Showing posts with label indian economy. Show all posts

Friday, September 5, 2025

Why India’s 40% GST on Zero-Sugar Beverages is Bad Policy — And Should Not Be Treated Like Tobacco or Pan Masala

Why India’s 40% GST on Zero-Sugar Beverages is Bad Policy — And Should Not Be Treated Like Tobacco or Pan Masala

India’s recent GST overhaul puts carbonated drinks — including zero-sugar, “diet” and “sugar-free” soft drinks — into the same 40% tax bracket as tobacco products, pan masala, and luxury vehicles. Ostensibly, the goal is to curb non-communicable diseases (NCDs) by discouraging unhealthy consumption. But lumping zero-sugar sodas with genuinely harmful goods is a mistake that undermines both public health and economic logic.

Sugar-Free Is Not Sin: Understanding the Science

Let’s get the facts straight. The scientific case for taxing sugar-sweetened beverages (SSBs) is robust: high consumption of sugary drinks increases risk for obesity, diabetes, and dental decay. The World Health Organization (WHO) and governments worldwide have endorsed sugar taxes to incentivize reformulation and healthier choices.

But shifting to sugar-free alternatives is exactly what such policies are supposed to encourage. Research from the UK shows that sugar taxes, when designed right, led to a 46% reduction in the sugar content of soft drinks due to massive industry reformulation — all while low- and zero-sugar variants multiplied on supermarket shelves and became the “default” for many consumers.

The harm is in the added sugar, not the fizz, color, or presence of non-nutritive sweeteners like aspartame or sucralose. If policy treats all carbonated drinks as equally “sinful,” then it punishes both reformulation and consumer effort to cut sugar — a perverse outcome.

Zero-Sugar: The Benefits and Busting the Myths

1. Weight and Metabolic Health:
Randomized controlled trials consistently show that substituting sugary sodas with diet or zero-calorie drinks supports weight loss and better glycemic control, without raising blood glucose — crucial for diabetics or those at risk. No, zero-sugar sodas do not “make you fat,” as some headlines claim. The strongest causal evidence says they help weight management compared to their sugary counterparts.

2. Dental Health:
Free sugars are the main driver of dental caries worldwide. Sugar-free alternatives don’t feed dental bacteria that cause decay. Acidity in all sodas still poses risks to teeth, but this is far less damaging than the potent effect of sugar.

3. Sweetener Safety:
What about aspartame and cancer headlines? Both the WHO/FAO Joint Committee (JECFA, 2023) and the European Food Safety Authority (EFSA) have reviewed the evidence exhaustively and reaffirmed that aspartame, sucralose, and permitted sweeteners are safe within accepted daily intake limits for humans. No regulator has found credible evidence of harm from typical consumption.

Why the 40% GST Slab is a Mistake

Misclassifies the real harm: Putting zero-sugar sodas in the same category as cigarettes, pan masala, or low-tariff sugar confections (which often face just 5% GST) confuses the actual health target. The aim is reducing added sugars, not penalizing the act of drinking sparkling water mixed with non-caloric flavor.
Removes incentive to reformulate: International best practice — like the UK Soft Drinks Industry Levy — taxes by sugar content, explicitly rewarding companies that cut sugar and encouraging consumers to make better choices. Blanket taxes on all carbonated drinks make that incentive vanish
Distorts prices, hurts consumers: Lower-income groups are hit hardest by regressive “sin” taxes. Making healthier substitutions more expensive removes affordable, lower-calorie options.
Undermines credibility: When mithai or high-sugar sweets are taxed at much lower rates than sugar-free sodas, the GST regime sends mixed signals and loses credibility as a tool for public health, not just revenue.

The Way Forward: Tax Sugar, Not Substitutes

India should adopt a sugar-threshold approach for beverage taxation, as recommended by WHO and proven effective worldwide:

Tax only those beverages that exceed clear sugar-content thresholds (e.g., ≥5g/100ml and ≥8g/100ml), and exempt zero-sugar/zero-calorie drinks entirely, or tax them at the standard GST rate.
Pair SSB-tax revenues with investments in clean water and NCD prevention — making the policy a “win-win-win” for health, budgets, and fairness

Bottom Line

Zero-sugar sodas should never be in the same tax basket as tobacco or high-sugar soft drinks. Public health policy must reward, not punish, efforts to cut sugar and improve diets. India has the opportunity — and the research — to get this right. Let’s tax the problem, not the solution.

References available on request. All facts presented here are based on the latest scientific evidence and the cited global policy experiences.

Monday, August 25, 2025

Goodhart’s Law and the Cobra Effect in India’s Policy Making

Public policy in India often suffers from a gap between intention and outcome. At the heart of this paradox lie two concepts from economics and social sciences — Goodhart’s Law and the Cobra Effect. Both capture how well-meaning metrics and incentives can backfire, especially in a diverse democracy where welfare delivery faces challenges of scale, leakages, and local adaptation.

Goodhart’s Law and the Cobra Effect: A Primer

Goodhart’s Law: “When a measure becomes a target, it ceases to be a good measure.” Once metrics are linked to rewards, people start gaming the system rather than solving the real problem.
Cobra Effect: Named after colonial India, when the British offered money for every dead cobra to reduce their population. Citizens began breeding cobras to kill and sell for reward. When the policy was scrapped, the cobras were released, worsening the problem.

Both highlight how poorly designed incentives distort behavior and create perverse outcomes.

Case Studies from Indian Policy and Welfare Schemes

1. Learning Outcomes in Education

India’s school education policy historically measured success by enrollment and infrastructure — number of classrooms, midday meals, teacher recruitment. As per Goodhart’s Law, once these became targets, states focused on inflating enrollment and building structures, while learning outcomes stagnated. The ASER reports (2005–2022) consistently showed that even after years of schooling, many children struggled with basic arithmetic and reading.

2. MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act)

The world’s largest employment guarantee scheme aimed at providing 100 days of work per household. But linking performance to “number of person-days generated” led to inflated work records, ghost workers, and incomplete assets. Instead of durable rural infrastructure, the incentive system sometimes encouraged quantity over quality.

3. Janani Suraksha Yojana (Maternal Health)

Cash incentives to institutionalize deliveries reduced home births dramatically. But in several cases, women were rushed into hospitals for monetary reasons without adequate facilities or postnatal care. The target — numbers of institutional deliveries — became more important than the quality of maternal and infant health services.

4. Toilet Construction under Swachh Bharat Mission

The ambitious mission reported near-total household toilet coverage by 2019. However, several surveys revealed issues of toilet functionality, water access, and behavioral usage. The rush to meet construction targets often overlooked sustainability — showing the classic Goodhart’s Law trade-off between numbers vs. actual sanitation outcomes.

5. Fertilizer and Subsidy Policies

Incentives to increase foodgrain production during the Green Revolution led to overuse of urea subsidies, distorting soil health and groundwater tables. Farmers optimized to maximize subsidies and yields, not long-term sustainability — an unintended “cobra effect” that still burdens Indian agriculture today.

Why These Effects Persist in India

Target-driven bureaucracy — Officers are evaluated on achieving measurable outputs, not nuanced outcomes.
Political pressures — Short-term results look better in electoral cycles.
Scale of welfare schemes — With hundreds of millions of beneficiaries, central monitoring relies heavily on metrics.
Weak feedback loops — Ground-level realities are often masked by inflated reporting.
Resource constraints — Quantity becomes easier to track than quality.

The Way Forward: Designing Better Policies

Focus on outcomes, not just outputs — Eg. measuring literacy and numeracy skills instead of only school enrollments.
Build feedback loops — Independent social audits, community scorecards, and civil society participation.
Use technology smartly — Aadhaar-linked DBTs, geotagging assets, real-time dashboards to reduce gaming.
Align incentives with behavior change — Example: moving Swachh Bharat from construction to sustained usage through campaigns.
Flexibility and local adaptation — One-size-fits-all metrics often fail; decentralization can ensure context-specific outcomes.

Conclusion

India’s welfare architecture is massive and ambitious, but the lessons of Goodhart’s Law and the Cobra Effect remind us that badly designed metrics can derail even the best policies. True success lies not in ticking boxes but in improving lived realities — healthy mothers, educated children, sustainable agriculture, and dignified rural employment.

As India moves towards becoming the world’s third-largest economy, its governance must also mature from counting numbers to measuring impact.

Friday, August 15, 2025

India’s 35 Million–Strong Diaspora: Pride Without Power?

Every January, we celebrate Pravasi Bharatiya Diwas with pomp and pride. Politicians beam about the 35 million Indians abroad, often calling them “India’s ambassadors to the world.” We highlight the parade of Indian-origin CEOs — Sundar Pichai, Satya Nadella, Arvind Krishna — as proof that Indian talent dominates global boardrooms. We’ve even sweetened the deal with OCI cards, allowing them to keep a foot in the Indian door.

And yet, when it comes to protecting India’s core economic interests, this vast network has been silent — sometimes uncomfortably so.

The Test Case: US Tariffs

When the United States imposed tariffs affecting Indian goods — steel, aluminium, and later other sectors — New Delhi expected that the strong Indian-American presence, especially in policy circles and corporate corridors, might help soften the blow. After all, this is the same diaspora that India celebrates at every opportunity.

But there was no organized lobbying, no public campaign, no high-profile voices condemning the move. The Indian-American community, despite its political clout and economic influence, remained on the sidelines.

Why the Silence?

National Loyalty vs. Cultural Roots
Most diaspora members, especially those in positions of power, are now citizens of their adopted countries. When push comes to shove, their legal and political obligations lie there, not here.
Corporate Priorities Over National Affection
A CEO’s primary responsibility is to shareholders, not to the land of their birth. Supporting India against their own government’s trade policy is simply not in their job description.
Fear of Political Backlash
Openly lobbying against a domestic policy of their host country can invite suspicion, accusations of dual loyalty, and professional risk.

The Harsh Reality

We love to imagine that the Indian diaspora is a geopolitical asset, ready to rally for India in times of need. The truth is more sobering: diaspora influence is circumstantial. It can shine in cultural promotion, philanthropy, and bilateral business ties — but when a direct clash of interests arises, their loyalties will align with their passports.

This isn’t betrayal. It’s simply the reality of migration and assimilation.

Rethinking Our Approach

India must recognize that diaspora goodwill ≠ diaspora activism. We can still take pride in their achievements, but we must stop assuming they are a dependable lobbying force for India’s political battles. Instead:

Build our own institutional lobbying capacity abroad.
Strengthen government-to-government channels rather than relying on soft power alone.
Appreciate diaspora contributions where they are effective, but not confuse sentiment with strategy.

Conclusion

Our 35 million–strong diaspora is a source of pride, culture, and connection — but not a shield in economic warfare. They have built lives elsewhere, and when forced to choose, they will side with the nations that now claim their allegiance.

India can celebrate Pravasi Bharatiya Diwas, hand out OCI cards, and beam at the success of Indian-origin leaders. But let’s also accept the reality: in the moments of geopolitical friction, we stand alone.

Saturday, August 9, 2025

Brain Drain Isn’t the Villain You Think It Is

If you’ve been on social media lately, you’ve probably seen every group in India come up with its own pet theory on why people are leaving the country.

Caste-focused commentators insist it’s because of reservations.
Wealthy elites think it’s because the government “wastes” resources on freebies for the poor.
Middle-class warriors are convinced it’s all about potholes and bad roads.

Each narrative conveniently fits their worldview, but all miss the elephant in the room.

The uncomfortable truth? When $1 equals ₹86, the economic pull is irresistible. Even if Indian roads matched German autobahns tomorrow, skilled professionals would still emigrate. The wage arbitrage is simply too powerful to ignore — a software engineer earning $120,000 in Silicon Valley versus ₹12 lakhs in Bangalore faces a lifestyle differential that transcends policy grievances.

But here’s what the doomsday crowd won’t tell you: brain drain isn’t economic suicide for India.

The Numbers That Matter

Over 630,000 Indians emigrated in 2024 alone, contributing to the world’s largest diaspora of 35.4 million people spread across 180 countries. Yet this “loss” generates India’s biggest economic win: $135.46 billion in remittances in FY25 — a 14% jump from the previous year and the highest globally.

To put this in perspective:

India’s remittances are nearly double Mexico’s $68 billion (second place)
They offset 47% of India’s $287 billion trade deficit
Remittances have more than doubled from $61 billion in 2016–17
They exceed India’s total FDI inflows, making them the most stable source of external financing

18.5 million overseas Indians now work in advanced economies, sending money that sustains millions of households back home. The US alone contributes 27.7% of these flows, followed by Gulf countries at 38% collectively.

Beyond Money: Cultural Soft Power

The diaspora has transformed into India’s most effective cultural ambassadors. Diwali is now celebrated in New York’s Times Square thanks to Indian-Americans. London’s Southall, Toronto’s Little India, and Sydney’s Harris Park showcase Indian festivals, cuisine, and traditions to global audiences.

This isn’t just feel-good multiculturalism — it’s strategic soft power that:

Builds bilateral diplomatic ties through people-to-people connections
Attracts tourism and investment to India through positive branding
Creates business networks that facilitate trade and technology transfer
Influences policy in host countries favorable to India’s interests

The Brain Circulation Reality

Modern migration isn’t one-way hemorrhaging — it’s brain circulation. Many emigrants eventually return with global experience, capital, and networks. Even those who stay permanently often:

Invest in Indian startups and real estate
Collaborate with Indian institutions on research and innovation
Mentor Indian entrepreneurs through accelerator programs
Bridge technology gaps between India and developed markets

The Real Conversation We’re Avoiding

Yes, India loses talent. But focusing only on the loss while ignoring the ₹11+ lakh crore annual remittance inflow is economic myopia. The question isn’t how to stop emigration — it’s how to maximize the benefits while building domestic opportunities that eventually attract global talent, including our own, back home.

Countries like Ireland, South Korea, and China leveraged their diasporas as economic engines during their development phases. India is already doing this unconsciously — now it needs to do it strategically.

The brain drain debate needs nuance, not nationalist hand-wringing. When 630,000 Indians leave but 35 million Indians abroad send home $135 billion, maybe it’s time to reframe emigration from pure loss to complex opportunity.

Bottom line: Brain drain hurts, but diaspora dividends help — and the numbers prove the latter outweighs the former.

Monday, May 26, 2025

How Composite Indices Can Be Manipulated — and How to Build Them Right

Introduction

Composite indices like the Human Development Index (HDI) or India’s SDG Index by NITI Aayog are powerful tools. They summarize complex realities — like health, education, financial inclusion — into a single, digestible score. Policymakers, media, and the public often take them at face value to judge progress and make comparisons across states or countries.

But beneath the glossy rankings lies a fundamental risk: composite indices can be easily manipulated. By selectively choosing indicators, tweaking targets, or structuring weights, institutions can paint a rosier (or gloomier) picture to serve political or strategic narratives.

This article examines the problems and risks of such manipulation and lays out a set of best-practice safeguards — with real-world examples.

The Problem: Indices Can Be Cooked

1. Discretion in Indicator Selection

Every index starts with a question: What should we measure? But when agencies have wide leeway to choose or drop indicators, they can skew the results.

Example: NITI Aayog’s SDG Index includes “% of households with bank accounts” under Goal 8 (Decent Work and Economic Growth). While this may reflect financial inclusion, it’s also highly correlated with per capita income. Adding such indicators inflates scores for wealthier states without adding much new information.

2. Unequal or Implicit Weighting

Even if all indicators are “equally weighted,” stacking some categories with more indicators gives them disproportionate influence.

Example: If Goal A has 10 indicators and Goal B only 3, then Goal A effectively dominates the final score — even if both are supposed to be equally important.

3. Gaming Targets and Scales

Scores are often normalized between a minimum and maximum value (or a 2030 target). Agencies can set easier targets, raising state scores artificially.

Example: If you set a modest 2030 target for electrification that most states have already achieved, it becomes a free boost in the index.

4. Opaque Methodologies

When the indicator-selection process and scoring formulae aren’t publicly disclosed or frequently change without explanation, it opens the door to undetected manipulation.

Why This Matters

Manipulated indices can:

Mislead the public and media;
Reward poor performance or penalize real progress;
Undermine trust in public data;
Allow central authorities to favor certain states or policies.

As the saying goes: “What gets measured, gets managed” — so if the measurements are flawed, the management will be too.

Homegrown Metrics or Strategic Tailoring? India’s Divergence from Global Indices

In countries like India, the push for customized indices is often framed as a rejection of “Western-biased” methodologies. Policymakers frequently argue that global frameworks fail to capture India’s unique developmental context, prompting a preference for locally tailored alternatives. However, this shift also raises concerns about methodological cherry-picking. For example, in the SDG India Index, NITI Aayog diverged from several UN-recommended indicators. Instead of using standard global metrics like “proportion of seats held by women in national parliaments,” it included domestic metrics such as female police personnel or women’s participation in local bodies — often with more favorable numbers. Similarly, the National Multidimensional Poverty Index (MPI) uses twelve indicators (instead of the UN’s ten), introducing criteria like landholding and bank account access that tend to downplay rural deprivation. The Atal Innovation Mission’s index also deviates from the Global Innovation Index by heavily emphasizing incubators and startup counts — metrics that favor urban states — while downplaying patents or R&D spending. While such adaptations may reflect local priorities, they also give policymakers room to select indicators that paint a more optimistic picture, often at the expense of global comparability and empirical rigor.

The Solution: Building Indices with Integrity

To prevent gaming, index builders should adopt scientific, transparent, and reproducible methods. Here’s how.

1. Pre-Registration of Methodology

Just like in clinical trials, the rules for building the index — indicator list, data sources, weightings, normalization methods — should be fixed and published before data collection.

Example: The UNDP’s HDI has maintained a consistent formula since 2010. Any changes are subjected to multi-year expert reviews.

2. MECE Indicator Design

Choose indicators that are Mutually Exclusive and Collectively Exhaustive (MECE). This avoids double-counting and ensures full coverage of the concept being measured.

For example, avoid including both “GDP per capita” and “bank account ownership” unless it’s proven they reflect distinct development aspects.

3. Causal Relevance, Not Just Correlation

Every indicator should have proven causal relevance to the outcome the index claims to measure. Including indicators just because they correlate with a positive trend opens the door to manipulation.

Use basic causal techniques like:
Granger causality tests
Instrumental variables
Panel regressions with controls

4. Statistical Checks: PCA or Factor Analysis

If you have dozens of indicators, use Principal Component Analysis (PCA) or Factor Analysis to:

Reduce dimensionality
Identify redundancy
Derive optimal weights based on variance explained
Example: The World Bank’s Worldwide Governance Indicators use factor models to aggregate related metrics into broader governance pillars.

5. Robustness and Sensitivity Analysis

Publish tests showing how rankings change when:

Indicators are added or removed
Weights are varied
Alternative normalizations are used

If a state’s rank collapses just by dropping one metric, the index is not robust.

6. Open Data and Reproducibility

Publish the raw data, the code used to calculate scores, and detailed documentation. Allow independent auditors and researchers to reproduce results.

Example: The OECD’s Better Life Index lets users adjust indicator weights live on their website, showing how rankings change transparently.

Conclusion

Composite indices are not inherently flawed — but they are easily weaponized unless built with rigor and transparency. In a data-driven world, trust in metrics is paramount.

If institutions like NITI Aayog want their indices to carry real weight — and not just be bureaucratic PR tools — they must commit to methodological transparency, causal integrity, and statistical soundness.

Otherwise, we risk mistaking data-driven illusions for meaningful progress.

Why Attributing India’s GDP Growth Solely to Leadership is Misguided

India’s economic growth, often measured by its Gross Domestic Product (GDP), is frequently attributed to the policies and vision of its political leadership. While leaders play a role in shaping economic policy, crediting or blaming them alone for GDP growth oversimplifies a complex interplay of factors. India’s economy is influenced by global market dynamics, structural reforms, demographic advantages, and historical policy frameworks, among others. This article explores why pinning India’s GDP growth solely on its leadership is flawed, using recent data and examples to highlight the broader forces at play.

The Complexity of GDP Growth

GDP, the total monetary value of goods and services produced within a country, reflects a multitude of influences beyond the control of any single administration. In recent years, India has been one of the world’s fastest-growing major economies, with real GDP growth recorded at 8.2% in FY 2023-24, according to the Ministry of Statistics and Programme Implementation. However, this growth cannot be attributed solely to the policies of the current government. Factors such as global demand, private investment, technological advancements, and past reforms play significant roles.

For instance, India’s economic liberalization in 1991, initiated under a Congress-led government, laid the foundation for its integration into the global economy. These reforms dismantled the restrictive Licence Raj, opened markets to foreign investment, and spurred growth in the services and manufacturing sectors. By 2004-2014, under another Congress-led administration, India’s GDP tripled from $0.7 trillion to $2.1 trillion, driven by global economic tailwinds and policies like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which boosted rural consumption. These historical reforms created a robust base that subsequent governments have built upon, demonstrating that economic growth is a cumulative process.

Global Economic Conditions

Global economic trends significantly impact India’s GDP growth, often beyond the control of its leaders. For example, India’s export sector, which accounted for $433.56 billion in FY25, relies heavily on demand from trading partners like the United States. A global slowdown, as seen in recent years due to geopolitical tensions and supply chain disruptions, can dampen export growth, affecting GDP. In Q1 FY25, India’s GDP growth slowed to 6.7%, partly due to weaker global demand, despite domestic policy continuity.

Conversely, favorable global conditions, such as stable commodity prices and cooling food inflation, have supported India’s growth. The International Monetary Fund (IMF) raised India’s FY25 growth forecast to 7% in July 2024, citing improved rural consumption driven by normal monsoons—a factor tied to weather patterns rather than leadership decisions. These external dynamics highlight that economic performance is not solely a reflection of leadership but also of global economic health.

Structural Reforms and Historical Context

India’s economic trajectory is shaped by structural reforms, many of which have long gestation periods. The Goods and Services Tax (GST), introduced in 2017, streamlined India’s tax system and boosted revenue collection, contributing to fiscal stability. However, its implementation was disruptive, slowing GDP growth to 6.6% in 2017-18. Similarly, the 2016 demonetization policy, aimed at curbing black money, led to economic strain, particularly for the informal sector, which accounts for nearly 50% of India’s workforce. These policies, while bold, caused short-term economic pain, suggesting that leadership decisions can sometimes hinder growth as much as they help.

In contrast, earlier reforms like the 2004-2014 focus on financial inclusion and rural infrastructure under the United Progressive Alliance (UPA) government laid the groundwork for sustained consumption-driven growth. Programs like MGNREGA increased rural incomes, contributing to a consumption multiplier effect that Deloitte estimates could add 0.6% to 0.7% to GDP in FY25-26. These long-term benefits underscore how past policies continue to shape current growth, regardless of who is in power.

Demographic and Technological Factors

India’s young and educated workforce is a key driver of economic growth. With over 1.2 billion internet users in 2023, India’s digital adoption has fueled sectors like IT and e-commerce, which contribute significantly to GDP. The services sector, accounting for over 50% of GDP, has benefited from global outsourcing trends, a phenomenon that began in the 1990s and gained momentum in the 2000s. This growth in services predates the current administration and reflects India’s structural advantages rather than leadership alone.

Moreover, India’s 118 unicorn startups, valued at over $354 billion as of January 2025, highlight the role of private entrepreneurship. Initiatives like Start-up India have supported this ecosystem, but the groundwork for India’s tech prowess was laid decades ago through investments in education and IT infrastructure, particularly during the 2000s when India emerged as a global IT hub.

Sectoral Contributions and Regional Disparities

India’s economic growth varies across sectors and regions, further complicating the leadership narrative. The manufacturing sector grew by 7% in Q1 FY25, driven by private investment and policies like the Production Linked Incentive (PLI) scheme. However, agriculture, which employs over 44% of the workforce, grew at a modest 2%, constrained by weather-related challenges and structural inefficiencies. These sectoral disparities show that growth is not uniform and depends on factors like climate and infrastructure, which no single administration can fully control.

Regional variations also play a role. States like Maharashtra and Tamil Nadu contribute significantly to GDP due to their industrial and service-driven economies, while states like Bihar lag due to weaker infrastructure. Policies that foster regional development, such as those implemented in the 2000s to boost southern states’ IT sectors, have had lasting impacts that current growth builds upon.

The Risks of Oversimplification

Attributing India’s GDP growth solely to leadership risks ignoring these broader factors and can lead to misguided policy priorities. For example, the current government’s focus on infrastructure spending has driven growth, with public investment in roads and railways spurring economic activity. However, high food inflation and a large informal sector continue to pose challenges, as seen in the modest 2.8% growth in urban fast-moving consumer goods in Q3 2024. These issues reflect structural constraints that require long-term solutions, not just leadership-driven initiatives.

Moreover, policies like demonetization and the rushed GST rollout highlight how leadership decisions can sometimes disrupt growth. In contrast, the steady progress in poverty reduction—halving extreme poverty between 2011 and 2019—was driven by inclusive policies and economic momentum from earlier decades. This suggests that sustainable growth requires a balance of continuity and innovation, rather than relying on the charisma or decisions of a single leader.

Conclusion

India’s GDP growth is a story of resilience and complexity, driven by a mix of global conditions, historical reforms, demographic strengths, and sectoral dynamics. While leadership plays a role in shaping policies, it is not the sole driver of economic success. The liberalization of the 1990s and the inclusive policies of the 2000s laid a strong foundation for India’s growth, which continues to benefit the economy today. Overemphasizing the role of current leadership risks ignoring these deeper forces and the contributions of past administrations. By recognizing the multifaceted nature of GDP growth, policymakers can focus on sustainable, inclusive strategies that address India’s structural challenges and capitalize on its unique strengths.