Comment by Riaz Haq on February 24, 2026 at 10:02am

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🥇 Pragnya Gupta
@GuptaPragnya
Indian-born economist Jayant Bhandari makes a sharp and uncomfortable claim: that many Indians are celebrating the idea of becoming a “world power” while ignoring harsh economic realities.

According to him, the narrative of strength and global dominance does not match the condition of the average citizen. He argues that when measured by per capita income, widespread poverty, unemployment, and inequality, India ranks among the poorest nations relative to its massive population.

The contrast is stark. On one hand — space missions, global summits, and trillion-dollar GDP headlines. On the other — struggling households, limited job creation, and rising living costs.

His statement is provocative and heavily debated. Yet it forces a critical question: Is national pride being built on aggregate numbers while individual prosperity lags behind?

A country’s true strength is not just in its global image — it lies in the dignity, income, and security of its people.

https://x.com/GuptaPragnya/status/2026235411966947507?s=20

Comment by Riaz Haq on Monday

How India Became One of the World’s Biggest Economies - The New York Times

India has grown rapidly despite its slow industrialization, and its economy is now nearly as big as Japan’s.


https://www.nytimes.com/2026/02/27/business/india-economy-gdp.html

India, the world’s fastest-growing large economy for four years in a row, released data on Friday showing that it expanded at a rate of 7.5 percent last year, driven in part by strength in manufacturing.

Many economists, and India’s government, had expected India to become the world’s fourth-largest economy in 2025, overtaking Japan in size. Instead, with the Indian rupee weak against the dollar and Japan’s yen relatively strong, India’s economy stayed a step behind when measured in dollar terms.

But in terms of growth, India far outperformed Japan, which grew only 1.1 percent in 2025. The three largest economies — the United States, China and Germany — all grew more slowly than India last year.

India became the world’s fifth-largest economy four years ago, pushing aside Britain, its former colonial ruler. The International Monetary Fund has projected that India will nudge past Japan in 2026.

The strong growth last year underscores India’s place as one of the world’s most consequential centers of economic gravity, despite breaking every rule about how countries are supposed to modernize. Its rise up the league table of economies has given it geopolitical clout and drawn interest from investors. Yet the shape of its progress is unique. With India’s economic power growing even faster than its population — now more than 1.4 billion people, larger than any other country’s — India is on a course all its own.

The country’s thousands of small businesses hire most of its workers, but an increasing share of growth has come from its biggest companies. Dynastic family firms play an outsize role at every scale, from conglomerates like Mukesh Ambani’s Reliance Group to industry-specific companies.

Sanjiv Bajaj, a scion of a 100-year-old family business with roots in the automotive sector, has had a ringside view of India’s growth. Mr. Bajaj, 56, split off the Bajaj group’s financial services operation from Bajaj Auto in 2007. Bajaj Finserv started with $550 million under management and now controls $53 billion. Its own market value has grown 377 times over.

Much of the company’s success can be traced to India’s policies to modernize technology. In the past decade, the government has pushed biometric IDs and digital payments, pulling a majority of India’s adults into the banking system. India’s own digital payments system now processes 20 billion transactions a month. Most amounts are tiny, Mr. Bajaj said, but the sheer size of the country’s population means that even small shifts in behavior turn into tremendous moneymaking opportunities.

All of that data, Mr. Bajaj said, “allows us to look at every small shop owner and see his inflows and outflows every day.” His company can now make lending decisions at an enormous scale, bringing millions of Indians into the formal credit system, he said.

———-
Bajaj Auto was much bigger than Bajaj Finserv when the companies split ways, but now the banking company is 50 percent larger. Finance, not factories, has been the hotter sector in India, as it is in the United States.

Comment by Riaz Haq yesterday

India’s economy is not as big as economists thought

https://www.economist.com/finance-and-economics/2026/03/05/indias-e...

Indian officials have been in a boastful mood lately. A government report in December argued that judging by real-time economic indicators, India had overtaken Japan as the world’s fourth-biggest economy. This was to become economic fact once the Ministry of Statistics and Programme Implementation updated how it calculates gdp. So in one sense, the new numbers released on February 27th are a disappointment: gdp was 3.3% smaller than previously thought. In other ways, though, they are a cause for celebration.
The methodological update, the first since 2015, reset the “base year”—which sets the weights for different parts of the economy—to 2022. It also added new data sources that capture a clearer picture of the Indian economy. The country looks more rural than before. Agriculture, responsible for 18% of gdp, appears bigger, largely thanks to more detail on fisheries and dairy. Finance and business services also produced a bit more output, while commerce, hotels and transport generated 26% less. The net effect is a service sector that looks 8% smaller than it did using the previous methodology, and makes up 41% of the economy. Manufacturing, which accounts for 15%, has also shrunk slightly.
On the bright side, India is growing even faster than previously believed. gdp expanded by 7.1% in the fiscal year 2024-25, up from an earlier figure of 6.5%. Other numbers show it has grown quickly since, despite facing high duties on exports to America from August until last month, when the Supreme Court curtailed Donald Trump’s willy-nilly tariffing. Although manufacturing’s share failed to meet Prime Minister Narendra Modi’s goal of a quarter of gdp by 2025, high-tech production and electronics assembly are fuelling growth. Business-friendly reforms to taxes and regulations are starting to pay off, too.
A qualified win for India, then—and also a victory for Indian statistics. Economists have raised doubts over the gdp figures released shortly after Mr Modi came into power 12 years ago, and which revised down growth under the previous administration. The shelving of a survey in 2019 that showed a drop in rural consumption hinted that the government might suppress inconvenient facts. That the new figures show a less rosy picture of Mr Modi’s record should reassure observers that the government will not hide unflattering data. And the figures should reassure Mr Modi that India’s title as the world’s fastest-growing big economy remains secure, even if it is not quite as big as he hoped. ■

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