Congress General Secretary Jairam Ramesh recently raised serious concerns about the state of the Indian economy, identifying what he described as "three dark clouds" that threaten the nation's growth.
Ramesh's comments reflect a critical stance towards Prime Minister Narendra Modi and the current NDA government, pointing to various factors that he believes will hinder economic progress in the coming years.
One of the primary issues Ramesh highlighted is the "unsteady path of private sector investment." He pointed out that, despite a brief recovery following the COVID-19 pandemic, investment in the private sector has returned to a shaky state.
Ramesh noted that there was a notable 21 percent decline in new project announcements during the financial years 2023 and 2024. This downturn, he argued, illustrates a lack of confidence among investors regarding the Indian consumer market, a sentiment he attributes to the government's inconsistent policies.
Ramesh expressed concern that instead of focusing on business growth, many companies are prioritising stock market valuations. This shift in focus, he believes, is detrimental to the long-term prospects of the Indian economy.
As companies concentrate on reducing their debt burdens, the overall investment climate becomes less favourable, which is troubling for the future of private sector investment that drives economic growth.
Another major point Ramesh raised is the stagnation of India’s manufacturing sector, which he claims has remained static since the launch of the "Make in India" initiative.
He noted that over the past decade, the share of manufacturing in the country's GDP has not improved, and the employment share in this sector has even decreased slightly.
Additionally, he pointed out that India’s share of global merchandise exports has stagnated, further undermining the manufacturing industry's contribution to the economy.
Ramesh contrasted the current stagnation with the period from 2005 to 2015 under the previous UPA government, during which India’s share in global exports grew at a much faster rate.
In discussing labour conditions, Ramesh referenced the Annual Survey of Industries for 2022-23, which indicated a decline in real wages and productivity for Indian labourers.
He pointed out that the growth in Gross Value Added (GVA) per worker—a key measure of labor productivity—has sharply slowed down. From 2014-15 to 2018-19, GVA growth plummeted from 6.6 percent to just 0.6 percent.
This decline in productivity, coupled with rising inflation, has resulted in stagnant real wages for workers. Such a situation hampers consumer spending, which is essential for driving investment and economic growth.
Ramesh's statements reflect a growing concern about the overall health of the Indian economy. He argues that the combination of weak private sector investment, stagnation in manufacturing, and declining wages presents a troubling picture for the future. He emphasised that these trends are highly detrimental and could significantly constrain India's growth potential in the years ahead.
The Congress leader's analysis serves as a call to action for policymakers to reassess their strategies and implement reforms that would restore investor confidence, invigorate the manufacturing sector, and improve the conditions for workers.
Ramesh's critique points to the urgent need for effective governance that prioritises sustainable economic growth and ensures that the benefits of development reach all segments of society.
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