Is the Indian Economy Really Growing?
While GDP numbers are climbing, many Indians aren’t feeling the change. The focus keyphrase Indian economy struggling reflects a growing reality—rising inequality, jobless growth, and falling incomes per person are now hard to ignore. Let’s break down why this matters and where the pain points lie.
Top Reasons Why Indian Economy Is Struggling
1. Rising Wealth Inequality
- As per Oxfam India 2023 report, top 1% of Indians own over 40% of the nation’s wealth.
- The bottom 50% share just 3%.
- India’s tax structure still favours the ultra-rich, with no inheritance tax or wealth tax currently.
2. Record-High Unemployment
- CMIE data shows India’s unemployment rate touched 8.7% in April 2024.
- Youth (15–29 age group) unemployment is worse—often above 20%.
- Job creation has lagged behind the working-age population.
3. Demonetisation & GST Shocks
- Demonetisation (2016) wiped out liquidity for small traders and daily wage earners.
- GST rollout (2017) lacked preparedness—especially hurt the informal sector.
- Even by 2025, lakhs of MSMEs remain non-compliant or deregistered, facing complex paperwork.
4. GDP Up, But Per Capita Income Flat
- India’s GDP is growing, but per capita income stagnated around ₹1.72 lakh (2023–24, MoSPI).
- Inflation-adjusted income paints a grim picture for middle and lower class households.
- Rising fuel, food, and healthcare costs are eroding purchasing power.
5. Policy Centralisation & Weak Implementation
- No clear fiscal roadmap despite rising deficits.
- RBI’s growth projections often get revised mid-year.
- Over-dependence on central schemes, less real reform in land, labour or judicial backlog.
Government Clarifications vs Ground Reality
| Metric | Official View | Ground Reality |
|---|---|---|
| GDP Growth (FY 2024–25) | 7.2% (as per RBI and MoSPI) | Skewed—top-heavy with limited mass benefit |
| Inflation (CPI) | Under 5% (official data) | Food and fuel inflation much higher |
| Employment | PLFS shows marginal improvement | CMIE & field data show high underemployment |
| Tax Compliance | E-invoicing, GSTN reforms in place | MSMEs find compliance costly & complex |
Expert View: Why This Disconnect Exists
“India’s problem is not lack of ideas—it’s execution deficit. We’ve centralised policy power but weakened local economic drivers. Real reform means investing in people, not just infra headlines.”
— Anupam Manur, Economist, Takshashila Institution
Focus Keyphrase: Indian Economy Struggling – What Needs to Change?
- Progressive Tax Reforms: Reintroduce wealth tax or inheritance tax for top 0.1%
- Decentralised Job Programs: States need flexibility, not one-size-fits-all schemes
- Revamp MSME GST Regime: Simplify filing, restore amnesty, and ensure working capital flow
- Targeted Spending: Increase healthcare, education, and skilling budgets
- Real-time Data Transparency: Make CMIE-type employment data publicly supported
FAQs
Q1. Is India’s GDP still growing fast?
Yes, but growth is uneven—large corporates are growing faster than household income or MSMEs.
Q2. Why is unemployment not improving despite schemes like PLI or PMEGP?
Because many of these schemes create capital-intensive jobs, not labour-intensive ones.
Q3. Has GST helped India’s economy?
For large businesses, yes. For small traders, many still face compliance burdens and cash flow issues.
Q4. Is India becoming more unequal?
Yes. Reports from Oxfam and World Bank highlight rising wealth concentration.
Summary
The Indian economy is struggling beneath rising inequality, jobless growth, and weak income levels. GDP looks strong, but per capita income is flat. Find out why and what can be fixed.
Closing Thoughts
GDP growth is not enough if jobs don’t grow and income doesn’t reach the common Indian. If you’re a taxpayer, business owner, or consultant navigating this volatile economic environment, Efiletax can help you stay compliant and financially prepared.