*Seoul, Dec 2:* A research paper on India’s economic growth highlights caution amidst optimistic projections for 2023-24. Authored by L.T. Abhinav Surya from the Centre for Development Studies, the paper notes a sluggish recovery from the pandemic, a reliance on non-productive sectors for growth, and imbalanced investment patterns.
Despite the anticipated 6.5% and 6.3% growth projections by the RBI and IMF, respectively, the study calls for a realistic assessment. The paper underscores that while India’s share of the world GDP has increased slightly, the post-pandemic growth rate remains comparable to pre-pandemic levels.
Concerns include high unemployment rates, rising inflation, and unaddressed social and economic issues. Examining GDP growth closely, the paper reveals an annual growth rate of 3.27% between 2019-20 and 2022-23, indicating a slow recovery. The decline in the primary sector’s share of Gross Value Added (GVA) and the stagnant industrial sector are flagged as issues.
The rise of the Finance and Real Estate sector, considered non-productive, is also highlighted. The study expresses worry about the absorption of value by non-productive sectors and the redirection of growth towards Finance and Real Estate. It cautions against celebrating manufacturing sector growth post-pandemic, noting a downturn before the pandemic.
The paper emphasizes the rise in Gross Fixed Capital Formation (GFCF) but raises concerns about increased government investment at the expense of reduced investments by Public Corporations. Infrastructure investment is beneficial but primarily reduces costs for businesses, potentially impacting long-term success. In conclusion, the study suggests a reconsideration of the growth strategy, advising against premature celebrations.
