In response to the latest quarterly GDP growth report for the July-September period of 2024-25, Congress MP Jairam Ramesh strongly criticised the central government, particularly its handling of manufacturing and private investment.
The report revealed a slowdown in India’s economic growth, with GDP increasing by only 5.4 per cent. Ramesh labelled this disappointing result as a direct consequence of the government's inability to stimulate private investment in the manufacturing sector.
Ramesh’s statement pointed to the dramatic drop in growth figures, highlighting that despite the government’s promises, the manufacturing sector has faltered, with growth slowing to a “shocking” 2.2 per cent.
He expressed his concern over the “Make in India” initiative, which he believes has turned into little more than a facade. According to Ramesh, the tax cuts and production-linked incentives touted by the government fail to match the reality of the economic situation.
The Congress leader also noted that export growth has decelerated to 2.8 per cent, underscoring the lack of progress in making India a global hub for manufacturing exports—a promise Prime Minister Modi made a decade ago.
Despite the flagship “Make in India” scheme launched by the government ten years ago, the manufacturing sector has stagnated, with exports showing no signs of significant growth.
One of the key points Ramesh raised was the declining share of manufacturing in India’s Gross Value Added (GVA). From 18.1 per cent in 2011-12, the manufacturing share has dropped to 14.3 per cent in 2022-23, signalling a troubling trend for the economy.
Along with this decline, Ramesh highlighted a drop in employment within the manufacturing sector, with jobs falling from 51.3 million in 2017 to just 35.65 million in 2022-23.
This marks a significant loss of employment in a sector that has traditionally been seen as a major contributor to India’s economic development.
Ramesh also expressed concern over the decline of India's garment sector, with exports falling from $15 billion in 2013 to $14.5 billion in 2023. He pointed out that countries like Bangladesh and Vietnam have surpassed India in this crucial sector.
The loss of competitive edge in garment exports is particularly concerning, given the sector’s potential for generating employment in India.
Another issue raised by Ramesh was the impact of Chinese imports on Indian manufacturing. He stated that cheap imports from China have been devastating for several Indian industries, particularly in the micro, small, and medium enterprise (MSME) sector.
In Gujarat’s stainless steel industry alone, over a third of MSMEs have shut down due to these imports, which are undercutting local businesses and driving them out of the market.
Ramesh also drew comparisons between the current state of India’s exports and the performance during the tenure of former Prime Minister Manmohan Singh.
He claimed that India’s share of global exports grew much faster in the 2005-2015 period, highlighting the contrast between the two leaderships in terms of economic management.
The Ministry of Statistics and Programme Implementation’s report on the GDP revealed that real GDP in Q2 of 2024-25 is estimated at Rs 44.10 lakh crore, up from Rs 41.86 lakh crore in the same quarter of 2023-24.
However, this growth rate of 5.4 per cent is significantly lower than the Reserve Bank of India’s forecast of 7 per cent. This disappointing performance underscores the challenges the Indian economy faces in meeting its growth targets.
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