Reality Far From Hype: Congress Criticizes Economic Growth Amid GDP Slowdown

GDP growth dips to 5.4% in Q2 FY 2024-25, raising questions on government policies.

India's economic growth has slowed to a two-year low of 5.4% in the July-September quarter, sparking sharp criticism from the Congress party. The dip, attributed to weak manufacturing and mining performance, contrasts starkly with the optimistic projections of Prime Minister Narendra Modi’s government, according to Congress leaders.

Jairam Ramesh said the GDP growth has slowed to 5.4% and private investment growth is an equally anaemic 5.4%.

Congress Slams Economic Policies
Congress spokesperson Jairam Ramesh pointed out that private investment growth also stalled at 5.4%, painting a bleak picture of the economy despite significant government initiatives like the PLI (Production Linked Incentive) scheme and Make in India.

"Manufacturing growth has dropped to an alarming 2.2%, and exports have slowed to 2.8%. Even more concerning is the 2.9% contraction in imports, highlighting domestic economic weakness," Ramesh said in a post on X (formerly Twitter).

He further criticized the government's economic track record, saying, "Despite recalculations of earlier GDP data, PM Modi’s growth record remains significantly weaker than the achievements under Dr. Manmohan Singh’s leadership."

GDP Performance in Perspective

The GDP growth of 5.4% in Q2 FY 2024-25 is a steep decline from the 8.1% recorded in the same quarter of the previous fiscal year. The last comparable low was in Q3 FY 2022-23 when growth plummeted to 4.3%.

Despite these figures, India continues to retain its title as the world’s fastest-growing major economy, with China posting a growth rate of 4.6% for the same period. However, critics argue that being the "fastest" is insufficient if broader economic indicators like manufacturing, consumption, and private investment fail to gain momentum.

Economic Indicators Show Weakness

The Congress party highlighted several troubling trends:

• Manufacturing slowdown: Growth at 2.2%
• Export deceleration: Only 2.8% growth
• Import contraction: -2.9%, signaling poor domestic demand
• Mass consumption stagnation: A worrying trend for long-term economic health

These figures raise questions about the effectiveness of flagship programs like Make in India and the PLI scheme, which were launched to boost domestic manufacturing and attract global investment.

Public Reaction and Political Implications

Economists and political analysts suggest that the government needs to take immediate corrective measures to revive manufacturing and boost private investment. For the Congress, this economic slowdown serves as ammunition to question the government’s performance as the general elections approach.

##India's Economic Snapshot (July-Sept 2024)

📉 GDP Growth: 5.4% (Lowest in 2 Years)  

🏭 Manufacturing Growth: 2.2%  

📤 Exports Growth: 2.8%  

📥 Imports Contraction: -2.9%  

💸 Private Investment Growth: 5.4%  

Key Highlights:

- India remains the fastest-growing major economy globally, but domestic consumption and manufacturing show signs of stagnation.  

- Major government initiatives like PLI and Make in India face criticism for failing to deliver expected outcomes.