Content
- India’s economic churn, the nectar of growth
- Giving wings to India’s youth
India’s economic churn, the nectar of growth
Civilisational Lens
- India has long believed trial precedes triumph (Samudra Manthan metaphor).
- History of renewal from crises:
- 1991 crisis → Liberalisation reforms.
- COVID-19 → Digital surge (UPI, DBT, digital adoption).
- 2025 doubters’ narrative (“dead economy”) → GDP surge & resilience.
Relevance : GS 3(Indian Economy – Growth and Development , Economic Reforms)
Practice Question : India’s economic journey has often transformed crises into opportunities. Discuss how India’s post-1991 and post-COVID reforms shaped its current growth trajectory. (Answer in 250 words)
Latest Growth Data (Q1 FY 2025–26)
- Real GDP growth: 7.8% (five-quarter high).
- Nominal GDP growth: 8.8%.
- Broad-based GVA growth (7.6%):
- Manufacturing: 7.7%.
- Construction: 7.6%.
- Services: ~9.3%.
- Drivers: Rising consumption, strong investment, logistics reforms, steady public capex.
Global Positioning
- World’s 4th largest economy, fastest-growing major economy.
- Outpacing US & China in growth rate.
- On trajectory to overtake Germany → 3rd largest economy (by end of decade).
- Global contribution:
- Currently → 15% of incremental world growth.
- PM’s target → 20%.
Market Confidence & Ratings
- S&P Global upgrade (2025) → India’s 1st sovereign rating upgrade in 18 years.
- Reasons: robust growth, monetary stability, fiscal consolidation.
- Impact: Lower borrowing costs, wider investor base.
- Punctures “dead economy” narrative → independent validation of resilience.
Inclusive Growth & Poverty Reduction
- 2013–14 to 2022–23: 24.82 crore people exited multidimensional poverty.
- Enablers:
- Universal basic services → Jan Dhan accounts, Ujjwala (LPG), Ayushman Bharat, Har Ghar Jal.
- Direct Benefit Transfers (DBT) → empower poor with choices.
- India’s model:
- Built on democracy + federalism + consensus.
- Slower to announce, but faster to implement & more durable.
- Contrast: Authoritarian “sprints” vs. India’s “marathon” economy.
Energy Security as Growth Backbone
- India’s energy profile:
- 3rd largest energy consumer.
- 4th largest refiner (5.2 mbpd capacity).
- 4th largest LNG importer.
- Roadmap:
- Refining capacity → 400 MTPA by 2030.
- Energy demand → will double by 2047, making up ¼ of global incremental demand.
- Exploration push:
- Acreage ↑ from 8% (2021) → 16% (2025), target 1 mn sq. km (2030).
- “No-Go” areas ↓ by 99%.
- OALP (Open Acreage Licensing Policy) → transparent bidding.
- Gas pricing reforms → incentives for deepwater/new wells.
Energy Transition
- Ethanol blending:
- 1.5% (2014) → 20% (2025).
- Savings: ₹1.25 lakh cr forex + ₹1 lakh cr paid to farmers.
- Compressed Biogas (CBG):
- 300+ plants being rolled out.
- Target: 5% blending mandate by 2028.
- Green Hydrogen: Oil PSUs investing in projects.
- Balanced stance: Energy security + energy transition.
Russia Oil Import Debate
- Fact check:
- Russian crude not sanctioned like Iran/Venezuela; only price-capped.
- India’s imports compliant with G-7/EU rules (shipping, insurance, audit).
- India has always been 4th largest petroleum exporter (pre-Ukraine war).
- Role of India:
- Stabilised markets → prevented $200/barrel oil shock.
- Exports kept global supply chains running (even Europe sourced refined fuels from India).
- Domestic shield:
- Oil PSUs absorbed losses (~₹10/litre diesel).
- Tax cuts, export rules to protect domestic supply.
- Ensured stable retail prices.
Industrial & Digital Revolution
- PLI Schemes + Gati Shakti → boost in semiconductors, electronics, defence, chemicals.
- Semiconductors:
- 4 new fabs approved (2025).
- PM’s visit to Japan → Japanese investments in resilient supply chains.
- Digital economy:
- UPI → global leader in real-time payments.
- Startups → exporting services & solutions.
- Digital rails + hard infra = lower costs, higher formalisation, faster growth cycle.
The Scoreboard of Success
- EY projection (2038): India → 2nd largest economy (PPP terms), GDP > $34 trillion.
- Historic parallels:
- Green Revolution → food self-sufficiency.
- IT Revolution → services hub.
- Now → Digital + Clean Energy + Manufacturing revolutions.
- Civilisational ethos: Vasudhaiva Kutumbakam → balancing growth, stability, inclusivity.
- Viksit Bharat 2047:
- Not just aspiration, but a “deliverable”.
- Growth → rapid, democratic, inclusive, sustainable.
Giving wings to India’s youth
Civilisational and Philosophical Basis
- Shram Shakti (labour power) = backbone of India’s development.
- Economic progress not just GDP-driven, but rooted in employment creation, social security, and dignity of labour.
- Employment = dignity + equality + national strength (aligns with Directive Principles of State Policy).
Relevance : GS 3(Economic Development & Employment)
Practice Question : Employment in India is not merely an economic indicator but a foundation of social stability. Analyse this statement in light of India’s demographic dividend. (250 words)
Economic Transformation (2014–2025)
- Global ranking:
- 2014 → 10th largest economy.
- 2025 → 4th largest economy.
- Human resource role: Critical in driving both consumption & production.
- Jobs data (RBI-KLEMS):
- 2004–14 → 2.9 crore jobs created.
- 2014–24 → 17 crore jobs created (≈6x increase).
- Formalisation trend:
- EPFO enrolments show surge in formal jobs.
- Higher labour force participation in organised sector.
Social Security Revolution
- Coverage expansion (2015 → 2025):
- 2015 → 19% of population under at least one social protection scheme.
- 2025 → 64.3% coverage (94 crore beneficiaries).
- Today → 2nd largest social security system globally.
- Acknowledgment: International Labour Organization (ILO) calls it among the fastest expansions globally.
- Instruments:
- PM-SYM, PM-JAY, PMJJBY, APY, PM-KISAN, and E-Shram.
- Integration through DBT + JAM trinity ensures transparency, reduces leakages.
Demographic Dividend & Challenges
- 65% of India’s population < 35 years → massive demographic dividend.
- Challenge: If not utilised, risk of demographic disaster.
- Global contrast:
- India → youthful workforce.
- West/China → ageing populations.
- Structural vulnerabilities:
- Automation, AI disruptions.
- Global supply-chain shifts.
- Gig/platform economy creating precarity.
Employment as Nation-Building
- Employment is not just an economic indicator but a foundation of social stability.
- Requires:
- Youth employability (skills + training).
- Integration into formal economy.
- Financial literacy.
- Robust social security net.
- Aim → Convert Yuva Shakti into true national dividend.
Pradhan Mantri Viksit Bharat Rozgar Yojana (PMVBRY)
- Launched: Union Budget 2024–25, PM’s Independence Day 2025 speech.
- Outlay: ₹1 lakh crore (largest in India’s history).
- Target: Create 3.5 crore jobs in 2 years.
Unique Architecture
- Dual focus: workers + employers.
- Part A (Workers):
- Direct incentive → up to ₹15,000 for first-time employees (2 instalments).
- Ensures new entrants are linked to social security from day one.
- Part B (Employers):
- Incentive → up to ₹3,000 per new hire per month.
- Reduces hiring risks & encourages formalisation.
Structural Shifts
- From scheme-based support → ecosystem-building.
- Integrated with:
- PLI scheme.
- National Manufacturing Mission.
- Make in India.
- Digital India.
- Encourages competitiveness + inclusivity simultaneously.
Wider Implications
- Formalisation push: New jobs directly tied to EPFO/ESIC → strengthens social security net.
- Equity impact: Even small enterprises & informal workers included.
- Competitiveness: Reduces cost for firms, boosts manufacturing.
- Atmanirbhar Bharat: Employment generation linked to self-reliance, especially in manufacturing hubs.
Strategic Importance
- Employment policy as macroeconomic stabiliser: Raises consumption demand → multiplier effect.
- Social cohesion: Job dignity reduces inequality & unrest.
- Global competitiveness: Strong workforce base → strengthens India’s case as global manufacturing hub.
- Long-term transformation: Converts demographic dividend → Viksit Bharat 2047.
Critiques & Challenges
- Execution risks: Past schemes (e.g., MGNREGA, NAPS) faced delays & leakages.
- Quality of jobs: Risk of low-wage, low-productivity employment unless skills match demand.
- Regional imbalance: Jobs may concentrate in industrial states, bypassing lagging regions.
- Automation & AI: Could limit manufacturing-led employment growth.
- Need for reskilling: Skill gap may limit scheme’s effectiveness.
