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India: Is the world's fastest-growing big economy losing steam?www.bbc.com/news/articles/c8dq9rj63lmo
395 sats \ 6 comments \ @Coinsreporter 8 Jan econ
The latest GDP numbers paint a sobering picture. Between July and September, India's economy slumped to a seven-quarter low of 5.4%, well below the Reserve Bank of India (RBI) forecast of 7%.
While it is still robust compared with developed nations, the figure signals a slowdown.
Not a great news for sure but BBC somehow miscalculated it by publishing India as the "fastest-growing". There are bunch of other nations which are doing better than India, not only in growth but they've also successfully restrained the inflation. For example Georgia saw a growth rate in excess of 7% but had an inflation rate around 3% for 2024.1 India's problem is not the growth rate which is still pretty solid but the inflation rate seems to have equalled (in reran ahead of the growth).
India's inflation surged to 6.2% in October, breaching the central bank's target ceiling (4%) and reaching a 14-month high, according to official data. It was mainly driven by food prices, comprising half of the consumer price basket – vegetable prices, for example, rose to more than 40% in October. There are also growing signs that food price hikes are now influencing other everyday costs, or core inflation.
But high interest rates alone may not fully explain the slowing growth. "Lowering rates won't spur growth unless consumption demand is strong. Investors borrow and invest only when demand exists, and that's not the case now,"
In the meantime officials and political leaders are trying to justify all these numbers in one or the other way. However, I'm not very much hopeful about India making a solid recovery if the inflation don't fall back.
The 6.2% mark isn't a real one, the inflation here is much higher than this. I've realised that the vegetables and grains prices are soaring way beyond normal. I've never witnessed such price rises in my entire life. I don't know if it's a symbol of growth or we've really got richer?
The wages, even for the government servants, have risen not more than 8% annually in past 5 years,2 but there's a catch. INR has depreciated more than 23% in last five years.3
You know what it means. But the government is taxing of 30% on my Bitcoin profits here.

Footnotes

  1. https://www.focus-economics.com/countries/georgia/ ↩
  2. https://www.statista.com/statistics/1284723/india-salary-increase ↩
  3. https://www.business-standard.com/economy/news/rupee-hits-new-low-at-rs-85-54-after-worst-intraday-fall-in-2-years-124122701060_1.html ↩
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50 sats \ 5 replies \ @Undisciplined 8 Jan
India's primary problem is well-known and addressing it is the fix to both slow growth and high prices.
India needs to deregulate its economy, drastically. Excessive regulations make everything more expensive and they are a major drag on productivity. India is notorious for the amount of red tape people are made to jump through.
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42 sats \ 4 replies \ @Coinsreporter OP 8 Jan
Spot on. There's still so much corruption that those who are richer and powerful can do incredible things. It's not that people like me can't, they can. But to give India push for real prosperity, it needs to be more open on the economic front. The problem for doing this that government cites is too much Foreign Investment would cripple the middle class shopkeepers and small vendors.
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20 sats \ 3 replies \ @Undisciplined 8 Jan
If true, then just cut the red tape for businesses below some size.
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37 sats \ 2 replies \ @Coinsreporter OP 8 Jan
It's true but corrupt politicians outweigh the good ones by a huge margin. The bad ones don't let the red tape cut for any size because it will give s rise to transparency.
Those who are good and honest are mostly type of people who otherwise are wise but I doubt they understand little bit about economy.
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20 sats \ 1 reply \ @Undisciplined 8 Jan
That's what I meant by "if true". My presumption is that they're lying.
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21 sats \ 0 replies \ @Coinsreporter OP 8 Jan
Yes, they are liars. As I said cutting the red tape would make things transparent which would cut down on the corrupt practices and result in less no.2 income for politicians and bureaucrats, they will not do it now.
I don't blame them but I blame the type of constitution they created to run this country is the culprit. There are things in there that lead to corrupt practices.
For example, there was pension system in India for government workers a few years ago. This was changed. But all former MPs and MLAs still get pension after their 5 years are completed. This is because the rules for them are seperately mentioned.
Even though a government teacher or doctor would work for 30 - 40 years and yeah he works for real, whereas a politician if gets elected just for once, he can be certain for a lifetime of salary + perks.
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