Wednesday, January 31, 2024
It's only words.
"In its review of the Indian economy released,...the finance ministry said India can become a $7 trillion economy by 2030." "It also said that India is in a better place economically due to the government's nassive infrastructure spending (which grew 3.3 times in the last 10 years), healthy financial sector, strong household financial health, an inflation that is under control and fiscal deficit that is trending lower." However, "To become a $7 trillion economy by 2029-30, experts say that India's nominal GDP must grow at a compound annual growth rate (CAGR) of 11.9% from 20223-24 to 2029-30," or add $572 billion every year when India has added $190 billion per year in the past decade. "Finance ministry...said the Indian economy has remained resilient amid global headwinds and robust domestic demand," and "inflation has been reined in within 2-6% band because of steps taken by government and RBI." TOI. The average annual inflation in the consumer price index (CPI) has been 6.6% in 2020, 5.1% in 2021, 6.7% in 2022 and 5.7% in 2023. RI. Hardly a triumph. "While India has managed to keep its food inflation at moderate levels and lower than many large economies, the review of the Indian economy...said that the agriculture sector has performed consistently well." FE. Again, not true. Food inflation has been positive, reaching above 10% in some months since 2020. TE. Since inflation compounds year-on-year, food prices are much higher. "The average Indian household will spend 35.3% of total household budget on food in 2025, increasing by 2.1 percentage points from 33.2% in 2005, Fitch solutions said." The Print. Of course, this will vary widely as the poor, who earn their living from physical labor, need to eat much more than the rich do. Perhaps, in recognition of high food prices, the Prime Minister has announced, "Free food grains for 81.35 crore (813.5 million) beneficiaries for five years," at a cost of Rs 11.80 trillion. pib.gov.in. High prices of consumer goods and services are reflected in "India's Goods and Services Tax (GST) revenue for January 2024 has surged to Rs 1.72129 trillion, reflecting an impressive 10.4% Year-on-Year growth." This was the second-highest ever and "With a cumulative gross GST collection of Rs 16.69 trillion for the ten-month period from April 2023 to January 2024, there is a robust 11.6% Y-on-Y growth." ET. Since GST is levied as a percentage of the final price, we have paid 11.6% more in 10 months. "Reuters interviewed nearly 50 families in rural areas... in three Indian states - Uttar Pradesh, Odisha and West Bengal - and 85% of them reported stagnant or lower incomes compared to the years before the pandemic. They said inflation was high and was forcing them to borrow money to sustain already reduced consumption." Do people really vote for words rather than their own experience? If so, they must be stupid. Or Bhakts. Same thing, really.
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