Investment for voters, manufacturing for consumers.

"India's economy expanded at a lower-than-expected 5.4% in the three months ended September, with sluggish growth in manufacturing and private consumption, a reflection of weak demand because of high borrowing costs, inflation and weak real wages growth." "The headline GDP growth number is 1.3 percentage points lower than the June quarter print and the lowest in seven quarters." HT.  "Indian wages contracted last quarter for the first time since the pandemic, curbing the economy's breakneck speed as consumers cut spending and corporate profits slumped, Bloomberg reported." "Consumers are now cutting back on everything from soaps to cars." ET. "India's economic growth is expected to accelerate to 6.7% in the second half (H2) of the fiscal year, bringing the full-year 2024-25 GDP growth to 6.4%, according to a report by JP Morgan." ET. "The second quarter GDP growth slump should not really have come as a shock, because the underlying consumption trends have been flashing red for a while now." "What is important to focus on is the significant slowdown in urban consumption, even as some green shoots of rural consumption revival have been noted." This is not surprising because "there has been almost no growth in organized sector jobs. India had 44.79 million people registered in the organized sector in FY13, which rose barely to 45.72 million in FY23." "In fact, in FY16, the organised jobs tally was 48.26 million." CNBC. If jobs growth is stagnant and real wages are declining, which are reflected in weaker demand, there is no need to increase manufacturing output. "The HSBC final India manufacturing, Purchasing Managers' Index, compiled by S&P Global, fell to 56.5 last month from 57.5 in October." "The output and new orders sub-indexes fell to their lowest and second lowest this year." "An uptick in demand from abroad was noticed for Indian-made goods. International demand rose at the fastest pace since July." Reuters. The share of manufacturing in India's economy has averaged about 17.7% since 2010. In 2014, it was 17.3%. "As the economy expanded over the years, the share of agriculture declined while that of services rose. The share of manufacturing has never reached even 20%," wrote Prof Vidya Mahambare. "A recent World Bank report pointed out that India's share of global exports of apparel, leather, textiles and footwear (ALTF) rose from 0.9% in 2002  to 4.5% in 2013, only to fall to 3.5%. Even as China's dominance in the sector started to slow down by 2015,..the benefits went to Bangladesh and Vietnam rather than India." The reason is that India lacks large factories with more than 300 workers which increase productivity and bring down costs. "A chief executive of a large firm...admitted that the company would be more competitive internationally if its plant sizes were greater, but it deliberately chose not to grow because of the need to spread risks - legal and political - across multiple firms." Mint. In India, "From the politician's point of view, the choice of subsidy recipient should balance political and commercial factors." "A policy that doesn't win votes is generally dead on arrival." "When left to themselves, for example, foreign investors usually drift toward India's developed southern states. Yet newer investments in the semiconductor sector - made possible by the billions of dollars that the government has set aside - seem to be going to regions more closely associated with Modi's Bharatiya Janata Party," wrote Mihir Sharma. A shackled economy cannot grow. Remove them.