Comment by Riaz Haq on Tuesday

It is now widely understood that India's official GDP is highly exaggerated. IMF has questioned it and Indian economists like Prof Arun Kumar have said India's actual GDP is as low as 50% of the official GDP, mainly because of the way the rapidly declining unorganized sector is overestimated by Indian officials.

https://www.riazhaq.com/2025/11/imf-questions-modis-gdp-data-is-ind...


On the other hand, Pakistan's unorganized GDP is significantly underestimated. It can be seen in the size of Pakistan's cash economy (currency in circulation) which is much larger as a percentage of the total economy than in India and Bangladesh.

https://propakistani.pk/2025/10/10/pakistans-real-economy-is-near-1...

“Pakistan’s recorded economy stands at US$411 billion, but nearly half remains undocumented,” the (finance) minister (Aurngzeb) said. “The real size of our economy is closer to a trillion dollars.

https://www.riazhaq.com/2021/12/has-bangladesh-really-left-india-an...

"Pakistan’s currency in circulation reaches Rs10.8 trillion ($38.5 billion) , up 27.4% of total money supply"

https://profit.pakistantoday.com.pk/2025/08/28/pakistans-currency-i...

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Countries with most cash use in world in 2025: Pakistan in top 10; know where India ranks

List of top 10 countries with most cash usage in 2025: At the top of the list is Myanmar, where cash is used for about 98 per cent of everyday transactions.

https://indianexpress.com/article/trending/top-10-listing/countries...

With around 90 per cent of everyday transactions being performed in cash, Pakistan is likewise at the top of the list. Here, the sizable informal economy is crucial. Cash is preferred by many daily wage workers and small business owners, in part to avoid complex banking procedures and occasionally to avoid paying taxes.

How much Cash do Indians use in 2025?
Approximately 70 per cent of all transactions in India involve cash, despite the country not ranking among the top 10. However, India is notable for spearheading the revolution in digital payments. With just a smartphone, millions of individuals may now send and receive money without using cash thanks to the government-backed Unified Payments Interface (UPI). UPI has made digital transactions quick, simple, and accessible for both online and street merchants.

Comment by Riaz Haq on Wednesday

Cars owned per 1000 by Country 2025: US 850, Japan 670, Germany 627, China 231, Egypt 70, Pakistan 69, India 57

https://worldpopulationreview.com/country-rankings/cars-by-country

Comment by Riaz Haq yesterday

India Looks To Boost Nuclear; Power Demand Lags GDP Growth By Far - Bloomberg

https://www.bloomberg.com/news/newsletters/2025-12-16/india-looks-t...


Why is India’s power demand up barely 1% if GDP growth is tracking 7%-8% this fiscal year?

It started with several reports that show power demand growth at 0.9% during April to November. That, too, on a weak base of 3% growth last fiscal year through March.

A key reason is a cooler summer and an extended monsoon — unseasonal rains in May and October lowered use of irrigation pumps in rural areas and air conditioners in cities, Murtuza Arsiwalla, director of research at Kotak Institutional Equities, told me.

But that doesn’t explain why power demand declined last month, making it the first November contraction in five years. Arsiwalla adds two more reasons to the list — a rise in off-grid power supply, such as captive and rooftop solar power, and moderation of industrial activity, which is 40% of all power consumption.

Typically, power demand growth is about 0.9 times GDP growth, with exceptions in some years. Right now, that ratio is running at about 0.1. Economists caution against reading too much into the correlation. One pointed to the less energy intensive services sector dominating economic growth. The other suggested rising energy efficiency across the economy, citing the modest increase in fuel consumption despite a pick-up in GDP growth post-pandemic as evidence.

To be sure, some analysts expect power demand to bounce back. Till that happens, the data casts a shadow over the strength of India’s economic recovery. It also spells trouble for an energy sector already concerned about oversupply and rising instances of solar power curtailment.

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Tax collections of the Centre have grown only 4% between April and October 2025, way below the fiscal 2026 target of 11% growth


https://www.moneycontrol.com/news/opinion/india-s-gdp-outperformed-...

Comment by Riaz Haq 3 hours ago

@ShoaibDaniyal

Had a fascinating chat with @arvindsubraman and Devesh Kapur.

They argue that India's official GDP data is wrong.

They posit that the liberalisation phase ended a decade+ back.

India's growth has fallen sharply since then.


https://x.com/shoaibdaniyal/status/2001998168041652333?s=61&t=m...


https://youtu.be/KfEk0mEiK8I

In A Sixth of Humanity, political scientist Devesh Kapur and economist Arvind Subramanian set out to do something ambitious: chart India’s development journey from Nehru to Modi.

In this episode of Adda, they sit down with Shoaib Daniyal and break down the four stages of India’s development. Starting with Nehru’s planned economy, which they argue did not do what it set out to: import substitution. Rather than create a safe space for Indian industry to grow and then eventually take on international competition, it ended up nearly killing the private sector.

Interestingly, Modi might be doing something similar now by promoting so-called national champions like Adani and Ambani. Again, by allowing them to largely play in the domestic space, rather than making them take on international competition, these firms are not adding to India’s growth story.

Most shockingly, however, Kapur and Subramanian argue that India’s GDP growth has ground to a halt over the last decade or so, with them estimating that average growth has been only around 3%. For context, official data reported that India’s real GDP grew 8.2% in the second quarter of 2025-26.

Comment by Riaz Haq 1 hour ago

Sushant Singh
@SushantSin
An unambitious elite spoiled by finance — plus a working class held back by inadequate education and inequities of caste & gender — are stymying the emergence of a global middle class in India. The social change is nowhere on the horizon.
@andymukherjee70

https://x.com/SushantSin/status/2001881357849629144?s=20

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https://www.bloomberg.com/opinion/articles/2025-12-18/why-india-fel...

China now accounts for a sizable share of the more affluent middle-income earners, while India seems to have faded in relative importance.
The top of the pyramid in India is made up of the "Octopus Class," the 1 million super-wealthy individuals, while the bottom is bursting at the seams with 800 million people surviving on free food grains from the government.
An unambitious elite and a working class held back by inadequate education and inequities of caste and gender are stymying the emergence of a global middle class in India.

In 1980, neither China nor India had much representation in the “global middle class” — people who neither belong to the bottom half of the income distribution nor rank among the top 10% worldwide. Almost a half-century later, things have changed — but in very different ways. China now accounts for a sizable share of the more affluent middle-income earners, while India seems to have faded in relative importance.

This finding, nestled in the annual World Inequality Report, is a puzzle. After all, the only two countries with billion-plus populations are both believed to have done well by embracing capitalism and opening their economies after the collapse of the Soviet Union. China became the factory to the world; India became its back office. So why should the outcomes for their citizens be so different?

To unpack this puzzle, start with Indians who are outside the middle class. The top of the pyramid is made up of what Marcellus Investment Managers in Mumbai has termed as the “Octopus Class,”the 1 million super-wealthy individuals whose affluence and disposable incomes are close to first-world levels. This tiny group has earned high returns from financial markets, and grown rich by serving each other and affluent customers around the world as corporate honchos, bankers, lawyers, and other top professionals. But the bottom is bursting at the seams, particularly since the pandemic when 800 million people came to survive on free food grains from the government. They still do.

Between the bookends of wealth and welfare lies the problematic domain: work and wages.

In both China and India, surplus labor in agriculture followed the textbook model of development: It provided the ballast for industrialization, urbanization, and creation of a middle class. But unlike in China, where young people of both sexes migrated to cities, in India mostly the men went; women from landless peasant families found seasonal work at brick kilns and construction sites. Most others stayed back, leaving the most-populous nation with one of the worst rates of female labor force participation in the developing world. After the pandemic, this ratio began to rise. But that was largely because of an increase in work on the farm and self-employment. Those don’t pay enough.

Meanwhile, the opportunities for men who came to cities were limited by the reach of their caste, a birth-based social identity unique to South Asia. Although upward mobility at the lower end of the hierarchy has improved somewhat in recent years, it’s still severely restricted. State jobs, where historically discriminated groups could get the benefit of affirmative action, have become rare. Like their fathers before them, a majority of male workers remain trapped in low-productivity, low-income occupations, such as guards, chauffeurs, gardeners, and handymen.

Comment by Riaz Haq 1 hour ago

Indian Middle Class Fell Off the Global Map

https://www.bloomberg.com/opinion/articles/2025-12-18/why-india-fel...

Meanwhile, the opportunities for men who came to cities were limited by the reach of their caste, a birth-based social identity unique to South Asia. Although upward mobility at the lower end of the hierarchy has improved somewhat in recent years, it’s still severely restricted. State jobs, where historically discriminated groups could get the benefit of affirmative action, have become rare. Like their fathers before them, a majority of male workers remain trapped in low-productivity, low-income occupations, such as guards, chauffeurs, gardeners, and handymen.

Most of these findings are drawn from the State of Working India 2023 report by Amit Basole and his team at the Bengaluru-based Azim Premji University. (A new edition is expected in 2026.) As the economists have argued, India missed out on the expected transfer of labor from subsistence-oriented occupations to profit-led activity. Three out of four nonfarm workers are stuck in the informal sector.

A stunted middle class may be a direct result of this extreme inequality. Folks at the top of the ladder don’t see the teeming masses as a meaningful market, except for utilities, soap, short videos, and personal loans. Meanwhile, those at the bottom of the pyramid lack the education and skills to manufacture things for the wealthy at home and overseas. A rapidly digitizing economy needs young internal migrants for gig work — like deliveries for 10-minute quick commerce. While it’s no stepping stone to a middle-class life, it’s all that there is for the youth: The return on an additional year of schooling is lower than not just China, but also Sub-Saharan Africa, according to the World Inequality Report.

At the top of society, mobility is limited globally. Many in today’s Chinese elite are descendants of those who had prominent roles during the Communist revolution of 1949. India’s business tycoons are mostly a leftover of the mercantile interests that had thrived under pre-1947 British colonial rule. They’re guided by short-term returns. Instead of replicating their Chinese counterparts’ aggressive investment in technology, their one brilliant idea for scaling up manufacturing is to lobby for relaxed labor laws — so they can extract a 12-hour workday.

The top 1% Indians own 40% of overall personal wealth, but Gen-Z billionaires are bored with business. They would rather park their fortunes in family offices than start new enterprises. In the Soviet-styled planned economy that extended up to the 1980s, their grandparents scrambled for licenses. Nowadays, their parents just fight each other for a favorable government policy and haggle with private-credit firms for refinancing.


An unambitious elite spoiled by finance — plus a working class held back by inadequate education and inequities of caste and gender — are stymying the emergence of a global middle class in India. The social change that can fill the gap is nowhere on the horizon.

Comment