Paper: GS – III, Subject: Indian Economy, Topic: Growth and Development, Issue: India’s Economic Growth.
Context:
U.S. President Donald Trump announced 25% tariffs on India and a potential penalty for its military and energy deals with Russia, later stating on social media he didn’t care if both economies collapsed.
Key Takeaways:
Economic Growth: A Comparative Analysis:
- Recent statements questioning the health of India’s economy necessitate a data-driven examination of its performance relative to other nations.
- While criticisms may stem from trade negotiations or geopolitical considerations, it’s crucial to assess the objective economic indicators.
- The International Monetary Fund (IMF) data on Gross Domestic Product (GDP) over the past three decades (1995-2025) provides a clear picture.
- India’s economy has grown almost 12 times its size in 1995, demonstrating significant expansion.
Growth Relative to the US:
- Only China, India, and Russia have grown in size relative to the US economy.
- India’s economy has increased from less than 5% the size of the US economy in 1995 to almost 14% in 2025.
- America’s major trade partners have shrunk in size relative to the US.
- These figures contradict the notion of a “dead” economy.
- India’s growth trajectory is undeniable, particularly when compared to other major economies.
Concerns and Challenges for India’s Economy:
Conclusion:
- While India’s economy is far from “dead,” it faces significant challenges that need to be addressed. Sustained and inclusive growth requires policy interventions to boost manufacturing, address agricultural distress, reduce inequality, improve human development outcomes, and enhance skills development.
- By tackling these challenges, India can unlock its full economic potential and ensure a more prosperous future for all its citizens.
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