India’s Economic Churn: The Nectar of Growth

Context

• India’s economy, often criticised as a “dead economy” by skeptics, has shown resilience and renewal.

• Like Samudra Manthan, economic churns in India (1991 reforms, post-COVID digital push) have yielded growth opportunities.

Recent Economic Performance

• GDP Growth:

  • Real GDP grew 7.8% in Q1 FY 2025-26 (5-quarter high).

  • GVA up 7.6% – Manufacturing (7.7%), Construction (7.6%), Services (~9.3%).

  • Nominal GDP growth: 8.8%.

• Global Standing:

  • World’s 4th largest economy; fastest-growing major economy.

  • On track to overtake Germany & become 3rd largest before 2030.

  • Contributes 15%+ of global growth; target: 20% share.

• External Validation:

  • S&P Global rating upgrade (first in 18 years) → lower borrowing costs, greater investor confidence.

Inclusivity of Growth

• Poverty Reduction:

  • 24.82 crore Indians moved out of multidimensional poverty (2013–14 to 2022–23).

• Basic Service Delivery:

  • Bank accounts, Ujjwala (cooking fuel), Ayushman Bharat (health), Jal Jeevan Mission (tap water).

• Governance Model:

  • Consensus-building, competitive federalism, last-mile digital delivery.

  • Unlike authoritarian “sprints”, India follows a “marathoner’s model” — steady, sustainable.

Energy Security & Growth Link

• India’s Position:

  • 3rd largest energy consumer.

  • 4th largest refiner & LNG importer.

  • Refining capacity: 5.2 million bpd, aiming 400 MTPA by 2030.

• Future Demand:

  • Energy demand projected to double by 2047.

  • Will account for 25% of incremental global demand.

• Policy Initiatives:

  • Exploration acreage expanded (8% in 2021 → 16% in 2025; target: 1 million sq. km by 2030).

  • 99% reduction in ‘No-Go’ areas.

  • Open Acreage Licensing Policy (OALP) ensures transparency.

  • New gas pricing reforms: linked to Indian crude basket + 20% premium for deepwater wells.

Energy Transition

• Biofuels:

  • Ethanol blending: 1.5% (2014) → 20% (2025).

  • Saved ₹1.25 lakh crore forex; ₹1 lakh crore paid to farmers.

• Compressed Biogas (CBG):

  • 300+ plants underway.

  • Target: 5% blending by 2028.

• Green Hydrogen:

  • PSUs leading large-scale projects.

India & Russian Oil Debate

• Fact Check:

  • Russian crude under price cap, not sanctions.

  • India complies with all international norms.

  • Refineries always exported petroleum products (pre-Ukraine conflict too).

  • Exports to Europe continue → no profiteering.

• Domestic Stability:

  • Oil PSUs absorbed losses (~₹10/litre diesel).

  • Tax cuts by Centre & States.

  • Ensured no retail outlet ran dry; prices stable for households.

Industrial Revolution 2.0

• New Growth Drivers:

  • Semiconductors, electronics, renewables, defence, chemicals.

  • Backed by PLI schemes + PM Gati Shakti logistics.

• Semiconductor Mission:

  • 4 new projects approved.

  • India–Japan partnership → resilient supply chains.

• Digital Economy:

  • India leads in real-time payments (UPI).

  • Startup ecosystem → global service exports.

  • Digital + infrastructure = higher formalisation, investment, productivity.

Future Projections

• EY estimates:

  • By 2038, India could be 2nd largest economy (PPP), GDP $34 trillion+.

• Growth rests on:

  • Steady reforms.

  • Human capital.

  • Abundant clean energy.

Key Takeaways

• India’s economy is resilient and inclusive, defying skepticism.

• Growth is backed by reforms, digitalisation, energy security, and industrial revival.

• “Viksit Bharat” is positioned as a deliverable, not aspiration.

• India’s growth model = democratic, inclusive, sustainable.

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