Former Infosys CFO Mohandas Pai on Wednesday strongly dismissed economist and former chief economic advisor Kaushik Basu's claim that India’s economy is “creaking”, calling it “a joke” and pointing to strong growth indicators. “What a joke! 6.5% is highest growth rate amongst large countries, individual IT payments up by 20% and he says economy is creaking!” Pai wrote in response to Basu’s criticism on X.
Basu, in a social media post, had argued that despite India’s “strong fundamentals”, the economy was struggling. “The rupee depreciated sharply cutting people’s buying power, youth unemployment is high, growth is slowing, pollution is among the world’s highest. These are solvable & India has the talent. It has to use it,” he wrote on X.
The debate comes as India's economy grew at 6.2% in the third quarter of 2024-25, according to data from the National Statistical Office (NSO). This was a decline from 9.5% in the same period last year and was largely attributed to weaknesses in manufacturing and mining. The NSO projects India's full-year growth at 6.5% for 2024-25, aligning with estimates from the IMF and World Bank, which expect India’s economy to remain strong in the coming years.
The World Bank’s January 2025 Global Economic Prospects report forecasts India's GDP to grow at 6.7% in both FY26 and FY27, significantly outpacing global growth, which is expected to remain at 2.7%. Similarly, the IMF’s latest World Economic Outlook predicts India’s growth will hold at 6.5% for both 2025 and 2026.
IMF First Deputy Managing Director Gita Gopinath, speaking to Business Today, recently dismissed concerns over the slowdown, calling it temporary and driven by cyclical factors rather than structural weaknesses. She reiterated that India remains one of the fastest-growing economies globally and is well-positioned for long-term growth.
"We see it (slowdown) as a temporary thing. There have been some delays in implementing some of the public infrastructure projects, but we see that picking up. We do continue to see strength in rural consumption," she said in an exclusive conversation with Rahul Kanwal, Executive Director of Business Today. "For the fiscal year as a whole, our growth number is 6.5%. So we do expect to see a recovery."