterised by an 8.4% growth rate, making it one of the fastest-growing economies in the world. This growth rate has become a number-centric answer used by various elected representatives to questions like “By how much has the economy grown?” or “Are we on the path of becoming a first-world country breaking the existing order of developed nations?” However, other social, environmental, and humanistic indicators reveal an account that goes beyond India's present monetary health. Under the veil of an exceptional GDP rate lies the reality of prevailing poverty, unemployment, and illiteracy levels bundled up with the subpar quality of life and limited access to healthcare services, food, shelter, etc. Unemployment among the youth and low participation of women in the workforce are of widespread concern and need redressal. Though GDP signifies that the per capita income has risen from 30% to 42% in the last two decades, it gets misused in the political discourse to imply that the gap between the poor and the rich is being bridged. However, if that were true, various economists would not recommend imposing a moderate inheritance tax on India’s rich to utilise the money collected to promote economic equity. Posing increased investments as one of the critical indicators of a booming economy has been a stable trend for any contesting political party, but shedding light on the investment figures reveals that despite an increase in public investment, a similar expected increase in private-sector investment has not been accompanied. This implies increased pressure on the government to balance capital spending and spending on welfare schemes -- with one of the two facing blunt neglect. Farmers, the lifeblood of the Indian economy, increasingly find themselves in a sticky situation where, on the one hand, the agricultural sector's contribution to the nation’s GDP is declining. Its failure to be substituted by increasing employment in the manufacturing sector has led to an overall depressing state of farmers' incomes, which might explain the rising numbers of farmer suicides. Therefore, the question is: Do we want an economy where 1% of the total population lies on top of 22.6% of the cumulated income? Do we consider only GDP a prime indicator of a political party’s role in driving India’s success? Do we limit the economy solely to its monetary value, stripping it of any socio-economic value driven by factors like education, employment opportunities, and improved quality of life? The public says no. As evidenced by the 2024 election results, the Bharatiya Janta Party (BJP) had garnered a reputation for being the leading factor of driving economic development in India. However, they were unable to win the parliamentary majority required to form the government this time, unlike the 2019 elections. Despite GDP growth, the deep concern of 83% of unemployed youth, owing to the job crisis and the food insecurity arising from the rise in inflation, impacted the voters' decisions more than the party had anticipated. Further, the lack in addressing these social and economic issues in its election campaigns might have pushed the citizens to favour the opposition. Now, after the NDA win, the country looks forward to the ruling government to stand up to its economic promises as made in the mandate of helping farmers, raising exports, increasing job availability for the youth and moving India from the 5th largest economy to the 3rd largest in the world.
06 Jun 2024
Paridhi Minda
