The latest statement on the Indian economy by International Monetary Fund (IMF) managing director Kristalina Georgieva, where she expects it to be “a little weaker” in 2025 comes right after last week’s first advance estimates of India’s Gross Domestic Product (GDP) released by the ministry of statistics, government of India. It says, “the real GDP has been estimated to grow by 6.4 per cent in FY 2024-25 as compared to the growth rate of 8.2 per cent in the Provisional Estimate (PE) of GDP for FY 2023-24.” Not surprising, it is not just the dourest who seem to be driven to dwell at length on what to make of the slowdown in the Indian economy and its implications, even the perpetual optimists are exuding a sense of tempered optimism on the economic growth prospects in 2025.
For an economy that harbours hopes of a seat at the high table with rich nations and a comparable per capita income, the current numbers are a far cry from the 8 to 9 per cent year-on-year growth needed for two decades in running to accomplish this dream. It is therefore with good reason that thought leaders and economy experts in the country are hinging hopes on the next Union budget that finance minister Nirmala Sitharaman will present next month (incidentally for a record number of time).
Clearly, concerned at the sluggishness creeping in, Kris Gopalakrishnan, the philanthropist co-founder of Infosys, says, “at 6.4 per cent GDP growth, we are slowing down and we cannot afford it.” The implications of this could be significant, he feels because “if the economic activity slows down then it has a cascading effect on job-creation.”
He therefore has hopes in the coming Union budget, which, under the current circumstances, he feels should be focussed on consumers, work towards fostering a greater ease of doing business, stimulating entrepreneurship and all of it backed by a clear support and skilling emphasis for the job-creating services sector.”
Gopalakrishnan, who is also the co-founder of Axilor Ventures and is one who strongly believes in a research-led growth for India and has himself committed huge sums to support basic research in the country, hopes to see measures in taxation and a further streamlining of taxation rules that result in more money in the hands of the proverbial common man.
He does see the need for a sharp focus on manufacturing too but says, “it is needed. But then, in times of robots, it is crucial more for strategic reasons than for job-creation alone.”
Seeing a decline in “the enrolment in our colleges as a worrisome factor,” he prefers emphasis on “skilling. There are efforts in place today on skilling but I am not sure on the extent to which it is aiding job-creation. We have to look at entrepreneurial activity and the SME (small and medium enterprises) sector and stabilise it,” he says.
