Jairam Ramesh Raises Alarm Over Indian Economy’s Current State

Congress leader Jairam Ramesh Friday highlighted concerns about the Indian economy based on a research report by Nuvama Institutional Equities. The report flags several slowdown signs in the economy.

The Nuvama Institutional has highlighted several areas of concern regarding India’s economy based on their recent reports, suggesting that high-frequency indicators like bank credit growth, which is down to 9 per cent from 16 per cent, GST collections that slowed to 6.2 per cent from 11 per cent, and export growth, which is subdued at 6 per cent are showing signs of slowdown.

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The report also says that consumption is outpacing capital expenditure (capex), a trend seen during the pandemic, raising concerns about long-term economic buoyancy.

It also indicated that growth in eight core sectors declined to 3 per cent from 8 per cent, and diesel consumption is at 1 per cent while medium and heavy commercial vehicle sales have declined by 3 per cent.

Also, though not explicitly highlighted in the Nuvama report regarding these specific concerns in the latest update, rural inflation was noted in other contexts to be elevated compared to urban areas in some analyses.

Asserting that a slowdown in key economies can impact India’s export demand and foreign investment, the report suggests that managing inflation effectively is a critical challenge, especially with fluctuations in food and energy prices.

Creating enough jobs for India’s growing workforce is a daunting challenge, as progress in infrastructure development has also been uneven. Balancing economic growth with environmental sustainability is also a unique challenge.

Global trade tensions and financial market volatility are major risks to India’s economic growth. Uncertainty in global markets may spike inflation, as rural inflation remained elevated at 5.8 per cent compared to 4.6 per cent in urban areas in December 2024.

However, despite these challenges, India’s economy remains robust, supported by strong domestic demand, stable investment activity, proactive government policies, and a resilient external sector.

In a post on handle X, Jairam Ramesh stressed that the economy needs a “huge booster dose” achievable through drastic GST reform, ending “tax terrorism,” and abandoning favoritism towards one or two big business groups.