Arvind Subramanian's Exclusive Conclave Talk Unveils India's Economic Conundrums

Rahul Kanwal, Executive Director of Business Today, engaged in an exclusive conversation at the India Today Conclave with Arvind Subramanian, Senior Fellow at the Peterson Institute for International Economics and Former Chief Economic Adviser to the Government of India. They discussed what is causing him concern and anxiety regarding the Indian economy. Mr. Subramanian highlights that Indian economy numbers are growing rapidly and points out a few facts that showcase India's economic success. Firstly, he notes the revival of manufacturing in South India, with factories experiencing rapid growth and creating employment opportunities. Secondly, he mentions the growth in service exports in the global market, indicating India's progression from the IT revolution in the 2000s to exports in the global market. However, Mr. Subramanian also raises some challenges that lead him to question the GDP estimated numbers at 7-7.5%. Firstly, he asserts that the latest GDP numbers don't align with certain indicators, such as the implied inflation being at 1 to 1.5%, while actual inflation stands at 3-5%. Although economic growth is reported at 7-7.5%, private consumption is only at a mere 3%. Other indicators include the decline in Foreign Direct Investment share in GDP. He questions why, despite India having the opportunity to be a 'China +1', the FDI share has fallen. Mr. Subramanian also mentions that private and corporate investments are below the levels of 2016, significantly lower than during the economic boom of the 2000s. Here's an excerpt from that exclusive conversation