India's Current Economic Situation: Beyond GDP and Political Posturing

India’s economic landscape has been a fascinating subject of both optimism and concern, with the government leveraging online transactions to inflate its GDP figures. However, the narrative often obscured by these macroeconomic indicators reveals a different reality. This essay explores the underlying truths of India's economic situation, critical policy issues, and a more pragmatic perspective on economic well-being.

The Role of Online Transactions in GDP

The advent of online transactions, such as Unified Payments Interface (UPI), has significantly impacted the way economic activities are measured. Earlier, non-cash transactions that were not included in the Gross Domestic Product (GDP) are now being counted. This shift in data collection methods has inflated the overall GDP, but it has also raised concerns about the authenticity of these economic figures.

For instance, conducting a simple transaction like buying an Aloo Tikki from a local street vendor using UPI instead of cash may be recorded as a contribution to the GDP. This practice may seem like a positive step towards modernizing the economy, but it does not necessarily reflect the creation of new wealth or economic activity. It's a form of redefinition rather than genuine growth or development.

Government Measures and Their Impact

The government's efforts to show increased tax collection through higher tax rates are often seen as a way to boost its economic image. However, this approach is more about optics than substance. A closer look at the data reveals that this is a short-term strategy designed to create an illusion of economic growth, rather than addressing the fundamental issues.

For instance, a screenshot from Mint News shows that the central government has added a staggering Rs 47 trillion to the national debt in just four years. This pace is both concerning and alarming. At this rate, nearly a quarter of the national debt has been added in the past four years, indicating a unsustainable fiscal trajectory.

The Reality Behind Economic Growth

When we delve deeper into the economic landscape, the picture becomes more nuanced. Startups are not booming, and new businesses are being harassed by regulatory and tax compliances. These factors contribute to a less vibrant business environment, dampening hopes for significant economic growth.

Pragmatic Perspective on Economic Well-being

From a purely economic standpoint, the Indian economy is doing about the same as it has been for decades – there's no indication of a significantly better or worse situation. This perspective is important because it challenges the perception that rapid growth is the sole indicator of economic health.

One anecdote often cited is that of a man seeking advice from an astrologer about his future. The astrologer, after analyzing factors, predicts that the next few years will be challenging. This response resonates with the current economic reality. True economic health should be measured by the everyday life of its citizens, particularly in terms of food, money, and peace of mind.

Observing from this pragmatic perspective, the average Indian is neither much better off nor worse off than before. They continue to live a life to which they have grown accustomed, sometimes even resigned to their circumstances.

It's crucial to recognize that the current economic policies and leadership are unlikely to bring about significant and rapid changes. As one of my friends often says, 'absence of deterioration is improvement enough.' This sentiment holds true for the Indian economic scenario at present. While there may be challenges and real problems, the economy is likely to hold its ground without a dramatic decline.

In essence, the Indian economy is in a state of equilibrium, facing both challenges and opportunities. Looking beyond the headlines and focusing on the practical aspects of daily life, it seems that the country is continuing to navigate a balanced and steady course.