Real State of the Economy 2025

What happened to

growth?

AICC Research Department

Real State of the Economy 2025

What happened to

growth?

AICC Research Department i

ii
 Table of Contents

Chapter Topic Pages

Executive Summary i-ix

1 Unemployment Crisis 1-10

2 Uninspiring and Unequal GDP Growth 11-16

Stagnant Incomes, Low Household

3 17-25
Consumption, and Declining Savings

4 Manufacturing in Decline 26-32

5 Trade and Investment 33-40

6 An Eroding Welfare State 41-50

7 MGNREGA Under Attack 51-55

8 Agrarian Crisis and Farmer Distress 56-63

9 Inflation 64-70

10 Crony Capitalism 71-81

11 BJP’s Attacks on Institutions 82-90

12 Suppression of Critical Data 91-95

Acknowledgements 97

iii
iv
 Executive Summary
India’s GDP growth for 2024-25, as per government data, is expected to be
6.4%. This rate of growth is not a cause for celebration. If India is to encash
its historic demographic dividend, sustained GDP growth of at least 8%
is necessary. Unfortunately, over the last few years India has consistently
failed to achieve these targets. The Modi government is marching India
forward into the middle income trap, which will make us uncompetitive,
underproductive, and unequal.
GDP growth in the 6% range is insufficient to create jobs for our growing
youth population, especially when rapid technological change is
disrupting the future of jobs. It will keep India stuck in a state of high
inequality, where two-thirds of our population remain dependent on
free grains from the government, while the Prime Minister’s favoured
few accumulate wealth rapidly. Such economic underperformance robs
millions of the Constitution’s promise of a more just, prosperous, and
equal future.
But the Modi government appears focused on enriching his coterie
of corporate supporters. In 2019, it announced a massive tax cut for
corporations, but the private sector has not stepped-up investment in
return. Common people and small businesses continue to be burdened
with punitive taxes on fuel and an extractive Goods and Services Tax
regime. The unplanned COVID-19 lockdown, the harshest in the world,
brought the economy to a standstill. The following years, some unequal
recovery ensued but that too is tapering off. In every corner of the
country, families, workers, farmers, and businesses are feeling the weight
of the government’s failure to deliver on its core commitments and poll
promises.
The first step toward fixing the economy is to acknowledge what is
going wrong. Instead, the government has consistently discredited
unfavourable data and stayed in a state of denial. This report aims to set
record straight by providing a clear picture of various crucial dimensions
of the economy. Such constructive criticism is intended to point toward
ways to restore India to a future of prosperity, opportunity, and inclusive
growth.
Let us therefore examine the different dimensions of India’s economic
malaise:

i
 UNEMPLOYMENT CRISIS

Jobs, the cornerstone of Prime Minister Modi’s

pitch to the youth, are nowhere to be found. Indian
youth continue to struggle due to lack of gainful
employment. Factories have shut down, small
businesses are struggling to survive, and the dreams
of an entire generation have been crushed. The
Modi government’s abject failure to address India’s
unemployment crisis has left the country reeling under the weight of
broken promises and economic mismanagement.
Æ Youth unemployment stood at a staggering 45.4% in 2022-23.
Practically every second young person is jobless.
Æ Joblessness is particularly high among the educated youth.
Graduates face a 29.1% unemployment rate.
Æ There has been serial job destruction in the formal sector. The share
of manufacturing in the workforce has declined from 12.6% in 2011-12
to just 11.4% in 2023-24. More people are moving back to farms when
they should be working in the factories.
Æ For the first time in decades, the share of workers engaged in
agriculture has increased rising from 42.5% in 2018-19 to 46.1% in
2023-24.
Æ Due to lack of quality job creation, over over half of men and two-
thirds of women are now self-employed, typically in low-productivity
and low-income jobs.
Æ Job growth in the non-farm sector has dropped from a high of 75
lakh per year under the UPA to just 29 lakh per year under the Modi
government.

UNINSPIRING AND UNEQUAL GDP GROWTH

The 2024 GDP growth estimate of 6.4% is a sharp

decline from the 8.2% recorded the previous year,
despite favourable conditions like a normal monsoon
and no major external shocks. This is the unmistakable
result of a decade of economic mismanagement, and

ii
it spells disaster for the millions of Indians already struggling under
mounting inequality.
Æ The decade of BJP rule has seen a fall in average growth to 6%,
compared to the 7.6% average under the Congress-led UPA.
Æ India faces a "Middle Income Trap," with per capita income growing
at a sluggish pace of just 4.52% since 2014.
Æ The benefits of growth have been disproportionately captured by
the richest, with the number of billionaires increasing to 200 and
their wealth rising 41% in 2024 - while the vast majority of Indians
grapple with stagnant incomes.
Æ Income inequality in India has worsened to levels unseen even under
British rule, with the top 1% controlling over 40% of the nation's
wealth.
Æ Meanwhile, one-third of Indians survive on less than Rs. 100 a day.
Æ Government debt (including states) has soared to an unsustainable
83% of GDP, leaving future generations to cope with this heavy fiscal
burden.

STAGNANT INCOMES, LOW HOUSEHOLD

CONSUMPTION, AND DECLINING SAVINGS

From workers in agriculture and construction to

salaried employees, incomes have remained stagnant
or, in some cases, even declined. This stagnation,
coupled with high taxes and poor policy decisions, has
eroded household savings and crushed consumption,
driving millions further into debt.

Æ Since 2014, real wage growth has been abysmal: agricultural labourers
have seen an increase of just 0.8%, non-agricultural workers 0.2%,
and construction workers have faced negative wage growth.
Æ Salaried workers, too, have seen their wages decline by 1% annually.
Æ Household savings have plummeted to a 47-year low, while
consumption growth has hit a 20-year low, with private consumption
growth falling to 4% in 2023-24.

iii
 Æ The poorest 20% of households have faced the harshest income
losses, with their earnings dropping by more than 50% by 2021.
Æ Household debt has soared, with a record 39% of GDP tied up in
debt.

MANUFACTURING IN DECLINE

The Modi government’s flagship “Make in India” initiative,

aimed at revitalising India’s manufacturing sector, has been
an unmitigated failure. Manufacturing, which was supposed
to be the engine of job creation and industrial growth,
is struggling under the weight of inconsistent policies,
regulatory confusion, and systemic neglect.
Æ Manufacturing growth has limped along at a mere 5.8% annually,
well below the promised 12-14%.
Æ The share of manufacturing in India’s GDP has remained stagnant
at 15.8%, falling far short of the 25% target set for 2022.
Æ The promise of creating 100 million manufacturing jobs by 2022
has evaporated, with manufacturing jobs halving between 2016
and 2021.
Æ The Index of Industrial Production (IIP) has grown at a lacklustre
average of just 3.2% annually, with critical sectors like textiles and
electrical equipment suffering negative growth.
Æ Small and medium enterprises (SMEs) have been hit hardest, with
24 lakh units shutting down between 2015-16 and 2021-22, and 81
lakh manufacturing jobs lost during this period.

TRADE AND INVESTMENT

In the past decade, India’s trade and investment

performance has taken a devastating hit. India’s
export sector is at its weakest in years, while foreign
investment is dwindling. Private investment has not
picked up. The government’s inability to address
this economic malaise has put India on a path of
stagnation.

iv
Æ Exports, once at 25.2% of GDP under the UPA, have now plummeted
to below 20%.
Æ Instead of building self-sufficiency, our industrial reliance on China
has increased, with imports surging by 83% since 2019-20 (compared
to 17% growth in exports)
Æ Investments (Gross Fixed Capital Formation) has averaged 29%
since 2014. During UPA, average investments were consistently
above 30%.
Æ Investments are not only sluggish but on a downward trajectory,
with new project announcements by the private sector falling by
21% between FY23 and FY24.
Æ Foreign Direct Investments (FDI) as a percentage of GDP has
dropped to a pitiful 0.8% in 2023.
Æ Complex taxation and rising red tape are directly responsible for the
fall in investments. Even after an extractive GST, net revenues have
grown slower than they did in the pre-GST years.
Æ In labour-intensive sectors like garments, exports have actually
fallen - from $15 billion in 2013-14 to $14.5 billion in 2023-2024.
Æ An estimated 21,300 millionaires – individuals with total assets
greater than $ 1 million – left India between 2022 and 2025.

AN ERODING WELFARE STATE

The Modi government has systematically dismantled

the welfare state, leaving millions of citizens to fend for
themselves. Social safety nets for the most vulnerable
have been torn apart, with government schemes
slashed, essential services gutted, and inequalities
deepened.
Æ Despite the pandemic's severe impact, budget allocations for food
security have plummeted.
Æ India's position on the Global Hunger Index has steadily worsened.
India ranked 105th out of 127 countries in 2024.
Æ Chronic malnutrition affects over 38% of children.
Æ Budget cuts have slashed essential welfare schemes, including the
National Food Security Act and the PM Matru Vandana Yojana.
Æ The failure to conduct the decadal Population Census means that

v
 a minimum of 10 crore Indian citizens have been denied rations
guaranteed to them through the National Food Security Act (2013)
Æ Healthcare allocations have been slashed, with the health budget
now just 0.27% of GDP, far from the 2.5% target set by the National
Health Policy.

MGNREGA UNDER ATTACK

The Mahatma Gandhi National Rural Employment Guarantee

Act (MGNREGA) has been a crucial lifeline for millions of
rural families, especially during the COVID-19 pandemic. Yet,
under the Modi government, this essential programme has
faced relentless attacks, as the government has steadily cut
its budget allocations, deleted job cards, and introduced
reforms that jeopardize the livelihood of rural workers.
Æ Despite the increasing demand for MGNREGA work, the
programme’s budget share has plummeted from 2.15% in 2019-20
to just 1.33% in 2023-24. The 2024-25 allocation failed to meet the
scheme’s requirements.
Æ Nearly 4 crore job cards were deleted between 2019 and 2024.
Æ By imposing an Aadhar-based payment system, the government
has excluded nearly 50 lakh workers from wage payments.
Æ MGNREGA wages have been growing at measly rates – despite
consistent demands from workers and the Parliamentary
Committee on Rural Development to raise them to Rs. 375 per day

AGRARIAN CRISIS AND FARMER DISTRESS

India's agricultural sector, which employs nearly half

the population, faces a deep crisis under the Modi
government’s economic mismanagement. Despite
the workforce’s heavy reliance on agriculture, its
contribution to the economy has drastically shrunk,
with growth falling from 4.7% in 2022-23 to a mere
1.4% in 2023-24 – the lowest in eight years.
Æ 70% of farmers earn Rs. 11,000 to Rs. 13,500 per month, with barely
any surplus after covering their basic consumption.

vi
Æ Post-COVID, 56 lakh workers were absorbed into agriculture, but
with stagnant output, these workers face disguised unemployment
Æ Over 55% of agricultural households are in debt, with an average
liability of Rs. 91,231.
Æ Despite this, the consistent demand made by farmer organisations
for an agricultural loan waiver has been ignored.
Æ Dr Manmohan Singh’s government increased the Minimum
Support Price (MSP) for wheat by 119% and for rice by 134%, while
the current Government has raised it by about 47% for wheat and
about 50% for rice. These increases are highly inadequate to cover
the comprehensive input costs borne by farmers
Æ Despite assurances made by the Government to the farmers during
the Farm Protests, the Government has refused to make MSP a legal
guarantee or set prices according to the Swaminathan Commission’s
formula
Æ PM-KISAN has not been indexed to inflation, with farmers continuing
to get the flat Rs. 6,000 they received in 2019 – despite high inflation
in the intervening years.
Æ PM Fasal Bima Yojana has been a flop, with farmers struggling to
get adequate insurance payments on time
Æ The tragic consequence of the agrarian crisis is the 1,00,474 farmer
suicides between 2014 and 2022.

INFLATION

The Modi government's economic policies have

worsened inflation, eroded real incomes, and
undermined the livelihoods of the Indian people.
Inflation is eating away at purchasing power. Food
costs have risen faster than incomes, leaving families
with less for essential needs like healthcare and
education.
Æ In 2024, the cost of a home-cooked vegetarian meal rose by 10%.
Æ From 2009-14, under UPA II, wages grew by 8.6% for farm workers
and 6% for non-farm workers. In contrast, during PM Modi's tenure,
farm wage growth fell to -0.6%, and non-farm wages saw a decline of
-1.4%, making it even more difficult for people to cope with inflation.

vii
 Æ Excise duties on petrol and diesel have been increased by over 100%
(petrol) and 343% (diesel) since 2014.
Æ Inflation has eroded the returns on Fixed Deposits (FDs), once
considered a reliable investment option for retirees.
Æ The rupee has depreciated from Rs. 58 per dollar in 2014 to over Rs.
86 per dollar, increasing the costs of imports and stoking further
inflation.

CRONY CAPITALISM

Crony capitalism has become a defining feature

of India's political economy. PM Modi's close ties
with billionaires like Adani and Ambani have fuelled
the rapid concentration of wealth in the hands of a
few, with the government acting as a facilitator of
their corporate empires. While ordinary Indians face
unemployment and rising inequality, these business
magnates have thrived, benefiting from lucrative
government contracts and favourable policies.
Æ Public sector banks have been exploited in order to finance corporate
expansions, with over Rs. 9.90 lakh crore written off in the past five
years.
Æ The Adani group’s debt ballooned to Rs. 1.1 lakh crore, with public
sector investors in the group like LIC and SBI exposed to massive
financial risks.
Æ PM Modi’s diplomatic engagements have increasingly served the
Adani group’s expansion, which has secured deals shortly after the
PM's visits to countries like Sri Lanka, Kenya, and Bangladesh.
Æ The Adani group’s growing involvement in India’s defence sector
is alarming for India’s national security. With minimal experience,
Adani has secured high-profile defence contracts, sidelining both
established players and domestic startups.
Æ Anil Ambani’s windfall from the Rafale deal, despite his inexperience,
and his subsequent bankruptcy, is a commentary on the perils of
PM Modi’s crony capitalism, where national security is compromised
to favour a handful of businessmen.
Æ As Former RBI Deputy Governor Viral Acharya has established, 5 big
conglomerates - including the Adani Group – are building monopolies

viii
 in 40 sectors, including cement. In 2015, when a common man used
to spend Rs. 100 on goods, Rs. 18 would go as profit to the business
owner. In 2021, the owner now gets Rs. 36 in profits.

BJP’S ATTACKS ON INSTITUTIONS

The BJP government has unleashed a relentless

assault on India’s institutions, systematically
weakening their autonomy and accountability.
Once revered for their ability to ensure transparency,
governance, and public trust, these institutions
are now increasingly becoming tools of political
expediency, fostering crony capitalism, economic
mismanagement, and a breakdown of accountability.
Æ The Insolvency and Bankruptcy Board has failed to deliver effective
corporate resolutions. High creditor losses, massive haircuts, and
delays are routine. Influential corporates have gained from distress
sales at the expense of creditors.
Æ The Modi government has undermined the Reserve Bank of India's
independence, including through controversial appointments
and the invocation of Section 7, which allowed direct government
intervention in the central bank's operations.
Æ The Electoral Bonds scheme facilitated opaque political funding
mainly to the ruling party. When the Supreme Court mandated the
disclosure of Electoral Bonds data, a clear pattern of intimidation by
tax authorities to seek “post-raid” donations for the BJP was revealed.
41 corporate groups, facing a total of 56 ED/CBI/IT raids, gave Rs. 1,853
crore to the BJP after they were raided.

SUPPRESSION OF CRITICAL DATA

The suppression of key data or significant delays in

the availability of crucial economic data have become
a pattern in the last decade. This has the effect of
distorting policies and hindering accountability.
When data reveal unfavourable patterns, the
government typically claims that the methodology
is flawed. By withholding important information,
the government has compromised the accuracy of

ix
 national data and made it harder to address critical issues in areas like
health, education, and employment.
Æ The 2021 Census, essential for demographic planning and resource
allocation, has been delayed for years after the COVID-19 pandemic
ended.
Æ Several indices have not been updated for multiple years while
official reports critical of government’s performance are dismissed
and disowned.
Æ The 2017-18 Periodic Labour Force Survey, which revealed a 45-year
high in unemployment, was withheld for release until after the 2019
elections.
Æ India’s international credibility is compromised when the
government dismisses global indices like the Global Hunger Index,
without addressing their findings.

x
Unemployment
1

CHAPTER
Crisis
Where are the Jobs?
In the run-up to the 2014 general elections, then PM
candidate Narendra Modi made tall promises to create
jobs for every job seeker – a total of two crore jobs a year.
These promises were quickly forgotten after PM Modi
assumed power. Thereafter, demonetisation and a hastily
implemented and flawed Goods and Services Tax (GST)
regime wrecked the economy. India’s youth, who were
concerned about job-less growth now had to face job-loss
growth, as the economy’s growth momentum reversed,
and employment shrank.
In 2017-18, the National Sample Survey Office (NSSO) ...India’s
approved a report based on the Periodic Labour Force unemployment
Survey (PLFS) which showed that India’s unemployment rate had touched
rate had touched a 45-year high of 6.1%.1 The government’s a 45-year high
response was to withhold its official survey (leading to the
of 6.1%... The
resignation of two members of the National Statistical
government’s
Commission). This attitude of denial and deception has
been the government’s strategy to deal with the response was
unemployment crisis, (and indeed with findings that show to withhold its
the government’s performance in a bad light). official survey
As a result, unemployment remains unreasonably high.
When the COVID-19 pandemic raged, the sudden, ill-
planned lockdown enforced by the Modi government had
the effect of turning job losses into massive job destruction.
The impact was visibly felt by migrant workers who were
forced to walk hundreds of kilometres to their native villages,
where they added to India’s already underemployed
agricultural workforce.
Despite the Modi government’s attempts to deny the
severity of the unemployment crisis, a closer examination of
Indian labour markets points to signs of deep distress. The
government’s own employment data unveils a troubling
dimension: the deteriorating quality of jobs, a crisis of youth

1 [Link] 1
rate-at-five-decade-high-of-6-1-in-2017-18-nsso-survey-119013100053_1.html
 unemployment, the surge in informal labour, and stagnant real
wages.

Youth Unemployment Rate at 45.4%

Every Second Young Person is Jobless
The second term of the Modi government was characterised by high
levels of unemployment, particularly among the youth. This has been
one of its biggest challenges. Despite the government’s assertions of
declining unemployment, data from the Centre for Monitoring Indian
Economy (CMIE) showed that in FY 2022-23, youth unemployment
reached 45.4%, i.e., practically every second young person was
jobless.2

Figure 1.1 Source: Centre for Monitoring Indian Economy

The problem is accentuated by the fact that education is actually

diminishing the job prospects of youth, thus belying the hopes
of families who have invested their scarce resources in sending
their children to college. This may be caused by factors such as the
diminishing quality of education and a mismatch between what is
taught in the classroom versus what is needed in the market. A study
by the International Labour Organisation reported that graduates
had an unemployment rate of 29.1%.3

2 [Link]

2 3 [Link]
jobless-if-they-are-educated-ilo-data-124032900038_1.html
 Figure 1.2 Source: Bloomberg4

India’s Stagnating Labour Force and

the Impact on Women
The labour force participation rate (LFPR) trends from 2011-
12 to 2022-23 indicate stagnant employment growth and
ongoing gender and regional disparities. The male labour
force participation rate in both rural and urban areas has
remained stagnant. Female labour force participation rates
exhibit more significant fluctuations and lower overall levels
...the large-scale
of participation. The rural female labour force participation
entry of rural
rate experienced a sharp decline in the years prior to the
pandemic before rising to 41.7% in 2023-24.56 women into
the workforce
Considering the backdrop of the pandemic, economists
indicates
argue that the large-scale entry of rural women into the
workforce indicates signs of rural distress, as women were signs of rural
compelled by economic distress to seek employment. distress, as
Further, large numbers of women are working in unpaid, women were
care-related jobs or on family agricultural holdings. In compelled
comparison, the urban female labour force participation by economic
rate, has remained consistently lower than for rural females, distress to seek
and has only shown a modest upward trend from 2019-20 employment
onwards.

4 [Link]
young-indians-more-likely-to-be-jobless-if-theyre-educated/
articleshow/[Link]
5 [Link]
PLFS_2022_23N.pdf
6 [Link] 3
Report%2C%20PLFS%202017-18_31052019.pdf
 While more women are part of the workforce, very few have
access to regular salaried jobs. In 2017-18, every fifth job a
woman held was salaried. The job destruction in a slowing
economy has meant that now less than 16% jobs held are
regular and a majority of the workforce is self-employed.

Figure 1.3 Source: Business Standard7

Quality of Jobs: Rise of Informal Labour

In the absence of robust good quality job creation, there
has been a sharp rise in the proportion of self-employed
individuals within the workforce. Currently, over half of
... at the current men (53.6%) and more than two-thirds of women (67.4%)
growth rate, are categorised as ‘self-employed’.8
India will fall
The share of regular wage workers has fallen while there has
short of creating
been a rise in those self-employed. Ideally, with economic
the 12 million
growth, however moderate, more salaried jobs should have
jobs yearly been created.
which are
A 2024 report by Citigroup India indicates that at the current
necessary to growth rate, India will fall short of creating the 12 million
accommodate jobs yearly which are necessary to accommodate new
new entrants entrants into the labour market. The report also underscores
into the challenges related to job informality and quality, noting
labour market a decline in formal sector employment compared to pre-
pandemic levels.

7 [Link]
women-increased-to-67-in-2023-24-plfs-data-124092601012_1.html
4
8 Periodic Labour Force Survey 2023-24
 Status of Employment

19.8 2023-24
Casual
24.9 2017-18
Labour
21.7
Regular
22.8
Wage/Salary
19.8
Casual
24.9
Labour
58.4
Self
Employed 52.2

0 10 20 30 40 50 60

Figure 1.4 Source: Periodic Labour Force Survey 2017-18 and 2023-24

Figure 1.5 Source: Business Standard9

Reversal of Structural Transformation:

Decline of the Manufacturing Sector
During the UPA years, there were concerted efforts to reduce
dependency on agriculture and focus on the manufacturing
and service sectors. Between 2004-05 and 2011-12, the
percentage of workers engaged in agriculture declined from
58.5% to 48.9%, while the number of workers in manufacturing
increased, reaching its peak at 12.6% in 2011-12.

9 [Link]
plug-jobs-gap-even-with-7-growth-says-citigroup-124070600149_1.html 5
 However, since 2015-16 there has been a decline in jobs in
the manufacturing sector while the post pandemic period
has seen a steady rise in agricultural jobs, leading to a
reversal of the structural transformation that the economy
witnessed between 2004 and 2012.10
Since 2018-19, the percentage of workers engaged in
agriculture has increased from 42.5% to 46.1% in 2023-24.
At the same time, workers engaged in the manufacturing
sector have declined from 12.1% to 11.4%. This growth in
agricultural jobs is counter to the universal pattern followed
... The ILO’s India by economies as they develop.
Employment Manufacturing has gone from being the sector with
Report 2024 the second largest employment in 2017-18 to the fourth
describes India’s largest in 2023-24. Unlike other countries where the growth
structural process has been manufacturing-led, India’s growth has
transformation been driven by the services sector. The International Labour
as “stunted" Organisation’s India Employment Report 2024 describes
India’s structural transformation as “stunted.” 11

Figure 1.6 Source: Indian Express12

10 [Link]
record-no-jobs
11 [Link]
bangkok/@sro-new_delhi/documents/publication/wcms_921154.pdf

6 12 [Link]
explained-economics-agriculture-and-employment-8480945/
Shrinking MSME/Informal Sector
Employment
Successive economic shocks over the decade –
demonetisation, a hasty, flawed GST in 2017, and an ...In the
unplanned COVID-19 lockdown have adversely affected the informal sector,
informal sector. These disruptions have collectively strained 24 lakh
small businesses, resulting in a significant decline in both enterprises
the number of operational enterprises and the employment
shut down
they generate. Stringent compliance requirements and
between
other policies of the government have pushed informal
entities to shut down.13
2015-16 and
2021-22 and
Analysis of the latest Annual Survey of Unincorporated
manufacturing
Enterprises shows that between 2016 and 2021, the number
of workers in the informal sector declined by 1.3 crore.
employment
reduced by
In the informal sector, 24 lakh enterprises shut down
81 lakhs
between 2015-16 and 2021-22 and manufacturing
employment reduced by 81 lakhs.

Figure 1.7 Source: BusinessLine

13 [Link]
fewer-manufacturing-entities-in-informal-sector-in-2021-compared-to-2016/ 7
[Link]
 Vacancies in Government Jobs
3 Jobs per 1000 Applicants
Despite the BJP’s promises to stimulate job growth across various
sectors, it has ironically struggled to fill its own ranks within the union
government. According to the Department of Personnel and Training,
over 2.22 crore individuals applied for central government positions
between 2014 and 2022, yet a mere 7.22 lakh were successfully
employed.14
For every 1000 applications, only 3 jobs are being created in the
government sector.

Figure 1.8 Source: Outlook Business15

Underemployment
A paper by the Ministry of Statistics in May 2024 finds that India is
grappling with the issue of high underemployment. Many individuals,
particularly the youth, are employed in positions that do not match their
skill sets, leading to lower wages and job dissatisfaction. A report by the
International Labour Organisation (ILO) highlights that the pandemic

14 [Link]
8
15 [Link]
exacerbated these issues, with many taking lower-paying jobs or facing
informal and insecure employment arrangements. The lack of adequate
job creation, particularly in non-farm sectors, and the mismatch between
skills and available jobs, highlights the need for structural changes in
India’s labour market to address the issue of youth underemployment.16v17

The Government’s Claims of Job Creation

The government has taken to using the KLEMS database of the Reserve
Bank of India (RBI) to claim that substantial job creation is taking place.
However, economists regard the KLEMS database as unreliable as it also
includes the informal economy. The government’s own PLFS showed that
self-employment has increased to 58.4% in 2023-24 from 52.2% in 2017-18,
and the percentage of workers who had regular wages had dropped to
21.7% in 2023-24 from 22.8% in 2017-18.” 18 Former Chief Statistician of India,
Pronab Sen, points out: “The data shows increase in self-employment
activities, which means that people are working to survive in absence of
new jobs. It is incorrect to say that these are all additional jobs created in
the economy.” 19

Figure 1.9 Source: Economic Survey 2023-24

16 [Link]
govt-3506537/
17 [Link]
delhi/documents/publication/wcms_921154.pdf
18 [Link]
familiar-jobs-growth-story
19 [Link] 9
familiar-jobs-growth-story
 Indeed, the government’s own Economic Survey released in July
2024 contradicts the claim of substantial job creation by pointing
out that the “Indian economy needs to generate an average of
nearly 78.5 lakh jobs annually until 2030 in the non-farm sector to
cater to the rising workforce.”20
The Economic Survey also refers to a NITI Aayog study that shows
that the “gig economy” created 77 lakh jobs in 2021-22 and is
expected to employ 2.35 crore by 2029-30, or 6.7% of India’s non-
agricultural workforce.21 In this context, it is important to heed the
ILO’s warning that “gig jobs” are essentially temporary jobs which
blur the distinction between formal jobs and self-employment
and raise questions about workers’ working conditions.22

Suicides Due to Unemployment

Ultimately, it is important to note that the unemployment crisis has
also resulted in tragic consequences. According to the Accidental
Deaths and Suicides Reports, between 2018 and 2022, a total of
15,851 individuals died by suicide due to unemployment.23

Figure 1.10 Source: Accidental Deaths and Suicides Reports 2018-2224

20 [Link]
21 [Link]
22 [Link]
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source=contentofinterest&utm_medium=text&utm_campaign=cppst&pcode=462
23 [Link]
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10 24 [Link]
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Uninspiring and 2

CHAPTER
Unequal GDP Growth
On January 7, 2025, the National Statistics Office (NSO)
released the advance estimates of GDP for the financial
year 2024-25. Real GDP is estimated to grow at 6.4%. This
represents a fall in the growth rate of nearly two percentage
points (GDP growth in 2023-24 was 8.2%) despite a normal
monsoon and no major external shocks. This is a warning
sign which tells us that the economy is being mismanaged
and foretells increased hardships and lost opportunities for ... last decade
crores of our people. under Prime
The last decade under Prime Minister Narendra Modi has
Minister
been characterised by uninspiring and unequal economic Narendra
growth. GDP growth rates declined continuously after Modi has been
demonetisation and the hasty implementation of the GST characterised by
regime, collapsed during the COVID-19 pandemic, recovered uninspiring
immediately after that, but is now underperforming again. and unequal
The limited gains the economy made have been largely economic
cornered by the richest sections. With the growth rate growth...
falling sharply, poverty and inequality will rise drastically.

Figure 2.1 Source: Times of India1

1 [Link] 11
estimates-gdp-growth-at-6-4-in-fy25/articleshow/[Link]
 2014-24 – A Lost Decade for the Indian Economy
When the Congress-led UPA left office, the GDP growth was a respectable
6.4%. In the decade that the UPA was in power (2004 to 2014), the average
growth rate was 7.6%, despite shocks such as the global financial crisis in
2008. In the ten years of BJP rule, the average growth has fallen to 6%.
The BJP government failed to capitalise on the ascendant economy
that the UPA left behind in spite of being blessed by low international
oil prices. Apart from policy blunders like demonetisation and the ill-
designed Goods and Services Tax regime, the harshest lockdown globally
in response to the COVID-19 pandemic pushed the economy into a steep
recession. In 2019-20, the growth rate was 3.9%; since the pandemic, it
has averaged 4.8%.
The BJP government claims that India is the fastest growing economy
in the world. However, a long-term average of about 6% will come in the
way of India encashing its demographic dividend. Long-term growth
under 8% will deprive crores of young Indians of opportunities to have
lives better than their parents. The World Bank points out that at current
rates, it will take India 75 years to reach a quarter of the per capita income
of the United States. Clearly, the BJP government has locked India into
the “Middle Income Trap.”2

GDP GROWTH RATE (%)

12
9.8 10.3
9.3 9.7
10 8.3 8.2
8
9.3 8.5 7.4
8 6.8
7.9 6.6 6.5
6 7
6.4
5.5
4 3.9
3.9
2
0
-2
-4
-5.8
-6
2023-24
2017-18
2009-10

2012-13

2022-23
2019-20
2018-19
2014-15
2008-09

2010-11

2013-14
2004-05

2020-21
2016-17
2006-07

2015-16
2005-06

2007-08

2011-12

2021-22

Figure 2.2 Source: MoSPI (2004-05 and 2011-12 series)

2 [Link]
12 years-to-reach-one-quarter-of-us-income-per-capita-says-world-bank-china-11722739911799.
html
India Falling Behind Bangladesh on
Per Capita Income
Since 2014, India’s per capita income (constant prices) has
grown by just 4.52%. While the BJP government claims
record growth, it fails to acknowledge that we are falling
behind even our neighbours. In 2019, Bangladesh overtook
India on GDP per capita and continues to maintain higher
income levels.

GDP Per Capita (US $)

India Bangladesh
3000

2480

1960

1440

920

400
2004

2008
2006

2009
2007
2005

2020

2022
2023
2014
2010

2018
2016

2019
2017
2012
2013

2015

2021
2011

Figure 2.3 Source: World Bank

Unequal Growth
... distribution
Economic Gains Cornered by a Select Few of economic
The distribution of economic gains has also been deeply gains has also
unequal. Incomes of the poor and middle classes have been deeply
either stagnated or shrunk. At the same time, there has unequal.
been an exponential growth in wealth of the top 1%. Incomes of the
► In 2024, the number of billionaires in India increased to poor and middle
200. Their wealth increased 41% from 2023 to almost classes have
touch $1 trillion.3 either stagnated
or shrunk
3 [Link]
indians-make-their-debut-in-2024-know-who-they-are-101712233460963.
html 13
 ► The great wealth creation among the richest gained pace
during the pandemic when most families were struggling to
make ends meet.
► An Oxfam India report estimated that the top 1% in India
owned more than 40% of the total wealth in 2021.4

Income Inequality Worse than it was Under

British Raj
A report by the World Inequality Lab shows that income inequality
in today’s India is worse than a century ago when British ruled
India. The report notes:
“Between 2014-15 and 2022-23, the rise of top-end inequality
has been particularly pronounced in terms of wealth
concentration. By 2022-23, top 1% income and wealth shares
(22.6% and 40.1%) are at their highest historical levels and
India’s top 1% income share is among the very highest in the
world, higher than even South Africa, Brazil and US.”5

Table 2: Income inequality in India, 2022-23

Income Group Adults Income Threshold Average income Ratio to

share (%) (INR) (INR) average
Average 92,23,44,832 100.0 0 2,34,551 1.0

Bottom 50% 46,11,72,416 15.0 0 71,163 0.3

Middle 40% 36,89,37,933 27.3 1,05,413 165,273 0.7

Top 10% 9,22,34,483 57.7 2,90,848 13,52,985 5.8

Top 1% 92,23,448 22.6 20,73,846 53,00,549 22.6

incl. Top 0.1% 9,22,345 9.6 82,20,379 2,24,58,442 95.8

incl. Top 0.01% 92,234 4.3 3,46,06,044 10,18,14,669 434.1

incl. Top 0.001% 9,223 2.1 20,01,98,548 48,51,96,875 2,068.6

Figure 2.4 Source: World Inequality Lab

The average income of people in the top 1% group is almost 75

times the income of a person in the bottom 50% income group.

4 [Link]
story

14 5 [Link]
unequal-than-the-british-colonial-raj/
One-Third of India’s Population Survives on
Less Than Rs. 100/day
Analysis of the recently released consumption survey shows
that almost 34% people survive on less than Rs. 100 per day.
Almost 80% people are surviving on less than Rs. 200 per
day.6

Government Sops for the Rich

At every step of the way, the BJP government has worked
towards advancing the interests of the richest. It did away
with the wealth tax in the name of rationalising taxes and
followed it with introducing a punitive GST regime. In 2019,
it reduced corporate tax rates drastically, leading to an
estimated revenue loss of Rs. 1.45 lakh crore. High GST on
everyday items and no substantial relief in income tax has
hurt the poor and middle classes.

Debt Burden

General GOVERNMENT DEBT TO GDP RATIO (%)

90 88.4

84.9

84 82.7
82.4 83.5 82.5
81.7

78 77.9

75.5 75
74.4
72.8
72 69.7
68.6 69 70.4
67.7
67.7 68.9
68
66 67.1

60
2004

2008
2006

2009
2007
2005

2020

2024
2022
2023
2014
2010

2018
2016

2019
2017
2012
2013

2015

2021
2011

Figure 2.5 Source: International Monetary Fund

A major evolving concern regarding the economy has

been the sharp increase in the general government debt
(comprising central and state government debt). The UPA

6 [Link] 15
expenditure-survey-2022-23
 government brought the debt-GDP ratio down to 67% from
... BJP era under a high of 85%. The BJP era under Prime Minister Modi has
Prime Minister seen a reversal of this trend as the ratio has increased to
Modi has seen a 83% and is pegged to stay in the 80% range. In December
reversal of this 2023, the International Monetary Fund warned that adverse
shocks could take the debt-GDP ratio to 100% by 2027-28.
trend as the ratio
The government has responded that this alarming estimate
has increased
involves a worst-case scenario and is not fait accompli.7
to 83% and is
However, general government debt settling even into the
pegged to stay in
80% range means that the future generations of Indians
the 80% range...
will have to bear a bigger debt burden because of the BJP
government’s terrible record of economic management.

7 [Link]

16
Stagnant Incomes,
3

CHAPTER
Low Household
Consumption, and
Declining Savings
One consistent feature of the Modi government’s tenure has
been stagnant incomes. Across sectors, there has been very
little growth in wages and salaries for the majority of the
people. Since 2014, wage growth for workers in agriculture and
construction has been as low as 1% per annum and in some
cases negative. Salaried workers’ wages have declined by 1%.
At least half the population has seen their incomes reduce
over the years. To make matters worse, common people have
to contend with high personal
income and GST tax rates. While
the Modi government gave
corporations a hefty tax break
in 2019, it has not made any
substantial revision of personal
income tax rates. Since 2022-
23, income tax collections
have surpassed revenue from
corporate taxes.
High taxes are contributing to
the sharp fall in consumption
and a rise in indebtedness. In
2023-24, private consumption
growth fell to a 20-year low.
Household savings have fallen
to a 47-year low. A common
person is consuming less, is
more indebted than before, and
has lesser financial savings to
fall back on.
Figure 3.1 Source: India Today1

1 [Link]
middle-class-income-tax-burden-data-corporate-tax-numbers-2570554-2024-07-23 17
 Negative/Stagnant Wage Growth
... the Modi The Modi government’s tenure has been marked by either
government’s negative or almost no growth in real wages. For most
tenure has Indians, wages define their income levels and their ability
been marked to spend on essential items like nutritious food, education,
and healthcare.
by either
negative or Analysis of Labour Bureau data by noted economist Jean
almost no Dreze shows that between 2014-15 and 2022-23, the real
wage growth for:
growth in real
wages... a. agricultural labourers has been 0.8%,
b. non-agricultural workers has been 0.2%, and
c. construction workers has been negative.

d.

Figure 3.2 Source: The Indian Express2

Wage Growth: UPA vs NDA

It is important to highlight that when Congress-led UPA left
office in 2014, wages had been growing steadily.

18 2 [Link]
communities-are-earning-less-8625367/
► During UPA II, real agricultural wages grew by 8.6%
and non-agricultural wages grew by 6.9% annually.
► This spectacular growth is in sharp contrast with how
incomes fell in Modi 2.0.
► Between 2019-20 and 2023-24, real agricultural wages
decreased by -0.6% and non-agricultural wages fell
by -1.4% annually.3

Real Wage Growth

Real Non-Agricultural Real Agricultural

Wage Growth Wage Growth

UPA-2
(2009-14)

NDA-1
(2014-19)

NDA-2
(2019-24)

-2.0% 0.4% 2.8% 5.2% 7.6% 10.0%

Figure 3.3 Source: The Indian Express4

Salaried Worker Wages Down

Low and falling wages are a widespread phenomenon.
Even salaried workers have seen their monthly earnings
decline by 1% annually. A report by International Labour
Organisation and the Institute for Human Development
(IHD) shows that between 2012 and 2022, earnings have
been falling for most people.5

3 [Link]
real-wages-are-in-decline-9120808/
4 [Link]
real-wages-are-in-decline-9120808/
5 [Link]
workers-dipped-in-2012-2022-period-ilo-report-124040100999_1.html

19
 Figure 3.4 Source: Business Standard

Falling Incomes of Lower and Middle

Classes
The twin strikes of demonetisation and a hastily
implemented GST regime led to income losses for lakhs of
... incomes of
families. The unplanned and sudden lockdown announced
the bottom
during COVID-19 pandemic erased the chances of a swift
60% fell recovery. Since 2014, per capita income (constant prices)
between 2016 has grown by a mere 4.52%.
and 2021. Herein,
A survey by People Research on India’s Consumer Economy
the biggest shows how incomes of the bottom 60% fell between 2016
losses were and 2021.6 Herein, the biggest losses were faced by the
faced by the poorest 20% households as their incomes dropped by more
poorest 20% than half by 2021. Since then, there has been some recovery
households but there is a long way to go.
as their incomes Incomes of the lower middle class and poorest are still
dropped by more below the 2016 levels. Middle class incomes have grown by
than half by less than 3% between this period.
2021s... It must be noted that between 2005 and 2016, a period
corresponding with UPA government’s tenure, the income
of the poorest had risen by a massive 183%.7

6 [Link]
covid-but-poorest-20-still-below-fy16-level-price-study
7 [Link]
distortionsrecovery-can-follow-2/106911
20
 Figure 3.5 Source: People Research on India’s Consumer Economy

One proxy for the earnings of urban Indians is inflation-

adjusted wage costs for publicly listed companies. In the
three quarters of 2024, this metric was below 2%, whereas
the 10 year average was 4.4%, as per a study by Citibank.
This has led to substantial shrinking in the middle class
segment of the consumer market.8

Household Spending at a 20 year Low

Middle class and poor households have been feeling
the pinch of the Modi government’s economic
mismanagement. As incomes fall, there has been a decline
in consumption growth. Demand for two-wheelers and
affordable automobiles are yet to pick up substantially. In
fact, domestic two-wheeler sales are below the 2016 levels.9

8 [Link]
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9 [Link]
by-9-12-in-2023-amid-rise-in-rural-demand-124011200588_1.html
21
 Figure 3.6 Source: Reuters10

The consumer goods sector is struggling as people have cut

down expenditure. This depressing story is borne out by the
private consumption expenditure data. In financial year 2023-24,
consumption growth fell to 4%, the lowest in 20 years barring the fall
induced by the COVID-19 pandemic.

22 10 [Link]
food-inflation-2024-11-13/
 Private CONSUMPTION GROWTH RATE (%)
12.0 11.7
9.4 9.3
8.6 8.7
8.1
8.4 7.1
8.5 7.4 7.3
6 5.9 7.9 6.8
7.2
5.5 6.4 6.2 5.2
4.8 5.2 4

2.9
1.2

-2.4

-5.3
-6.0
2008-09
2004-05
2003-04

2006-07
2005-06

2007-08
2002-03

2023-24
2009-10
2001-02

2022-23
2019-20
2020-21
2021-22
2018-19
2014-15
2013-14

2016-17
2015-16

2017-18
2012-13
2010-11
2011-12

Figure 3.7 Source: MoSPI

One Third of India’s Population Survives on Less

Than Rs. 100/day
Analysis of the recently released consumption survey shows that
almost 34% of Indians survive on less than Rs. 100 per day. Almost 80%
of Indians are surviving on less than Rs. 200 per day.11

Expenditure per Day (in Rs.) and Population Percentage

>1000

500-1000

200-500

100-200

<100

Population (%)

Figure 3.8 Source: The India Forum

11 [Link] 23
survey-2022-23
 Depleting Household Savings
Net Financial Savings Fall to a 47-year Low
Data from the Reserve Bank of India show that household
savings have fallen precipitously and in financial year 2023
(FY23) were at a 47-year low.12 Net financial savings are arrived
at by reducing the borrowings from the gross financial
savings. In FY23, net financial savings fell to 5.1% of the GDP.
A sharp fall in savings can have negative consequence on
consumption.13

Figure 3.9 Source: The Hindu

Record Household Debt

A report by Motilal Oswal Financial Services Ltd estimates
... household that household debt in 2023-24 may have touched an all-
debt in 2023- time high of 39%.14 The report suggests that Indians may be
24 may have borrowing more for non-essential purchases.
touched an The Reserve Bank of India has issued instructions to finance
all-time high companies who issue loans against gold and jewellery to
of 39%... pay more attention to repayment capacity of borrowers

12 [Link]
[Link]
13 [Link]
savings/[Link]
14 [Link]
borrowing-india-s-household-debt-has-likely-surged-to-all-time-
24 high-124042600362_1.html
and to be more careful when renewing loans, instead of
focusing only on the collateral. Banks and Non Banking
... The RBI
Finance Corporations (NBFCs) have seen a substantial
reports that
growth in their gold loans.15
NPAs of gold
Gold is a prized asset in Indian households and families
loans rose
usually pledge gold only as a last resort. The rapid growth in
30% as of June
gold loans suggests that families are desperate for resources
to make ends meet, a very worrisome trend.
2024...

The difficulties faced by poor borrowers can be assessed by

looking at rate of defaults on gold loans. The RBI reports
that non-performing assets (NPAs) of gold loans rose 30%
as of June 2024, to Rs. 6,696 crore, up from Rs. 5,149 crore in
the previous quarter. Commercial banks were significantly
affected as they faced a 62% increase in gold loan NPAs
while NBFCs faced an NPA increase of 24% in the March-
June 2024 quarter.16

15 [Link]
gold-loans-may-soon-come-with-monthly-payment-plans/
articleshow/[Link]?from=mdr
16 [Link]
surge-rbi-june-2024-concerns-124123100452_1.html 25
 Manufacturing 4

CHAPTER
in Decline
In September 2024, the Modi government’s flagship “Make in India”
programme completed ten years of operation. Make in India was
supposed to boost the manufacturing sector but it has failed to
achieve any significant positive results. In fact, the past ten years
have seen inconsistent policies that have hurt manufacturers and
contributed to a job crisis.

Make in India: Target vs Reality

Make in India was launched with much fanfare with the government
listing for itself three major targets. After ten years, it has failed to
meet a single goal.

Target Reality
Increasing manufacturing Manufacturing growth rate has
growth to 12-14% per annum averaged 5.8% since 2013-14.
Increasing share of Share of manufacturing has
manufacturing in GDP to remained stagnant and was at
25% by 2022 15.8% in 2023-24
Manufacturing jobs halved
between 2016 and 2021
Creating 100 million jobs in
the manufacturing sector by The decade of Make in India saw
2022 share of manufacturing in the
workforce decline from 12.6% in
2011-12 to 11.4% in 2023-24

Figure 4.1

Status of Industrial Production

Every time a major corporation sets up a factory/plant in India, the
government propagates it as a sign of a robust manufacturing sector.
A quick look at official figures is enough to dispel such notions.
The Index of Industrial Production (IIP) tracks growth in different
industry groups. IIP has grown from 106.7 in 2013-14 to 146.7 in 2023-
26
24, at a yearly average of 3.2%. A thriving manufacturing industry must
showcase annual growth of 7-8%. Since 2014, most sectors are struggling.
The following table shows the growth rates of different industries. Job
creating sectors like textile, apparel, and electrical equipment have
registered negative growth since 2013-14. Average growth of computer,
electronic, and optical products sector has been 0.6%, transport
equipment industry has grown at 3.4%, and motor vehicles production
has grown at 2.6%.

Product Category CAGR (%)

Food Products 2.5

Beverages 0.6
Tobacco Products -3.5
Textiles -0.4
Wearing Apparel -0.4
Leather and Related Products -1.7
Paper and Paper Products -3.6
Printing and Reproduction of Recorded Media -1.7
Coke and Refined Petroleum Products 2.1
Chemicals and Chemical Products 1.6
Pharmaceuticals, Medicinal Chemical and Botanical
7.4
Products
Rubber and Plastics Products -0.3
Other Non-Metallic Mineral Products 3.4
Basic Metals 6.6
Fabricated Metal Products, Except Machinery and
-0.9
Equipment
Computer, Electronic and Optical Products 0.6
Electrical Equipment -1
Machinery and Equipment 1.6
Motor Vehicles, Trailers and Semi-Trailers 2.6
Other Transport Equipment 3.4
Furniture 4.2
Other Manufacturing -2.1

Figure 4.2 Source: MoSPI 27

 Factory Growth: UPA vs NDA
India needs hundreds of new factories across states to manufacture
products consumed by different classes. The Annual Survey of Industries
underscores how the sector has lost all vibrancy.
Between 2004-2014, under the Congress-led United Progressive Alliance
(UPA) government, the number of factories increased by almost one lakh.
Between 2013-14 and 2021-22, under the Modi government, the number of
factories increased by only twenty-five thousand, an annual growth of 1.3%.
The manufacturing surge during UPA led to more employment
opportunities. The contrast with the Modi era is stark:
► Number of employees in factories grew at 5.6% annually during UPA.
This growth has fallen to 3.1% during the Modi government.
► Similarly, wages to workers grew at 15.3% annually during UPA. It has
fallen to 9.7% since 2014.
► Profits of factories were increasing at 16.9% annually during UPA. Now
they are increasing at a rate of 10.1% per year.
Before marketing and sloganeering took over sound policymaking under
the Modi government, the UPA government worked diligently, and the
results speak for themselves. More factories were set up, more workers
hired, workers paid reasonable amounts, and entrepreneurs made
handsome profits. The business-friendly climate inspired industries to
invest heavily in the sector.

Principal Features of Growth Rate

20
19

16 UPA CAGR
16.9
15.3

NDA CAGR
12
10.1
9.7

8
6.6
5.5

5.6
5.7

5.6

4
3.1
3.4

3
1.3

0
NUMBER OF
FACTORIES

NUMBER OF
WORKERS

NUMBER OF
EMPLOYEES

TOTAL PERSONS
ENGAGED

WAGES TO
WORKERS

GROSS CAPITAL
FORMATION

PROFITS

28

Figure 4.3 Source: MoSPI

The divergence in manufacturing sector’s performance
during the UPA and Modi regimes holds true when
comparing on other parameters. Value added by Indian
manufacturing grew 8.1% between 2001 and 2012. In the
decade after 2013, this fell to 5.15%. Since 2014, manufacturing
value added has fallen consistently.1

Manufacturing, value added (% of GDP) - India

20.0

15.0

10.0

5.0

0.0

2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Figure 4.4 Image Source: World Bank2

Post-COVID-19, multinational companies sought to move

away from manufacturing in China to diversify their ... muddled
supply chain and derisk their dependency on Chinese thinking and
manufacturing. This was an opportunity for India to capture half-hearted
a lion’s share of the market. However, the weakened efforts like
manufacturing sector and the Modi government’s Production
regulatory complexities meant that India failed to capitalise Linked
in time. The muddled thinking and half-hearted efforts like
Incentives
Production Linked Incentives proved insufficient to attract
proved
investments.
insufficient
While there has been a boom in the assembly of mobile
to attract
phones and their exports, this has not arisen from India
investments...
manufacturing components and adding value on top of

1 [Link]
on-the-world-3219167
2 [Link] 29
ZS?end=2023&locations=IN&start=2004&view=chart
 that. Rather, this sector has only seen a shift from imports of final goods to
imports of components, with minimal value addition within the country.3
In 2012-13, before Make in India, exports were around 18% of manufacturing
sales. By 2023, the share had fallen to 6.8% and stood at 1.8% in FY24.
Both listed and unlisted companies have reported a drop in exports as a
percentage of sales.4

Figure 4.5 Source: Business Standard5

Unorganised Sector and Small Enterprises Suffer

24 Lakh Units Shut, 81 Lakh Manufacturing Jobs Lost
The impact of slowing down in the manufacturing sector has been acutely
felt by small and medium enterprises. Demonetisation contributed to
the shutdown of several units. Less than a year later, GST saddled MSMEs
with high compliance costs that directly impacted the profit margins.
Further, between 2017 and 2022, the GST law and regulations had
been amended more than 900 times.6 Regular changes to rates and
compliances hinder the prospects of small units. As the small enterprises
were beginning to find their feet, the unplanned COVID-19 lockdown
deepened the crisis as virtually all units shut down temporarily.

3 [Link]
to-revive-manufacturing-9415061/
4 [Link]
companies-sales-nears-a-record-low-124091701365_1.html
5 [Link]
companies-sales-nears-a-record-low-124091701365_1.html
30
6 [Link]
These disruptions have collectively strained small businesses, resulting in
a significant decline in both the number of operational enterprises and
the employment they generate.7
Analysis of the latest Annual Survey of Unincorporated Enterprises shows
that between 2015-16 and 2021-22, the number of manufacturing units
and workers in the informal sector reduced by 12% and 22% respectively.
In the informal sector, 24 lakh enterprises shut down between 2015-16
and 2021-22 and the manufacturing employment reduced by 81 lakhs.

Figure 4.6 Source: Business Line

Lack of Government Support and

Return of License Raj
What has ailed Indian manufacturing is the lack of consistent, constructive
support from the Modi government. When the COVID-19 pandemic hit,
instead of infusing investments in industries, the government offered
support for them to take loans more easily. At a time of tremendous
uncertainty and collapse of economic activity, when demand was falling
for both consumer and producer goods, there were few takers for such
incentives.
A major concern among entrepreneurs has been the creeping return of
the License Raj. In August 2023, the government announced restrictions
on import of laptops, personal computers, tablets, and other related
items. Faced with criticism (including concerns that this measure was
aimed at favouring one of the government’s favourite crony capitalists),
the decision was deferred.8 Such inconsistent policy making and rising
protectionism weakens investor and industry confidence.

7 [Link]
manufacturing-entities-in-informal-sector-in-2021-compared-to-2016/[Link]
8 [Link] 31
import-restrictions-report-401915-2023-10-13
 Production-Linked Incentive Scheme Fails to Take Off
Manufacturers had pinned their hopes on the Production-Linked Incentive
(PLI) scheme to address some of their concerns and provide a boost to
industry. However, it has failed to generate any major success story.
The government has failed to properly implement the scheme. When it
should have focused on easing regulations, it has done the opposite. The
bulk of the total spending has been cornered by one or two sectors.9 The
poor growth in the Index of Industrial Production shows how PLI has failed
to help the manufacturing sector.
While initiatives like Production-Linked Incentive (PLI) schemes have the
potential to attract investments from both domestic and foreign enterprises,
they cannot replace the need for a stable and predictable business
environment. A lack of coordination among government bodies often leads
to conflicting regulations and delays. For example, reports indicate that
while some ministries sought relaxed visa norms for Chinese technicians
to support the installation of imported machinery, others opposed these
measures, causing significant disruptions to production timelines in Indian
factories. Such inconsistencies undermine confidence in the manufacturing
ecosystem.

Employment Trends in Manufacturing

Manufacturing employment in India has faced an unprecedented crisis
over the past decade. By 2017-18, employment in the sector fell to 55.4
million. This decline coincided with a sharp rise in youth unemployment,
which tripled to 18% in the same period. The sector began to recover in 2021,
with employment surpassing 60 million by 2023-24, but its share of total
employment has stagnated at 11.4%, far below the 2012 levels.10

Conclusion
Despite government narratives touting the success of initiatives like the
PLI scheme and Make in India, industry recovery remains uneven. Much
of the manufacturing activity is concentrated in a few high-profile sectors,
such as electronics assembly, which rely heavily on foreign investments
and imports of components. This limited focus fails to address the broader
need for inclusive growth across diverse industries. The failure of the private
sector to step up investment in manufacturing points to a deeper malaise
ailing Indian industry that goes beyond slack capacity. It suggests a lack
of confidence in the Modi government’s ability to create and nurture an
environment for crucially-needed industrial growth.

9 [Link]
32
10 [Link]
Trade and
5

CHAPTER
Investment
Falling Share of Exports
When the Congress-led UPA government left office,
exports of goods and services as a share of GDP stood at 25.2%. It fell
drastically under the Modi government. Even before the COVID-19
pandemic hit, the share of exports with respect to GDP had fallen to
under 20%.
Indian industries have exhibited resilience and bounced back from
the COVID-19 pandemic but overall exports continue to remain
weak. It is shocking how, despite grand claims, the share of exports
is at a lower level than a decade ago.

Exports of Goods and Services (% Of GDP)

30.0

27.6
24.9 25.2
25.2 23.9
24.5 23.9
22.8 22.6
22.7
20.8
20.2
20.4 20.8
19.8 19.1
19.4
18.0
2023-24
2022-23
2019-20

2020-21

2021-22
2018-19
2014-15
2013-14

2016-17
2015-16

2017-18
2012-13
2011-12

Figure 5.1 Source: MoSPI

The growth rate of India’s exports had been substantial in the

decades since liberalization in 1991. Between financial years 1994 and
2004, the compound annual growth rate of exports was 11.1%. The
growth rate of exports went up further to 17.3% between financial
years 2004 and 2014 under the UPA government. However, the last
decade under the Modi government has seen the compound annual
growth rate of exports come down to 3.3%.1
1 [Link]
global-trade-doubled-since-2005-comparatively-moderated-in-last-10-years-report/
articleshow/[Link]?utm_source=contentofinterest&utm_medium=text&utm_ 33
campaign=cppst
 Continuing and Worsening Trade
Imbalance with China
The poor trade performance has affected India’s strategic
capabilities. After the attack by Chinese soldiers on Indian
forces in May 2020 in Ladakh, there was sincere hope that the
government will work towards correcting the dependance
on China. However, the opposite seems to have happened.
► Since 2019-20, India’s exports to China have risen by
17%, while imports from China have boomed to 83%.
► This sharp divergence between exports and imports
has led to the trade imbalance with China doubling
since 2019-20 from 3.43 lakh crores to 7 lakh crores in
2023-24.2
► India’s total imports (services and merchandise)
increased by 41.59% over the past five years, rising from
USD 602.98 billion in 2019-20 to USD 853.73 billion in
2023-24.3
► Imports from China are filling the shortfall in domestic
industrial production which is unable to cater to
domestic demand.4

Sharp Fall in New Investments

The Centre for Monitoring the Indian Economy (CMIE)
... new reports that in the April-June quarter (financial year 2024-
investment 25), new investment plans fell to a 20-year low. This is in
plans fell to sharp contrast with the investment announcements last
a 20-year year. In the first quarter of 2023-24, investments of nearly Rs.
low. ...in sharp 7.9 lakh crore were announced. These have fallen to 44,300
contrast with crores in 2024-25.5
the investment Projects Today, which tracks new investment projects, stated
announcements that new projects announced by the private sector fell from
last year. 1,253 in Q2 to 1,061 in Q3 of 2024-25. Fresh investment plans
by the private sector have come down from 66.2% of overall
new investments in Q2 to 62.2% of Q3 of 2024-25.6

2 Department of Commerce, Government of India | Data Accessed on July 8

2024
3 [Link]
4 [Link]
highways-india-needs-to-revive-manufacturing-9415061/
5 [Link]
34 plans-decline-to-20-year-low-in-q1/[Link]
6 [Link]
Even in the domain of government investments, the
combined new investments announced by state
governments is 2.28 lakh crores. Thus, states have surpassed
investments announced by the central government in Q3
of 2024-25 which stand at 2.05 lakh crore.7

Figure 5.2 Source: The Hindu

Below Par Investments

(Gross Fixed Capital Formation)
Investments have not fallen only in one quarter. Across the
ten years of Prime Minister Modi’s term in office, Indian
industry has not shown any confidence in the government.
This is despite the substantial tax cut that the Modi
government gave to industry in 2019, when it reduced
corporate taxes from 30% to 22%.
In the first few years after this massive tax cut, it was surmised
that private sector investment was not picking up because
industry had excess capacity. However, the persistent lack
of increase in private sector investment suggests a deeper
malaise and a lack of confidence in the government, among
other factors.

q3-investments/[Link]
7 [Link]
35
q3-investments/[Link]
 Gross fixed capital formation (GFCF) has averaged 29%
since 2014. During the UPA decade, the average GFCF was
consistently above 30%, reaching a record high of 35.8% in 2007.

Exports of Goods and Services (% Of GDP)

40

35.8
37

34.7

34.3
34.0
33.6

33.4
33.2
32.8

34

31.3

31.3
30.7

30.7
30.1

29.6
31

29.5
28.7

28.5
28.3

28.2

28.2

27.3
28

25

Figure 5.3 Source: World Bank

Falling Foreign Direct Investment

The BJP government is fond of claiming record foreign direct
investment (FDI) into India. It cleverly omits that the share of
FDI as a percent of GDP has fallen to 0.8% (2023). Falling FDI
can partly be explained by the substantial delays in various
government departments for clearance of FDI proposals, even
after security clearances have been obtained.

FDI (% of GDP)
4.00
3.6

3.24
2.7

2.4

2.48
2.1

2.1

1.9
2.0

2.1

1.8
1.7

1.6
1.6

1.72
1.5

1.5
1.5

1.4
1.3
0.9
0.8

0.8

0.96
0.6

0.20
2004

2008
2006

2009
2007
2005

2020
2003

2022
2023
2014
2010

2018
2016

2019
2017
2015
2012
2013

2021
2011

Figure 5.4 Source: World Bank

36
The UPA government had presided over a period where
FDI increased sharply, growing from 0.6% in 2003 to a ... share of FDI
record high of 3.6% in 2008. as a percent
FDI is defined as investment in plants and machinery which of GDP has
indicates a long-term commitment of foreign investors fallen to 0.8%
toward the Indian market and growth story. However, in (2023). Falling
recent years, foreign investors are repatriating some of these FDI can partly
resources. This suggests a lack of long-term commitment be explained by
towards India and a desire to exit with profits when the
the substantial
going is good and before the rupee plunges further against
delays in various
the dollar.
government
departments for
clearance of FDI
proposals, even
after security
clearances have
been obtained.

Figure 5.5 Source: India Today8

In financial year 2024, FDI inflows were $70.9 billion.

However, foreign investors repatriated or disinvested $44.4
billion (Rs 3.7 lakh crore). Thus, the net FDI inflows were only

8 [Link] 37
squeeze-2637650-2024-11-22
 $26.5 billion (Rs 2.2 lakh crore) for financial year 2024.9 This
is hardly a sign of confidence among global investors in the
Indian economy.

Maximum Government,
Minimum Governance
The pessimistic sentiment demonstrated by domestic
... In the first and global investors stems from the poor governance
six years, the architecture under the Modi government. Early in his
GST law was tenure, PM Modi had claimed he would turn red tape into
amended a red carpet for businesses. While this holds true for some
more than favoured business houses, others have struggled to get
900 times past the bureaucratic maze.

to clarify Goods and Services Tax remains an enigma for most

‘ambiguities’, businesses.
further, more In the first six years, the GST law was amended more than
than 200 900 times to clarify ‘ambiguities’, further, more than 200
circulars and circulars and instructions were issued during this period.
The rules are ever-changing – between 2017-22, the Modi
instructions
government changed the rules once every other day,
were issued with 869 notifications, 195 circulars 23 instructions and 19
during this
orders.10 A survey conducted in New Delhi shows that 62%
period.
respondents had to pay a bribe to GST officials.11
A recent article shows that compared to Thailand, it is
significantly costlier to set up and run a business in India.
This unease of doing business directly impacts investor
confidence, which is reflected in low fund inflows into the
country as well as in decreased private investment.

9 [Link]
squeeze-2637650-2024-11-22
10 [Link]
asp?ArticleID=10796
11 [Link]
38 doing-business-in-india
 Figure 5.6 Image Source: Bloomberg12

12 [Link]
india
39
 Exodus of High Net-Worth Individuals
... They have
triggered an The lack of confidence in the Modi government’s
exodus of management of the economy, the unease of doing
business, the misuse of government agencies and tax
millionaires
terrorism are having their impact. They have triggered
and High
an exodus of millionaires and High Net-Worth Individuals
Net-Worth (HNIs) from India. In 2022, 7,500 HNIs emigrated, followed
Individuals by 6,500 in 2023 and an expected 4,300 in 2024.13 When
(HNIs) from HNIs leave India, future investments and the tax base are
India. affected, apart from the signaling effect such an exodus has
on other HNIs.
Beyond HNIs, other classes of Indians are also giving up their
citizenship and moving to other countries. In 2023, External
Affairs Minister S. Jaishankar, in response to a question in
the Rajya Sabha, stated that 2,25,620 Indians gave up Indian
citizenship in 2022 alone. He stated that the cumulative
number of Indians giving up their citizenship since 2011 was
over 16 lakhs.14

13 [Link]
produces-far-more-than-those-leaving-henley-report/2142784/

40 14 [Link]
renounced-indian-citizenship-in-2022-govt-data/articleshow/[Link]
An Eroding 6

CHAPTER
Welfare State
From 102 in 2020, the number of billionaires in India has
doubled to 200 in 2024 and the wealth gap within the
country has widened dramatically.1 The recovery from the
COVID-19 pandemic has been K-shaped, with the vast
majority of Indians experiencing increasing difficulties in
making ends meet, while a small section of Indians have
experienced rapid recovery.2 ... the Modi
In the face of growing inequality over the past ten years, the government is
Modi government is systematically dismantling the social systematically
sector, with targeted budget cuts and policy constraints dismantling
eroding welfare schemes across the board.3 For growth to
the social
be inclusive and equitable, it is crucial for the government
sector, with
to provide adequate socio-economic safety nets to support
targeted budget
those still recovering from the pandemic's impact and to
mitigate the effects of rising inflation and the cost of living. cuts and policy
Instead of strengthening existing systems, there has been a constraints
deterioration across various crucial sectors, including food, eroding welfare
health, education, and social security. schemes...

Food Security
Budgetary Cuts, Malnourishment, and India’s
Worsening Ranking on Hunger Index
India’s position on the Global Food Hunger Index has
continuously declined over the past five years.
As per the latest index, India reports ‘serious’ levels of
hunger, the highest child wasting rate and the fifteenth
highest child stunting rate.4

1 [Link]
india/85909/1#
2 [Link]
economy-k-shaped-recovery-shows-the-rich-are-thriving-while-the-poor-
struggle/[Link]
3 [Link]
a-shrinking-welfare-landscape-to-india
4 [Link]
41
 India’s Rankings on the Global Hunger Index 2018-2023

2018 2019 2020 2021 2022 2023 2024

103 102 94 101 107 111 105
out of 119 out of 117 out of 107 out of 116 out of 121 out of 125 out of 127

Figure 6.1 Source: Global Hunger Index 2018-2023

Budget Cuts
Despite the COVID-19 pandemic worsening the food crisis in the country,
the budget allocated to food security has seen a significant decline.
Even with the additional grains provided through the Public Distribution
System (PDS) under the Pradhan Mantri Garib Kalyan Yojana (PMGKY),
current allocations remain lower than pre-pandemic years.5
The failure to conduct the census is leading to the exclusion of crores of
individuals who are entitled to rations under the PDS.6

Allocation to Food Subsidy as % share of Union Budget

8.0 Share of PDS

6.9
6.61
6.8 6.4

5.6
5.24

4.25
4.4
4.38

3.79
3.2

2.0
2014-15 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25

Figure 6.2 Source: IDR and Union Budget 2024-2578

5 [Link]
distributed-under-pmgkay-report-2899061
6 [Link]
census-2011-data/
7 [Link]
census-2011-data/
42 8 [Link]
Other schemes under the National Food Security Act (NFSA)
have also seen budget cuts. While the Modi government
may have renamed these schemes, it has not succeeded in
improving the nutritional standards of women and children
in the country.9

Chronic Malnutrition
Children in India are facing chronic malnutrition. According
to the Poshan Tracker, of over 8 crore children surveyed,
...of over 8
38% were found to be stunted and 17% were severely to
crore children
moderately underweight.10 This means that their cognitive
surveyed, 38%
and physical development will be impaired and they
were found
will grow up limited in their abilities to learn and be fully
productive.
to be stunted
and 17% were
A study published in February 2024 by JAMA Network Open severely to
revealed that India ranks third in the number of children
moderately
aged 6-23 months who had not eaten in the past 24 hours,
underweight...
with approximately 67 lakh children falling into this ‘zero-
food’ category.11
Despite running the ‘Anaemia Mukt Bharat’ campaign,
the prevalence of anaemia among women aged 15 to 49
years increased from 53% in 2015-16 to 57.2% in 2019-20. The
prevalence of anaemia among pregnant women aged 15 to
49 years increased from 50.4% to 52.2%.121314 Anaemia results
in low birth weight and other complications to mothers
and children.
In 2018, the Mid-Day Meal Scheme was rebranded as
POSHAN 2.0 and merged into the umbrella scheme
Saksham Anganwadi POSHAN 2.0, which includes
Anganwadi Services, POSHAN Abhiyan, the Scheme
for Adolescent Girls, and the National Creche Scheme.
This scheme is critical in addressing the nutritional
needs of children. However, the trend of increasing

9 In 2017 Indira Gandhi Matritva Sahyog Yojana was renamed Pradhan

Mantri Matru Vandana Yojana. In 2018 the Integrated Child Development
Scheme was renamed as Anganwadi Services
10 [Link] Accessed on July 14 2024
11 [Link]
[Link]
12 [Link]
13 [Link]
pdf?source=pqals
14 [Link] 43
indias-budget-2024-25/
 Allocation to schemes under NFSA as % share of Union Budget

MDM/PM POSHAN (%)

1.20 ICDS/Saksham Anganwadi

1.08 & POSHAN 2.0 (%)
PMMVY/Samarthya (%)
0.96
0.84
0.8
0.73
0.72
0.57
0.51
0.45 0.43
0.48
0.36
0.39 0.33
0.25 0.25 0.25
0.24
0.08 0.08 0.07 0.06
0.02 0.05 0.05

0.00
2014-15 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25

Figure 6.3 Source: IDR and Union Budget 2024-2515 16

enrolment in private schools poses a serious threat to its reach as the

scheme operates only in government schools.
Similarly, in 2021, the Indira Gandhi Matritva Sahyog Yojana was
rebranded as the Pradhan Mantri Matru Vandana Yojana (PMMVY)
and merged under the Samarthya scheme. In 2017-18 and 2019-20,
Rs 2,700 crore and Rs 2,500 crore were allocated respectively for the
PMMVY. However, after the merger in 2021-22, the combined umbrella
programme received only Rs 2,582 crore.17
Anganwadis which serve as the operational backbone of delivering
nutrition to children and mothers face substantial shortfall in human
resources. As of November 2024, there were 82,065 Anganwadi
Worker positions and 1,31,244 Anganwadi Helper positions unfilled
across the country.18

Education Ignored
Access to affordable education is becoming increasingly difficult
in India. UDISE+ data reveals that there has been a decline in
government and government-aided schools, while the number

15 [Link]
budget-2024-25/
16 [Link]
17 [Link]
welfare-landscape-to-india
44
18 [Link]
of private schools has continued to grow over the past
decade. This transition from affordable public education to
more costly private institutions poses a significant barrier
for our large population of economically and socially
marginalised sections of society, limiting their access to
quality education.19

Decline in Government Schools, Increase in Private Schools

Government Government Aided Private Schools
Managed Schools Schools
2014-2015 11,07,118 83,042 2,88,164
2023-2024 10,17,660 80,313 3,31,108
– 89,458 – 2,729 42,944
Figure 6.4 Source: UDISE+ 20

Huge Teacher Vacancies: According to a 2023 Parlia-

mentary Standing Committee Report, out of the sanctioned
62.71 lakh teacher positions at the state level, 9.9 lakh
posts remain vacant. These vacancies consist of 7.5 lakh
unfilled positions at the primary level, 1.6 lakh vacancies About 25%
at the secondary level, and 92,000 vacancies at the higher of students
secondary level.21 22 Nearly 27% of all teaching positions are aged 14-18
vacant across 45 Central Universities, i.e., 5,182 posts out of
years still
18,956 posts are currently vacant.23
cannot read
Poor Quality Education: The latest Annual Status of a Std II level
Education Report made some startling revelations about
text fluently in
the quality of primary and secondary rural education
their regional
across the country. About 25% of students aged 14-18 years
language, and
still cannot read a Std II level text fluently in their regional
language, and that number increases to 42.3% in English. that number
Over half of all students struggle with division problems. increases to
Only 43.3% of them are able to do such problems correctly. 42.3% in English
This skill is usually expected in class III/IV.24

19 [Link]
20 [Link]/#/
21 [Link]
lie-vacant-in-indias-government-schools-report
22 [Link]
[Link]
23 [Link]
posts-in-central-universities-govt-tells-rajya-sabha-9695131/
24 [Link] 45
[Link]
 NEP Failure: The ‘school rationalisation’ policy under the National
Education Policy has led to the closure of tens of thousands of schools
across the country and is a blatant violation of the Right to Education
Act.25
Reduced Budget Allocation: The allocation for the Department of
School Education and Literacy as a share of total budget outlay reduced
from 3.16% in 2013-14 to just 1.51% in 2024-25. While the allocations for
the Department of Higher Education as share of overall budget outlay
decreased 1.6% in 2013-14 to 0.98% in 2024-25.

Allocation to the Ministry of Education as %

share of Union Budget
Department of School
2.5 Education and Literacy (%)
Department of Higher
2.06 Education (%)
2.1 1.96

1.6
1.7 1.5 1.52 1.51

1.3 1.37
1.29
1.1
0.9 1.0 0.97 0.98

0.5
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Figure 6.5 Source: IDR and Union Budget 2024-252627

The combined allocations for both the departments have declined from
4.77% as a share of the total budget expenditure in 2013-14 to 2.5% in
2024-25. As a share of the GDP this is 0.36%.2829 The National Education
Policy 2020 recommends that the education budget should be 6% of the
GDP.30

25 [Link]
budget-2024-25/
26 [Link]
budget-2024-25/
27 Total health budget: Rs. 90659, GDP: Rs. 32771808
28 Total Education budget: Rs. 1,20,627.87, Projected GDP: 32771808
29 [Link]
30 [Link]
46 increasing-budgetary-allocation-for-education-ensuring-utilisation-will-be-the-key/
articleshow/[Link]
Healthcare Disregarded
COVID-19 exposed significant deficiencies in India’s ...the total count
healthcare system. Instead of investing in and strengthening of empanelled
the system, the Modi government has been reducing hospitals
allocations to the Ministry of Health. Its share of overall under the
expenditure has decreased from 2.31% in 2019-20 to 1.88%31 in programme
2024-25. In contrast, in 2013-14, the health sector allocation remains
was 2.05% of the budget.
significantly
Currently, the health budget as a share of GDP is only 0.27%, low at 30,985
nowhere close to the 2.5% target recommended by the hospitals
2017 National Health Policy.32 33 Allocations to the National
Health Mission, which is crucial to providing primary and
secondary care have decreased from 0.23% in 2019-20 to
0.15% in 2024-25.

Allocation to the Ministry of Health + schemes as

% share of Union Budget
Ministry of Health (%) NHM (%) PMJAY (%)

2.5 2.31
2.2 2.12 2.18
1.98
1.88
2.0

1.5
1.2
1.12 1.06
0.94
1.0 0.81
0.74

0.5
0.23 0.21 0.18 0.16 0.16 0.15

0.0
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25

Figure 6.6 Source: IDR and Union Budget 2024-253435

31 [Link]
32 Total health budget: Rs. 90659, GDP: Rs. 32771808
33 [Link]
would%20be%20achieved%20through,cent%20of%20GDP%20by%202025.
34 [Link]
indias-budget-2024-25/
35 [Link]
47
 Spending on Pradhan Mantri Jan Arogya Yojana (PMJAY)
2019-20 to 2024-25 (in cr.)

BE RE Actuals

7500
7200
8000

6800
6400

6400

6400

6412
6412
6186
6400

4800
3200
3200

3166
3199
2681
2681
3200

1600

0
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25

Figure 6.7 Source: Union Budget 2019-20 to 2024-2536

Budget allocations made to Ayushman Bharat-Pradhan Mantri

Jan Arogya Yojana (PMJAY) have been steadily increased
since 2019-20. In the 2024-25 Budget, allocations to PMJAY
account for 8.2% of the total health budget. With close to
36 crore card holders and 6.86 crore beneficiaries, the total
count of empanelled hospitals under the programme remains
significantly low at 30,985 hospitals. Among these, 17,102 are
public hospitals, while 13,883 are private hospitals.37

Social Security
Budget Allocation Decreased
Budget allocations for the critical National Social Assistance
Programme (NSAP), which provides social and economic
security to crores of vulnerable Indians, have been declining.
While the coverage under this programme increased
marginally from 2.48 crore in 2012-13 to 2.97 crore in 2023, the
budget allocated to this has remained the same over ten years,
stagnant at approximately Rs 9,500 crore. Allocation to NSAP

36 [Link]
48
37 [Link]
as the share of budget outlay has decreased from 0.57% in 2013-14
to just 0.2 % in 2024-25.38 39
Despite being a ‘Core of the Core’ scheme of the central
government, the fiscal burden under this program has been
shifted to the states due to the insufficient funding provided by
the central government. States are contributing 5 to 10 times more
from their own exchequer.40 Despite the increasing cost of living,
the non-contributory income amounts remain just Rs 200 for the
elderly and Rs 300 for widows and persons with disabilities.

NSAP as % share of Budget Outlay

0.70
0.58

0.56
0.48
0.5
0.4
0.42 0.44

0.3

0.28 0.3 0.24

0.2
0.25
0.21
0.14

0.00
2024-25
2023-24
2022-23
2019-20

2020-21

2021-22
2014-15

2018-19
2016-17
2015-16

2017-18

Figure 6.8 Source: The Wire

According to the Economic Survey 2021-22, 93% of India's workforce,

close to 49.33 crore workers, is employed in the unorganised
sector.41 In August 2021, the e-shram portal was launched as a
single platform for the registration of unorganised sector workers
to facilitate their linking with various social security schemes.
However, presently only 30 crore workers out of 49.33 crore are
registered on the platform.42

38 [Link]
39 [Link]
neglected-social-security-pensions-once-again
40 [Link]
neglected-social-security-pensions-once-again
41 [Link]
49
42 [Link]
 In 2019, the Government launched the Pradhan Mantri
... Despite the Shram Yogi Maan-Dhan (PM-SYM) as a contributory old age
increasing
pension scheme for unorganised workers. The scheme's
cost of living,
budget was Rs 350 crore in 2023-24 and fell to Rs 177 crore
the non-
in 2024-25.43 44 45
contributory
income The Social Security Codes 2020, which are still awaiting
amounts notification, present a problematic formulation by
remain just Rs distinguishing between organised and unorganised
200 for the sector workers. It proposes new schemes specifically for
elderly and unorganised sector workers. Unlike the current Employees’
Rs 300 for State Insurance Corporation (ESIC) schemes, schemes for
widows and the unorganised sector are integrated with existing welfare
persons with programmes like the Pradhan Mantri Jan Arogya Yojana,
disabilities. thus failing to provide comprehensive health security for
workers.46 47

43 [Link]
44 [Link]
45 [Link]
46 [Link]
view?usp=drive_link
47 [Link]
prepared-to-provide-extended-coverage-under-the-code-on-social-
50 security-parliamentary-panel/[Link]
MGNREGA Under
7

CHAPTER
Attack
The Mahatma Gandhi National Rural Employment
Guarantee Act (MGNREGA) is a lifeline for the rural poor. It
is an important livelihood security measure which aims to
provide 100 days of guaranteed wage employment to every
rural household.
When Prime Minister Modi mocked the MGNREGA
programme after coming into power in 2015, he
underestimated the profound socio-economic significance
of this scheme. In the years since, MGNREGA has proved to
be the sole saviour for crores of families who bore the brunt
of the COVID-19 pandemic’s devastating impact.
The COVID-19 pandemic and successive lockdowns left
poor migrant workers to fend for themselves. Here’s how
MGNREGA came to the rescue of returning migrant workers
and other rural families:
► In 2020-21, close to 83 lakh new job cards were issued.
► Before the pandemic in 2019-20, a total of 6.16 crore ... Despite the
households requested work under the scheme. clear impact of
► During the pandemic’s peak, the number of households the programme,
demanding MGNREGA work increased to 8.55 crore in the Modi
2020-21 and 8.05 crore in 2021-22. government
► In 2022-2023, 6.9 crore households demanded has dealt
employment.1 repeated
As of January 2025, there are 9.31 crore active workers blows to the
that are employed under the programme, of which MGNREGA
close to 75% are women.2 Despite the clear impact of the scheme that
programme, the Modi government has dealt repeated blows undermine and
to the MGNREGA scheme that undermine and weaken it. weaken it...

1 [Link]
2 [Link]
year=2024-2025&source=national&labels=labels&Digest=O57D2k1AxQj89t4Y
5xNiBg (captured on 12.07.2024) 51
 Grossly Inadequate Budget Allocations
Since 2019-20, the Modi government has steadily reduced
the MGNREGA budget despite growing demand. The share
of the budget allocated to MGNREGA decreased from 2.15%
in 2019-20 to a mere 1.33% in 2023-24, before rising to 1.78%
in the 2024-25 budget due to the increased allocation of Rs
26,000 crore. This is the same as the revised estimates for
2023-24, and Rs 19,230 crore less than the schemes’ actual
expenditure of Rs 1,05,22,983 in 2023-24.3
While this appears to be a massive jump in budgetary
allocations, the reality is that this number is far less than
what is required to meet the demand for work. In 2023,
the People’s Action for Employment Guarantee estimated
that a total of Rs 2.72 lakh crore was required to meet
the demand for the 5.68 crore households that worked
in 2022-23.4 5 6
Close to 20% of the allocated budget is paid towards clearing
MGNREGA dues from the previous year. LibTech India has
calculated that the dues pending from the previous fiscal
year amount to Rs 20,751 crores.7 When adjusted with
the budget allocated for 2024-25, the share of budget
allocated towards MGNREGA decreases to just 1.36% of the
... In 2023-24, overall budget. As share of GDP, allocations have reduced
only 45 lakh from 0.35% in 2011-12 to 0.26% in 2024-25.8 The World Bank
out of 6 crore recommends that at least 1.7% of the GDP should be
households allocated to this programme.9
completed In 2023-24, only 45 lakh out of 6 crore households completed
100 days of 100 days of work.10 Therefore, adequate budget allocations
work. are critical to meet the increasing demand for employment
and prevent delays in wage payments.

3 [Link]
aspx?lflag=eng&fin_year=2023-2024&source=national&labels=labels&Digest
=MZ7EPgZ8ZwgnIaImm+t7hA
4 Calculation based on data upto January 2023, estimation for 100 days of
work
5 A total of 6 crore households worked in 2023-24
6 [Link]
lakh-crore-for-providing-100-days-of-work-say-activists/[Link]
7 [Link]
8 Total NREGA budget: Rs 86,000, Projected GDP:32771808
9 Rinku Murgai and Martin Ravallion, ‘Employment Guarantee in Rural India:
What Would It Cost and How Much Would It Reduce Poverty?’.Economic
and Political Weekly 40, no. 31(2005), pp. 3450–55.
52
10 [Link]
 MGNREGA budgets as a % of GDP over time

0.8
Revised estimates as % of GDP

0.6 0.56

0.4
0.32 0.41
0.30 0.31
0.29
0.35 0.26 0.35
0.32 0.33
0.29 0.26
0.27
0.2

FY 24-25
FY 23-24
FY 22-23
FY 19-20

FY 20-21

FY 21-22
FY 18-19
FY 14-15
FY 13-14

FY 16-17
FY 15-16

FY 17-18
FY 12-13
FY 11-12

Figure 7.1 Source: NREGA Sangharsh Morcha11

MGNREGA is designed to be a demand-driven programme,

i.e., anyone can avail work upon demanding it. However, under
the BJP government, there has been a consistent effort to
transform MGNREGA into a supply-driven scheme. The BJP ... deletion
government’s efforts to limit the programme’s reach is hurting
of job cards
India’s most vulnerable families.
... surged
Deletion of Job Cards dramatically
under
The deletion of job cards under MGNREGA has surged
the Modi
dramatically under the Modi Government. Between 2019-
20 and 2023-24, close to 4 crore job cards were deleted. In Government.
the fiscal year 2022-23, the number of deletions soared by Between
347%, reaching approximately 2.22 crore compared to 50 lakh 2019-20 and
deletions in the previous year. 2023-24,
In this fiscal year, the Government deleted close to 1 crore close to 4
cards while only 57 lakh job cards were included. While crore job
the government justifies these actions, media reports have cards were
highlighted the plight of genuine workers wrongfully removed deleted...
from the job cards.12 13
11 [Link]
7NWEqvWlHL_4niQOC8_LEcEHjrB3LCqXp067gJco_Pw2OGhvy8oGE2/pub
12 [Link]
cards-how-mgnrega-is-dying-a-slow-death
13 [Link] 53
pdf?source=pqals
 Details of number of job cards deleted and included under
Mahatma Gandhi NREGS during the last five financial years.

Financial No. of Job card deleted No. of Job card included

Year (in lakh) (in lakh)

2019-20 14.33 68.04

2020-21 27.97 190.98

2021-22 50.32 120.63

2022-23 225.24 65.59

2023-24 102.07 57.54

Figure 7.2 Source: Lok Sabha, Unstarred Question 3578 14

Aadhar-Based Payment System

On January 1, 2024, the Central government made it
mandatory that all payments for MGNREGA must be
... MGNREGA
through the Aadhar-Based Payment System, i.e., MGNREGA
workers whose
bank accounts workers whose bank accounts are not eligible for ABPS,
are not eligible will no longer receive wage payments for work they have
for ABPS, will already done.15 Out of 25.32 crore registered workers,
21.1 crore have successfully seeded their Aadhar Card,
no longer
and only 18.5 crore have been successfully linked to the
receive wage
NPCI mapper, i.e., only 73% of all workers are eligible for
payments for payment under the APBS.
work they
Out of 13.3 crore active workers as of January 2025, 12.86
have already crore have successfully linked their Aadhar Cards to the
done. NPCI mapper. However, close to 50 lakh active workers
are ineligible for payment under the ABPS.16 This move
again hits India’s most vulnerable workers, even to the
extent of not paying them for work they have already done.

14 [Link]
zBxB7NWEqvWlHL_4niQOC8_LEcEHjrB3LCqXp067gJco_Pw2OGhvy8oGE2/
pub
15 [Link]
workers/[Link]
16 [Link]
aspx?lflag=eng&fin_year=2024-2025&source=national&labels=labels&Digest
=O57D2k1AxQj89t4Y5xNiBg (captured on 12.07.2024)

54
The National Mobile Monitoring System
(NMMS)
The NMMS is an app for marking attendance under
MGNREGA, wherein workers’ pictures are to be uploaded ... Challenges
from the worksite - time-stamped and geo-tagged - twice a
such as the
day. Unless this is done, the workers’ attendance of the day
digital divide,
is not registered, without which they cannot be paid the
limited access
wage for the day. 17 18
to smartphones,
MGNREGA workers and worksite supervisors from across
and disrupted
the country have reported encountering technological
network
issues and glitches with the NMMS app. Challenges such
as the digital divide, limited access to smartphones, and coverage in
disrupted network coverage in rural areas have resulted in rural areas have
unregistered attendance, unrecorded work, and delayed resulted in
wage payments with limited avenues for resolution.19 unregistered
The NMMS app violates the Act and workers’ rights attendance,
by discontinuing physical attendance records, which unrecorded
undermines transparency and hinders workers from work, and
addressing attendance discrepancies. The app’s approach delayed wage
to wage payments on a time-rate basis also violates the Act’s payments with
mandate for piece-rate payments based on work output. limited avenues
The app’s lack of built-in mechanisms to verify attendance
for resolution.
photos further raises doubts about its effectiveness in
combating corruption. 20

17 [Link]
nmms-app-mgnregs#:~:text=NMMS%20App%20is%20used%20to,reply%20
in%20Lok%20Sabha%20today
18 [Link]
app-impacts-workers-pay-in-worlds-largest-rural-jobs-programme-861930
19 [Link]
20 [Link]
app-impacts-workers-pay-in-worlds-largest-rural-jobs-programme-861930

55
 Agrarian Crisis and 8

CHAPTER
Farmer Distress
Agriculture still employs nearly half the population, yet its
contribution to the economy has steadily shrunk.
► The agriculture sector’s growth plummeted from 4.7% in 2022-23
to a meager 1.4% in 2023-24.1 This marks its lowest growth since
2015-16.2
► Over the past decade under the Modi government, growth in
agriculture has been volatile, averaging only 3.6% annually.3

18 Growth of Agriculture and Allied Sectors

16
14
12
10
8
6
4
2
0
-2 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
-4
Crops Livestock Fishing and aquaculture Agriculture

Figure 8.1 Source: Economic Survey of India 2023-244

Agriculture employs 46% of India’s workforce, but contributes a mere

18% to the Gross Value Added (GVA) in the economy.5

1 Economic Survey of India 2023-24,Pages 320 [Link]

economicsurvey/doc/eschapter/[Link]
2 [Link]
Agriculture_and_Farmers_Welfare.pdf
3 [Link]
Agriculture_and_Farmers_Welfare.pdf
4 Economic Survey of India 2023-24,Pages 320 [Link]
economicsurvey/doc/eschapter/[Link]

56 5 [Link]
Agriculture_and_Farmers_Welfare.pdf
 State-wise contribution to GVA and workforce

Contribution to GVA (%) Workforce (%)

60

40

20

0
Agriculture Industry Services
Sector
Figure 8.2 Source: Economic Survey of India 2023-246

As growth in the agriculture sector has stagnated,

our annadatas are grappling with falling incomes,
rising debts, and an uncertain future.
► Over half of India’s agricultural households (55%) are
in debt, with an alarming average debt liability of Rs. ... Over half
91,231.7 of India’s
► Nearly a quarter (24%) of loans taken by agricultural agricultural
households were for domestic needs.8 households
► 70% of the farmers earn between Rs. 11,000 and Rs. (55%) are in
13,500 per month, while their monthly consumption debt
expenditure nearly matches their income, leaving a
meager surplus of less than Rs. 2,000.9

6 Economic Survey of India 2023-24,Pages 320 [Link]

in/economicsurvey/doc/eschapter/[Link]
7 The All India Rural Financial Inclusion Survey (NAFIS) 2021-22, NABARD,
2024 (Pg 74) [Link]
pub_0910240156351156.pdf
8 The All India Rural Financial Inclusion Survey (NAFIS) 2021-22, NABARD,
2024 (Pg 74) [Link]
pub_0910240156351156.pdf
9 The All India Rural Financial Inclusion Survey (NAFIS) 2021-22, NABARD,
2024 (Pg 46) [Link]
pub_0910240156351156.pdf
57
 Figure 8.3 Source: The All-India Rural Financial Inclusion
Survey (NAFIS) 2021-22, NABARD

GST continues to burden India’s farmers while enriching

corporate giants, turning ‘One Nation, One Tax’ into ‘One
Nation, One Exploitation.’
► Tractors and their parts attract 12% GST, making
farm equipment unaffordable for small farmers. A
Parliamentary Committee recommended reducing
GST on parts for tractors up to 40 hp to ease this burden
but the government has not taken this suggestion
forward.10
► While the government reduced GST on pump sets from
28% to 18%, this did not solve the problems faced by
small and medium pump manufacturers. Many had to
stop production when GST was first introduced. Since
80% of pumps in India are used for farming, farmers
faced higher prices and supply shortages during this
period.11

10 [Link]

58 11 [Link]
farm-sector/[Link]
Falling incomes and the Modi government’s exploitative
GST policies have crushed farmers’ purchasing power.
► Farmers now spend less (Rs. 3,702) than the rural
household average (Rs. 3,773).12
► Regular salaried agricultural workers earn only Rs.
3,597, significantly lower than non-agricultural workers
earning Rs. 4,533.
► Due to a lack of government support for meaningful
financial upliftment, 92% of agricultural investments
were directed towards physical assets like farm
equipment.13
► Despite lofty claims of “Sabka Saath, Sabka Vikas,” only
21% of agricultural households have health insurance, a
mere 25% have life insurance, and just 13% are covered
by accidental insurance.14
► During the UPA era, tractor sales, a key marker of rural ... steady
prosperity, grew at a robust 15.73% annually, peaking at movement
6,34,151 units in 2013-14. Under the NDA’s watch, sales of workers,
plummeted to 4,44,997 units in 2023-24 and further to
especially youth,
4,05,711 units in 2024-25.15 16
from agriculture
Diminishing options in urban India and the COVID-19 to higher-
pandemic drove millions back into the agriculture productivity ...
sector, only to face even lower-paying jobs with minimal reversed post-
prospects. 2019 due to the
From 2000 to 2019, there was a steady movement of workers, mishandling
especially youth, from agriculture to higher-productivity of the
non-farm sectors like construction and services. However, COVID-19
this reversed post-2019 due to the mishandling of the pandemic
COVID-19 pandemic.

12 [Link]
expenditure-survey-monthly-spend-of-farm-families-below-rural-
average-9180780/
13 The All India Rural Financial Inclusion Survey (NAFIS) 2021-22, NABARD,
2024 (Pg 60) [Link]
pub_0910240156351156.pdf
14 The All India Rural Financial Inclusion Survey (NAFIS) 2021-22, NABARD,
2024 (Pg 78) [Link]
pub_0910240156351156.pdf
15 [Link]
[Link]
16 [Link]
[Link]#:~:text=The%20consistent%20drop%20in%20 59
tractor,forward%20to%20the%20festive%20season.
 ► Agriculture absorbed 56 lakh workers in three years
since COVID-19, but its output did not grow as fast.
Large numbers of people are working in low-paying,
low productivity jobs, which have been characterised as
disguised unemployment.17
► Workers are being forced back to farming because better
jobs are unavailable. The share of India’s workforce in
agriculture rose from 42.5% in 2018–19 to 46.1% in 2023–
24.18 This movement of workers back to agriculture runs
counter to the worldwide pattern of movement of workers
from farm to factory and then services.
► Between 2023-24 manufacturing employment stagnated
at 11.4%. This is much lower than 12.8% in 2012.19
► With urban unemployment peaking at 9.3% during
COVID-19, many workers were forced to leave cities and
return to their rural roots.
► Between 2017-18 and 2022-23, data from the Periodic
Labour Force Survey indicate that women make up a
majority of new agricultural workers. There are concerns
that this has happened not by choice but because they
were pushed out of or otherwise denied access to urban
... by 2015, the
jobs as around half now work in unpaid jobs on their
government family-owned farms.20
had already
declared The crux of the issue lies in a series of failed policies
the promise and empty promises that have left farmers in the
“unfeasible,” lurch.
citing the The BJP’s 2014 election campaign promised a Minimum
potential Support Price (MSP) based on the Swaminathan Commission’s
distortion of recommendation—1.5 times the weighted average cost of
production. But by 2015, the government had already declared
markets.
the promise “unfeasible,” citing the potential distortion

17 [Link]
back-agriculture-in-3-yrs-is-it-a-good-sign-or-an-indicator-of-an-economic-
distress--95274
18 [Link]
to-farming#:~:text=Between%202020%20and%202021%2C%20India,42.5%25%20
in%202018%2D19.
19 [Link]
survey/3624259/
20 Ashwini Deshpande, “Illusory or real? Unpacking the recent increase in women’s
60 labour force participation in India,” Centre for Economic Data and Analysis,
Ashoka University, 15 December 2023.
of markets.21 Since then, farmers have watched helplessly as their
livelihoods were eroded by market forces, unaccountable middlemen,
and increasing input costs that have outpaced any minimal increase in
their earnings.
The 2020 farm laws were the NDA’s most egregious assault on farmers,
undermining their livelihoods through:
► Bypassing APMC markets, destroying price transparency.
► Favoring corporations in contract farming, leaving farmers
vulnerable.
► Diluting stockholding regulations, encouraging speculative
hoarding.
The tragic tale of Bihar’s deregulation of APMCs is a warning the
government chose to ignore. The state’s dismantling of APMCs in 2006
left farmers at the mercy of middlemen, with 41 markets shutting down
entirely and the rest in deplorable conditions.22 Yet, instead of learning
from this experience, the Modi regime continues to push privatisation
through its National Policy Framework on Agriculture Marketing
introduced in November 2024.23 This policy, which dismantles APMCs
and promotes corporate-controlled farming, has rightly been met with
a widespread backlash.
Farmers’ protests have re-emerged, and for good reason. Skyrocketing
costs of fertilisers, seeds, and fuel have decimated farm incomes. Ironically,
in the face of an uncaring Modi government, in December 2024, a
Parliamentary Standing Committee recommended legally binding MSP
and debt waivers for farmers.24

Government schemes meant to protect farmers have been riddled

with inefficiencies and corruption, ultimately benefiting private
insurers and middlemen more than the farmers they were supposed
to help.
Data furnished by the Parliamentary Committee on Agriculture noted
that there has been a steady decline in the share of the Department of
Agriculture and Farmers Welfare’s budget, in comparison with the overall
budget.

21 [Link]
22 [Link]
of-apmc-act-report
23 [Link]
agriculture-marketing
24 [Link]
implementation-of-legally-binding-msp-farm-loan-waiver
61
 % share of Department in total central plan
4

% share of department w.r.t.

total central plan 3

2021-22 2022-23 2023-24 2024-25

Year

Figure 8.4 Source: Parliamentary Committee Report on

Department of Agriculture and Farmers Welfare

Pradhan Mantri Kisan Samman Nidhi (PM KISAN): In 2023-

24, the Department of Agriculture and Farmers Welfare had an
excess expenditure of Rs. 1,440 crore. However, the budget for
2024-25 did not reflect any change in the allocation towards the
programme.25
► In March 2023, over 3 crore women were beneficiaries of
the PM KISAN scheme, but by February 2024, that number
plummeted to just under 2 crore, at a time when the
number of women in agriculture is increasing.26
► After peaking at over 11.2 crore beneficiaries in the 11th
instalment, the PM KISAN scheme saw a massive drop of 2
crore in the 12th instalment, and despite a slight recovery to
9.6 crore in the 14th instalment, it remains 1.6 crore short of
its peak.
► The PM KISAN scheme mainly benefits medium and large-
scale farmers, leaving out about 40% of tenant farmers.27

25 First Report on Demands for Grants (2024-25) of the Ministry of Agriculture and
Farmers Welfare (Department of Agriculture and Farmers Welfare), December
2024, Page 24
26 [Link]
but-exclusion-and-missed-income-goal-point-to-holes
62
27 [Link]
Pradhan Mantri Fasal Bima Yojana (PMFBY):
► The budget for PMFBY decreased by Rs 400 crore from the
revised estimates.
► The PMFBY benefits only 3.12 crore of the 14.57 crore farmers,
while an average of 9.4 crore farmers are left to face crop losses
without insurance cover. 28
► The private insurance sector benefits more than farmers under
PMFBY.29
► In 2023-24, the government paid 59% of its share of PMFBY
payment to private insurers.30

The NDA’s real failure isn’t just in its blatant neglect of farmers
and their concerns—it’s in the countless lives lost in the fight for
justice.
► Every hour, one farmer/farm labourer ends their life.
► Between 2014 and 2022, 1,00,474 farmer suicides were recorded.31

Farmer Suicides 2019-2022

Farmers Agricultural Labourers

7000

6000

5000

4000

3000

2000

1000

0
2019 2020 2021 2022

Figure 8.5 Source: NCRB Data 2019, 2020, 2021, 2022

28 [Link]
agri-problems-highlighted-by-economic-survey-experts-1811907
29 [Link]
30 First Report on Demands for Grants (2024-25) of the Ministry of Agriculture and Farmers
Welfare (Department of Agriculture and Farmers Welfare), December 2024, Page 24
31 [Link] 63
points-to-a-systemic-apathy
 9

CHAPTER
Inflation
The Modi government came to power a decade ago with promises
of “Achhe Din.” It has instead ushered in an era where inflation
is eating away the livelihoods of ordinary Indians, leaving them
struggling to cope with an increasingly unaffordable existence.
As prices have risen faster than incomes, poor households
have been forced to spend a larger portion of their budget
on food, leaving less for other essential needs like healthcare
and education.
► The cost of a home-cooked vegetarian meal increased by
10% in 2024.1
► In December 2024, Wholesale Price Inflation (WPI) rose to
2.37%, driven largely by food prices. The WPI Food Index
jumped to 195.9, up from 193.2 in just four months, while
year-on-year inflation in the Consumer Food Price Index
(CFPI) surged to 8.39% (provisional).2

Figure 9.1 Source: Ashoka CEDA

1 [Link]
tomato-onion-potato-broiler-chicken-prices-vegetarian-meal-
[Link]
2 [Link]
37-per-cent-in-december/
[Link]
inflation-at-four-month-low-food-prices-soften-124091700419_1.html
64
► The price of peas surged by a staggering 89.12%, of
potatoes by 68.23%, and of garlic by 58.17% in December
2024 compared to the previous year.3
► Even staple cooking essentials like coconut oil saw prices
rise by 45.41%. Cauliflower, once a common vegetable,
became a luxury at 39.42% inflation.4

Modi promised prosperity. But for India’s workers, it has

been a decade of despair. Wage stagnation and decline
have turned achhe din into a cruel joke.
► Under UPA II (2009-14), real rural wages surged: 8.6% (farm)
and 6% (non-farm).
► Under the Modi government, these growth rates dropped
to 3% and 3.3% in the first term, and further to -0.6% (farm)
and -1.4% (non-farm) during the second term.
► Between 2018-23, male construction wages barely rose
from Rs. 182.44 to Rs. 205.80, and females from Rs. 136.95
to Rs. 157.95. Real wage growth turned negative, falling up
to -3% during 2021-23.

Real Wage Growth

Real Non-Agricultural Real Agricultural
Wage Growth Wage Growth

UPA-2
(2009-14)

NDA-1
(2014-19)

NDA-2
(2019-24)

-2 0 2 4 6 8 10

Figure 9.2 Source: The Indian Express5

3 [Link]
4 [Link]
5 [Link]
wages-are-in-decline-9120808/
65
 India, the world’s second-largest producer of fruits and
vegetables, paradoxically is now one of the hungriest
nations globally.6
► On the 2024 Global Hunger Index (GHI), India ranks
105th out of 125 countries. The index categorises India
as experiencing “serious” levels of hunger. More than
a third (35.5%) of Indian children are stunted which
affects their cognitive and physical productivity in the
future.7
► India’s Hunger Index performance is worse than
Bangladesh, Indonesia and Mongolia.

2024 GHI Scores in South, East, and Southeast Asiaa

40 South Asia = 26.2
World = 18.3
8.3
31.4
30.8
28.8

32
27.9
27.3
27.0

24
GHI Score

19.8
19.4
16.9
15.7
14.7
14.7
14.7
12.7
16 12.7
11.3
11.3
10.2
10.1
5.6
8

<5
0
Thailand
Mongolia
Papua New Guinea

China
Nepal
Bangladesh

Cambodia

Sri Lanka
Viet Nam
Indonesia
India

Myanmar

Philippines
DPR Korea

Pakistan

Timor-Leste

Malaysia
Afghanistan

Lao PDR

Fiji
Solomon Islands

Figure 9.3 Source: Global Hunger Index8

6 [Link]
en/#:~:text=India%20is%20the%20world’s%20largest,%2C%20
vegetables%2C%20fruit%20and%20cotton.
7 [Link]
9.9,given%20year%20or%20reference%20period.
8 [Link]
9.9,given%20year%20or%20reference%20period.

66
Inflation could have been tackled and households
provided with additional spending capacity if taxes on
petroleum products had been cut. However, even when
global crude oil prices fell, domestic prices remained
stubbornly high, due to the government’s aggressive
taxation policies.
In May 2012, Narendra Modi, the then Chief Minister of
Gujarat tweeted, “Massive hike in #petrol prices is a prime ... the
example of the failure of Congress-led UPA. This will put a government ...
burden of hundreds of crores on Guj.”9 The price of petrol at maintained
the time was Rs. 73.18, diesel was Rs. 40.91.10 In January 2025,
high fuel
during the third term of the Modi government, petrol prices
taxes despite
have increased to Rs. 94.77, diesel is Rs. 87.67.11
plummeting
The Modi government has often tried to lay the burden of
global crude
fuel price rise on global crises. But one cannot forget that
oil prices as
the government failed to pass on the oil bonanza gained
has been its
from cheaper Russian oil imports during the Russia-Ukraine
conflict to the people. Instead, it maintained high fuel taxes pattern ever
despite plummeting global crude oil prices as has been its since 2014...
pattern ever since 2014.12
Since taking power in 2014, the BJP government has
repeatedly raised excise duties on petrol and diesel,
placing a heavy burden on the common man.
► Excise duty on petrol was increased by 109.92% (from
Rs. 9.48/litre to Rs. 19.90/litre), and on diesel by a
staggering 343.82% (from Rs. 3.56/litre to Rs. 15.80/
litre).13 These hikes have directly impacted household
budgets, particularly for the poor and middle class,
whose transportation and food costs have soared.
Farmers have also been hit.
► Despite India importing 87.7% of its crude oil in FY24,
the government has done little to reduce reliance on
fossil fuels.14

9 [Link]
10 [Link]
lpg/rsp-of-petrol-and-diesel-at-delhi-up-to-15-6-2017
11 [Link]
12 [Link]
exploitative-fuel-price-policy
13 [Link]
petroleum-sector-set-to-drop-rapidly-in-fy-2024-25-124120800413_1.html
14 [Link] 67
petroleum-sector-set-to-drop-rapidly-in-fy-2024-25-124120800413_1.html
 ► The BJP’s policy of hiking excise duties on fuel has resulted in a
massive 176% increase in its revenue from Rs 99,000 crore in 2014-15
to Rs 2.73 lakh crore in 2023-24.15
The Modi government’s sudden reductions in LPG prices before
elections expose its cynical manipulation of policy for electoral gains.
► In August 2023, prices of LPG cylinders were cut by Rs. 200 ahead
of assembly elections. In March 2024, another Rs. 100 cut was
announced, along with an extension of the Ujjwala subsidy for a
year. These pre-election price cuts are superficial fixes to deeper
issues caused by the government’s own decision to abolish the LPG
subsidy.
► For most of Modi’s tenure, LPG prices have been unaffordable,
crossing Rs. 1,100 in many states, burdening rural households the
most.
► While the government parades its Ujjwala scheme as a success, the
reality on the ground is starkly different. High LPG costs prevent
widespread adoption of LPG among rural families, with 41% of
Indians still relying on fuels like wood and cow dung.
The Pradhan Mantri Ujjwala Yojana (PMUY), Modi government’s
flagship scheme is riddled with inefficiencies.
► Of the 9 crore registered beneficiaries, an average of 2.32 crore people
per year between 2017 and 2022 took either no refill or just one refill.
► In 2023-24, over 1 crore households did not take any refill, and 1.6
crore took only one refill.
► Nearly 25% of beneficiaries do not consistently use LPG.

Number of PMUY Number of PMUY

Number of PMUY
Financial Customers out of Customers out of
Customers as on
Year (A), who have not (A), who have taken
closing of FY (A)
taken any refill only one refill

2021-22 7,99,03,131 91,74,648 1,08,13,246

2022-23 9,58,59,418 1,18,84,259 1,54,74,040

2023-24 10,32,66,007 1,40,48,192 1,66,52,314

Figure 9.4 LPG Cylinder refills under PM Ujjwala from 2021 – 2024
Source: Indian Oil Corporation Limited (IOCL)

68
15 [Link]
For decades, fixed deposits (FDs) were a lifeline for India’s
retirees, promising stability and assured returns. Today,
inflation is steadily eroding this foundation, leaving ... With inflation
senior citizens financially vulnerable. steadily eroding
► A senior citizen investing Rs. 1 crore in an FD at 6% purchasing
annual interest might feel reassured by nominal power, Rs. 1000
returns. Yet, with an inflation rate at 5%, the real growth per month
is minimal. is woefully
► While nominal FD rates hover around 6-7%, inflation insufficient
rates erode real gains significantly. to meet even
► Despite being touted as a robust retirement savings basic needs...
option, less than 10% of employees opt to invest in the
National Pension System (NPS).
► The minimum monthly pension of Rs. 1,000, set in
2014, has remained unchanged for nearly a decade.
With inflation steadily eroding purchasing power, this
amount is woefully insufficient to meet even basic
needs.
The Modi government’s economic policies have overseen
the rupee depreciating to historic lows, making it a
symbol of India’s economic vulnerabilities16
► At Rs. 86.62 per dollar, the rupee’s depreciation has
triggered inflationary shocks that hurt ordinary citizens
while failing to deliver the supposed export benefits.
► Exporters face increased costs for imported raw
materials, shipping, and insurance—all denominated
in dollars—neutralising gains from the weaker rupee.
► India’s dependence on imports (85% for crude oil)
ensures that a weaker rupee directly impacts fuel
prices, which, in turn, drives up costs across the board—
from transportation to essential goods.
As the rupee crumbles against the US dollar, gold prices
soar17
► Historically, gold prices tend to rise in anticipation
of inflation, especially during periods of economic
uncertainty.

16 [Link]
rupee-depreciation-yields-limited-benefits-for-exporters-experts/
articleshow/[Link]?from=mdr
17 [Link] 69
fifth-straight-session-silver-remains-flat/cid/2077275
 ► Gold prices have surged to Rs. 80,660 per 10 gms. With
inflation fears exacerbated by skyrocketing crude oil prices
and geopolitical tensions and diminished confidence in the
government’s management of the economy, the public is
again turning to costly gold as a hedge.

Figure 9.5 US Dollar to Indian Rupee Exchange Rate

Chart 2015 to 202518

70
18 [Link]
Crony Capitalism
10

CHAPTER
In 2014, Narendra Modi swept to power on a wave of
promises—economic rejuvenation, job creation, and
development for all. “Achhe Din” (Good Days), he called it.
A decade later, the sheen of those promises has dulled,
overshadowed by the rise of a system that rewards the
privileged few while the vast majority struggles to make
ends meet. Under Prime Minister Modi, India’s economy
has become a playground for crony capitalism, where ... India’s
wealth is cornered by a select elite, inequalities deepen, and economy has
the dreams of crores of Indians are sacrificed at the altar of become a
corporate favouritism. playground
India’s billionaires have seen their wealth soar for crony
during PM Modi’s tenure. capitalism,
► In 2024, the number of billionaires in India increased to where wealth
200. Their wealth increased 41% from 2023 to almost is cornered by
touch $1 trillion.1 a select elite,
► An Oxfam India report estimated that the top 1% in inequalities
India owned more than 40% of the total wealth in 2021.2 deepen, and
► Wealth creation is good for the economy, but it is the dreams
important to examine how it is being created and also of crores of
to ameliorate worsening inequalities. Indians are
Public Sector Banks (PSBs) have played a pivotal sacrificed
role in financing these corporate expansions, often at the altar
at great risk. of corporate
► As of March 2023, the top 50 wilful defaulters owed Rs.
favouritism
87,000 crore, including prominent names like Mehul
Choksi and Rishi Agarwal, yet little tangible action has
been taken to recover these dues.3
► Over the past five years, banks have written off a
staggering Rs. 9.90 lakh crore, with Rs. 1.70 lakh crore
written off in FY24 alone.4

1 [Link]
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html
2 [Link]
india-story
3 [Link] 71
4 [Link]
 ► In FY24, Punjab National Bank registered the highest
write-offs, followed by the State Bank of India (SBI).5
► Between 2014 and 2024 the State Bank of India has written
off the highest total amount, at Rs 2,97,196 crores.6
► As of March 2024, gross NPAs across 64 banks was at Rs. 4.81
lakh crore.7 Amount recovered by Scheduled Commercial
Banks on written-off loans was at a three-year low.8

THE ADANI GROUP

One of the primary beneficiaries of the Narendra Modi
government is Gautam Adani. The Adani Group, until
2014, was primarily known for its ventures in ports,
logistics, and energy. However, after PM Modi came
to power, Adani witnessed a dramatic expansion of
his business empire into sectors far removed from its
traditional domains, facilitated by favourable policies
and government interventions.
Under the Modi government’, the Adani group expanded
aggressively into unrelated sectors such as airports, sewage
treatment, data centers, gas distribution, real estate, and
defense.
When Modi was Chief Minister of Gujarat, over 5,500 hectares
of land were handed over to the Adani group to expand the
Mundra Special Economic Zone on highly favorable terms. This
pattern continued nationally under his prime ministership,
with state-owned enterprises like Indian Oil and GAIL investing
heavily in Adani group projects, even as the Adani group’s debt
soared to Rs. 1.1 lakh crore by 2017. 9
In late 2018, the Modi government awarded 25 out of 126 gas
distribution contracts to the Adani Group, making it the largest
beneficiary of these contracts despite the lack of adequate gas
pipelines in the regions where it had bid.

5 [Link]
6 [Link]
makes-a-mockery-of-public-money-banking-system?_gl=1*1f2ov52*_
ga*MjM2ODA2MTU4LjE2ODY5MTYzNDY.
7 [Link]
write-offs-in-fy24-9690018/
8 [Link]
write-offs-in-fy24-9690018/

72 9 [Link]
adani-group-convenient-relations-government-enterprises
 Companies with the most winning bids
First 8 rounds of tenders 9th and 10th rounds of
between 2009-2017 tenders in 2018

IOC Adani 22

Adani Gas 16
Companies with the most winning bids

Gujarat Gas 16

IOC 16

Torrent Gas 15

GAIL 14

BGRL 13

AG&P 12

HPCL 10

IGL 6

IRM 6

0 5 10 15 20 25
Tenders won

Figure 10.1 Source: Scroll10

The Modi government awarded more contracts to Adani in two

months (63), than it won during the UPA’s tenure (35).11
Between 2014 and 2018, the Adani Group embarked on a spree
of acquisitions. They acquired:12
► Reliance Power’s electricity transmission business in Mumbai
for Rs, 12,300 crore.
► GMR’s Chhattisgarh thermal power project for Rs. 5,200 crore.
► Larsen & Toubro’s Katupalli port near Chennai for Rs. 1,950 crore.
► Other acquisitions included Lanco’s Udupi thermal power
project, Tata’s Dhamra Port in Odisha, and Coastal Energen’s
power project in Tamil Nadu.

10 [Link]
expanded-across-india
11 [Link]
expanded-across-india
12 [Link] 73
expanded-across-india
 The Adani Group soared into India’s airport business in 2019,
securing control over key hubs with no prior experience.13 14
► Adani Group won the mandate to modernise and operate six major
airports: Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati,
and Thiruvananthapuram. These airports were selected because
they were among the highest revenue-generating and profitable
airports operated by the Airports Authority of India (AAI). The
Adani Group outbid eight other large corporations.
► In August 2020, Adani acquired a 74% stake in Mumbai
International Airport, with the Modi government’s approval and
support, including by changing the rules that required prior
airport management experience. This further cemented Adani’s
dominance in airport infrastructure despite concerns over the
group’s capacity to manage such assets.
PM Modi accommodated these transactions despite opposition
from the Department of Economic Affairs (DEA) and NITI Aayog.15
► The DEA cautioned that no more than two airports should be
awarded to the same bidder, citing the high financial risk and
performance issues. The DEA emphasised that awarding airports
to multiple companies would promote competition and mitigate
risks.
► On the same day, a note from Niti Aayog warned against
Adani’s inexperience to handle the sector, “A bidder lacking
sufficient technical capacity can well jeopardise the project
and compromise the quality of services that the government is
committed to provide.”
► Kerala’s government challenged the Thiruvananthapuram
airport deal, citing procedural violations and the state’s rejection
despite a competitive bid. But this was dismissed by the Modi
administration.
Employees and Travellers are Paying the Price of this Monopoly
► At the Thiruvananthapuram airport, Adani increased User
Development Fees (UDF) by 50% in July 2024, pushing costs for
domestic passengers from Rs. 506 to Rs. 770.16

13 [Link]
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14 [Link]
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15 [Link]
[Link]

74 16 [Link]
thiruvananthapuram-airport-up-50-from-july-1/[Link]
► Landing charges at Thiruvananthapuram have tripled, and similar
hikes at Lucknow are set to drive up airline operating costs, inevitably
leading to higher ticket prices.17
► In October 2024, over 300 employees of the Adani-controlled
Thiruvananthapuram International Airport opted to transfer to other
airports.18

Public financial institutions, designed to safeguard the interests

of Indian taxpayers, have become instrumental in financing
Adani’s ambitions.
► Public sector units such as the Life Insurance Corporation of India
(LIC) and SBI have invested heavily in Adani Group’s companies. An
Economic Times report alleged that as of November 2024 the Adani
Group’s total debt was Rs 2.4 lakh crore. Of this, domestic banks,
including SBI and Punjab National Bank, hold 36% of the debt
totalling of Rs. 88,100 crore.19
► Public sector banks suffered a 74% haircut on outstanding loans,
settling for Rs. 16,000 crore out of Rs. 62,000 crore, after financially
stressed companies were acquired by the Adani Group.20
► Under the Modi government, SBI signed a MOU in 2014 to provide
a staggering Rs. 6,200 crore ($1 billion) loan for Adani’s controversial
Queensland coal project in Australia, even as global financial giants
like Deutsche Bank, HSBC, and Citigroup, alongside Australian
banks and the Queensland government, refused to back it due to
environmental concerns and financial risks. Despite Adani repeatedly
missing funding deadlines and the project facing significant
opposition, the Modi government ensured that India’s largest public
bank extended preferential treatment.21
As India’s largest institutional investor, LIC pumped a staggering Rs.
81,268 crore into Adani stocks, even when global scrutiny questioned the
group’s financial practices.22

17 [Link]
[Link]
18 [Link]
controlled-thiruvananthapuram-intl-airport-opt-for-transfer-to-aai-managed-ports
19 [Link]
theres-enough-cash-to-cover-30-months-of-debt-payments/articleshow/115558007.
cms?from=mdr
20 [Link]
haircut-on-loans-from-public-sector-banks-cong
21 [Link]
convenient-relations-government-enterprises
22 [Link] 75
adani-group-stocks-crash-full-details-367838-2023-01-27
 Following the Hindenburg report alleging fraud and stock
manipulation in January 2023, the value of LIC’s investments
plummeted significantly.

Figure 10.2 Source: Indian Express23

LIC’s preferential treatment towards Adani is further evident in its

continued investment in seven Adani group companies despite
persistent market shocks, including a sharp Rs. 8,700 crore loss in
a single trading session after U.S. prosecutors indicted Adani for a
$ 250 million bribery scandal.

India’s Foreign Policy or Adani’s Business

Expansion Plan?24 25
India’s diplomatic priorities appear increasingly intertwined with
the business interests of the Adani Group. From Africa to South
Asia, the expansion of Adani’s infrastructure empire seems to
follow a clear pattern: key diplomatic engagements by Prime
Minister Narendra Modi followed by major Adani deals.

23 [Link]
years-steadily-increases-holding-in-its-group-companies-8301341/
24 [Link]
india_s_expense
76
25 [Link]
 From Modi meeting to Adani milestone

Time taken, in months

1
Singapore
1
Vietnam
1
Malaysia
2
Bangladesh
4
Sri Lanka
6
Kenya
7
Tanzania
12
Israel
Created with Datawrapper

Figure 10.3 Time Taken in Months between Modi’s Meeting with a Country’s
Authorities and Adani sealing a deal in the country. Source: Scroll26

Sri-Lanka
► In 2019, PM Modi’s diplomatic push to counter China’s
influence in Sri Lanka culminated in Adani securing a stake
in the East Container Terminal (ECT) project. However, the
deal was cancelled in early 2021 amid strong local opposition,
with Modi’s influence increasingly scrutinised due to rising
protests and accusations of backdoor deals.
► By 2021-2024, PM Modi’s support for Adani continued through
a controversial $440 million wind-power project. Sri Lanka’s
opposition accused Modi of pressuring President Rajapaksa.
The new government under President Dissanayake
reconsidered the deal, due to growing anti-Adani sentiment
which has also led to a backlash against India.

Kenya
► Within three months of Kenyan President Ruto’s visit to India
in December 2023, Adani submitted a $1.85 billion bid to
modernise Jomo Kenyatta International Airport. Allegations
emerged of preferential treatment, with whistleblowers
alleging that the deal involved corruption, tax evasion, and
inflated costs.

77
26 [Link]
 ► Adani’s ventures in Kenya, including a $736 million transmission
line project (2024), faced legal challenges for violating
constitutional processes. Additionally, Adani’s health project
inflated costs by $414 million, burdening taxpayers, amid
growing allegations of secrecy and cronyism linked to PM Modi’s
diplomatic involvement.

Bangladesh
► During PM Modi’s 2015 visit to Bangladesh, the Adani Group
secured a MoU to set up a 1600 MW coal-fired power plant in
Godda. By 2021, the plant was operational, but Bangladesh faced
exorbitant rates, paying five times the local electricity price and
legal and financial concerns arising with regard to the contract.
► In 2024, as anti-India protests erupted, Bangladesh’s interim
government demanded a revision of the contract. In response,
the Modi government amended cross-border electricity export
guidelines, prioritising Adani’s interests, amid increasing
opposition to the terms of the deal.

Tanzania
► Following PM Modi’s 2016 visit, Adani signed an MoU for strategic
investments in Tanzania, including the Bagamoyo port project.
PM Modi’s engagement helped solidify Adani’s $1 billion port
project and $900 million power project in 2022-2024.
► In May 2024, Adani secured a 30-year concession for Dar es
Salaam port, despite limited local consultation. The controversial
deal, along with other energy ventures, raised questions over
transparency and the potential burden on Tanzanian resources.

Figure 10.4 Source: Scroll27

78
27 [Link]
Myanmar
... Despite
► Despite Myanmar’s 2021 military coup and international
Myanmar’s 2021
sanctions on the new regime, PM Modi maintained
military coup
ties, facilitating Adani’s continued operations. The
group invested $127 million in port projects, while
and international
facing allegations of complicity with the military junta, sanctions on
including a controversial $30 million payment to the new regime,
Myanmar Economic Corporation (MEC). PM Modi
► Following growing international condemnation, Adani maintained
began its exit from Myanmar in 2021, selling its assets ties,
for just $30 million in 2023. facilitating
Adani’s
Under Prime Minister Modi’s leadership, the defence continued
sector has increasingly become a playground for operations
his close allies, most notably Gautam Adani, whose
ventures have been strategically integrated into
India’s military infrastructure.28 29
► Since PM Modi’s visit to Israel in 2017, Adani has secured
high-profile defence contracts, ranging from drones
and electronics to small arms and aircraft maintenance.
This concentration of defence manufacturing power
in a single, often controversial, conglomerate, given
Adani’s alleged ties to offshore shell companies is a
serious national security concern. The involvement
... despite
of such a questionable player in critical sectors
jeopardises the transparency and accountability of India’s robust
defence procurements capabilities
► The Modi government’s facilitation of Adani’s growing
in drone
monopoly in defence manufacturing comes at the development,
cost of sidelining both established public-sector the government
players and Indian start-ups. For example, despite allowed Adani
India’s robust capabilities in drone development, the to form a joint
government allowed Adani to form a joint venture with venture with
Israeli firm Elbit, despite the conglomerate’s lack of Israeli firm Elbit,
prior experience in the sector. despite the
► With Adani now controlling key aspects of India’s conglomerate’s
defence manufacturing, the broader implications lack of prior
include a consolidation of power that undermines experience in the
market dynamics and risks putting the interests of our sector
armed forces secondary to corporate gains.

28 Hum Adani Ke Hai Kaun’ (HAHK) series, Indian National Congress 79

29 [Link]
 ANIL AMBANI
Anil Ambani has also reaped immense benefits under the
Modi government.3031
On 3 October 2016, Anil Ambani’s Reliance Group formed a joint
venture with Dassault Aviation, just 10 days after India and France
signed the Rafale deal for 36 fighter jets worth €7.87 billion. Defence
procurement guidelines require foreign vendors to reinvest in India
as a way to “offset” part of the defence expenditure, and to transfer
technology to enable Indian companies to gain expertise and
eventually move toward indigenous production. Even though it had
no previous expertise in defence production or the aircraft sector, the
Modi government facilitated Reliance’s involvement and ensured that
Reliance secured offset contracts worth Rs 21,000 crore by June 2017.
To facilitate Reliance’s inclusion, the Modi government amended
the Defence Procurement Procedure (DPP-2013) in August 2015,
removing the obligation for vendors to identify Indian offset partners.
This allowed Dassault to enter into an agreement with Reliance,
bypassing the earlier requirement to partner with Hindustan
Aeronautics Limited (HAL).
Despite claims of government ignorance, French media and President
François Hollande’s statements revealed that the Indian side insisted
on Reliance as the offset partner from the beginning of the Rafale
negotiations in 2015.
In February 2020, Anil Ambani, once the world’s sixth richest man,
declared bankruptcy in a UK court. Now banned by SEBI for five years
over fund diversion allegations and with an Rs. 8,000-crore arbitral
award against his subsidiary overturned by the Supreme Court,
Ambani’s fall from grace exposes glaring failures in PM Modi’s choice
of industrialists for critical national defense projects.32 Clearly, instead
of PM Modi using his foreign trips to advance India’s foreign policy
interests, he appears to use them as business development trips for
select crony capitalists. Earlier, many of them used to accompany the
PM on his trips visibly but now operate behind the scenes.

30 [Link]
Globetrotting-Adani-Ambani
31 [Link]
amendments-obscure-reliance-role
32 [Link]
80 how-worlds-6th-richest-man-became-bankrupt-and-banned-in-just-over-a-decade/
articleshow/[Link]?from=mdr
 Figure 10.5 Source: The Caravan

Figure 10.6 Source: Sabrang India33

81
33 [Link]
ambani/
 BJP’s Attacks on 11

CHAPTER
Institutions
A key foundation enabling India’s growth has been the strength of
institutions. These have long served as pillars of economic governance,
ensuring transparency, stability, and accountability. However, over the
past decade, the Modi government has systematically undermined
the autonomy and effectiveness of a range of institutions in a manner
that continues to affect investor confidence negatively.

The Insolvency and Bankruptcy Code:

A Mismanaged Reform
The Insolvency and Bankruptcy Code (IBC), introduced in 2016,
aimed to resolve corporate distress effectively and bolster creditor
confidence. However, its implementation under the BJP regime has
raised serious concerns about its efficacy and fairness.
High Haircuts for Creditors: Creditors have faced severe losses due to
the IBC’s resolution framework. The realisable value as a percentage
of claims has steadily decreased, from 55.14% in 2018-19 to a mere
34.14% in 2022-23. Only 25-30% of cases admitted under the IBC had
been successfully resolved as of February 2024.1

Creditors' Haircuts in Bankruptcy Cases

Realisable Amount as % of Claims Admitted in FY

2017-18 49.68

2018-19 55.14

2019-20 49.37

2020-21 45.3

2021-22 32.89

2022-23 34.14

0 10 20 30 40 50 60

Figure 11.1 Source: IBBI Annual Reports Created with Datawrapper

82
1 [Link]
A significant number of insolvency cases end up in
liquidation rather than resolution. This path typically yields ... Creditors have
far lower recoveries, with average realisations as low as faced severe
5-10% of admitted claims in liquidation cases.2 losses due to the
Delays and Inefficiencies IBC’s resolution
framework. The
Despite its mandate for a 180-day resolution period, many
cases have exceeded this limit. Litigation, lack of bidder
realisable value
interest, and procedural bottlenecks contribute to delays. as a percentage
Insolvency and Bankruptcy Board of India (IBBI) data of claims has
revealed that 31% of corporate insolvency processes ended steadily
in liquidation, compared to the 10% that yielded resolution decreased,
as of 2023, with asset values significantly eroding during from 55.14%
the process.3 in 2018-19 to a
Concerns of Crony Capitalism mere 34.14%
in 2022-23
Allegations of crony capitalism have surfaced, as distressed
assets are often acquired by influential players at heavily
undervalued rates.
For example, in the case of Alok Industries, the company
had an outstanding debt of around Rs. 30,000 crore. The
resolution plan approved under the IBC allowed Reliance
Industries and JM Financial to acquire Alok Industries for
Rs. 5,050 crore, leading to a recovery rate of approximately
17% for the creditors.4 Similarly, Ruchi Soya Industries, which
had an outstanding debt of around Rs. 12,000 crore, was
acquired by Patanjali Ayurved for Rs. 4,350 crore, resulting
in a recovery rate of only 36%.5
These examples highlight how the resolution process
has enabled major corporate players to acquire valuable
assets at a fraction of their worth, often leaving creditors
with significant losses. Critics, including opposition leaders,
have argued that the IBC has become a tool for “organised
loot,” with valuable companies being sold at significantly
undervalued rates.

2 [Link]
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3 [Link]
pdf
4 [Link]
approval-for-alok-industries/articleshow/[Link]
5 [Link] 83
4300-crore-fpo/[Link]
 Undermining the Reserve Bank of India’s Autonomy
The Reserve Bank of India (RBI), India’s central bank, has faced
unprecedented challenges under the Modi government. Key decisions
and appointments have raised concerns about its independence and
operational integrity.

Appointments of Bureaucrats as Governors:

For the first time in RBI’s history, two successive governors — Shaktikanta
Das and Sanjay Malhotra—were appointed from the ranks of the
Indian Administrative Service. Critics argue that these appointments
compromise the RBI’s autonomy, as career bureaucrats may prioritise
government directives over institutional independence. Shaktikanta
Das’s tenure saw significant policy alignments with the government,
including record surplus transfers to the government which enable it
to meet fiscal demands.6

Demonetisation Decision:
The 2016 demonetisation initiative was implemented against the advice
of RBI officials. Limited consultation and rushed execution caused
widespread economic disruption, including a drop in GDP growth from
which the economy is yet to recover. Former RBI Governor Raghuram
Rajan later revealed that the central bank had advised against the
measure, highlighting how the decision undermined RBI’s expertise. 7
Section 7 of the RBI Act: In 2018, the government invoked Section 7
of the RBI Act for the first time, allowing it to direct the central bank on
specific matters. This step, taken amidst disagreements over surplus
transfers and liquidity norms for Non-Banking Financial Corporations
(NBFCs), was widely criticised as a direct attack on RBI’s autonomy. The
invocation strained relationships between the government and RBI
leadership, culminating in Governor Urjit Patel’s resignation.8
Controversial Appointments: The inclusion of individuals with
questionable economic views and ideologically aligned to the RSS, such
as S. Gurumurthy, on the RBI’s board raised questions about political
interference. Gurumurthy’s advocacy for demonetisation and criticism
of RBI policies have led to concerns about the board’s impartiality.9

6 [Link]
for-three-year-term/[Link]
7 h tt p s : //w w w. b u s i n e s s to d a y. i n / i n d u s t r y/ b a n ks /s to r y/r b i - w a r n e d - g o v t - a b o u t -
demonetisation-hours-before-pm-modi-8-pm-announcement-179379-2019-03-11
8 [Link]
invoke-section-7-act-1934-history-and-amendment-1380387-2018-11-01

84 9 [Link]
reserve-bank-of-india-1897516
Excessive Reserve Transfers: The RBI approved a surplus
transfer of Rs. 2.11 lakh crore in 2024, more than double
what it transferred in 2023. Ahead of the 2019 elections, the
government allegedly sought to extract Rs. 3 lakh crore
from the RBI’s reserves.10 11
While this demand was resisted, the eventual transfer of Rs.
1.76 lakh crore, a record high at the time, sparked debates
over fiscal prudence and institutional independence. Such
demands risk undermining the central bank’s ability to
manage future financial crises.

RBI Dividend Payouts to Central

Government (in Rs. crore)
General Non
Election Years Election Years
250k
210,873.99

200k
175,991

150k

99,[Link]
10k 87,416.22

57,127.5
50k 30,307.45

2018-19 2019-20 2020-21 2021-22 2022-23 2023-24

Figure 11.2 Source: REL Annual Reports Created with Datawrapper

The Securities and Exchange Board of

India: A Weakened Regulator
SEBI, tasked with regulating India’s securities markets, has
faced criticism for perceived lapses in enforcement and
decision-making under the BJP government.

10 [Link]
2-11-lakh-crore-to-government-5721303
11 [Link]
when-rbi-rejected-modi-govts-bid-to-extract-rs-3-lakh-crore-ahead-of- 85
2019-polls-bkg/3234373/
 Inadequate Oversight
SEBI’s handling of the Adani-Hindenburg controversy in 2023-
24 revealed significant regulatory lapses. Despite allegations
of over-invoicing and insider trading flagged as early as 2014
by the Directorate of Revenue Intelligence (DRI), SEBI failed to
take timely and decisive action.12
The then SEBI Chairman U.K. Sinha, post-retirement, was
appointed as an Independent Director and Non-Executive
Chairperson of NDTV in March 2023, following the Adani
Group’s acquisition of the media company.13
The 2023 Hindenburg report brought these issues back into
focus, leading to a Supreme Court-mandated investigation
into allegations of stock manipulation and governance lapses.14
However, SEBI’s opacity and delays in disclosing findings have
further eroded public confidence in its independence.

Judicial Rebukes
The Securities Appellate Tribunal (SAT) has repeatedly criticised
SEBI for issuing “mechanical orders” without proper due
diligence. For example, in a case involving Infibeam Avenues
Ltd., SAT imposed penalties on SEBI for procedural lapses,
highlighting systemic inefficiencies.

Conflict of Interest
SEBI’s credibility has been questioned due to allegations of
political influence and conflicts of interest within its leadership,
particularly against its Chairperson, Madhabi Puri Buch.
Reports revealed that Buch had financial ties to offshore funds
associated with the Adani Group during her tenure in the private
sector. Furthermore, her consultancy firm allegedly continued
to receive significant revenue linked to these entities, raising
serious questions about her impartiality and adherence to
SEBI’s ethical code.1516

12 [Link]
group-since-2014-letter-shows
13 https: //[Link]/business/Industry/ndtv-appoints-former-sebi-
chairman-uk-sinha-welspun-india-ceo-dipali-goenka-as-independent-
directors/[Link]
14 [Link]
transfer-probe-if-proof-of-agency-bias-is-strong/[Link]
15 [Link]
funds-adani-hindenburg-9507832/

86 16 [Link]
potential-rules-violation-documents-show-2024-08-16
These allegations, coupled with SEBI’s lack of decisive action on
the Adani case, have fuelled concerns of regulatory capture and
a compromised leadership. Such instances directly contradict the
role of SEBI as an impartial market regulator and have shaken
investor trust.

Figure 11.3 Source: The Indian Express17

Structural Challenges
SEBI has struggled to address systemic risks in areas such as
SME IPOs, insider trading, and high-frequency trading. Weak
enforcement mechanisms have allowed market manipulation to
persist, with high-profile scams exposing regulatory gaps.

Wilful Defaulters and the NPA Crisis

India’s banking system, once celebrated for its resilience, is facing an
unprecedented crisis under the BJP government, with an alarming
rise in Non-Performing Assets (NPAs) and loans written off for wilful
defaulters. Far from ensuring accountability, the government’s
approach to handling bad debts has disproportionately burdened
ordinary citizens, while allowing large corporate defaulters to
evade responsibility.

17 [Link] 87
dhaval-buch-sebi-probe-hindenburg-report-9510556/
 The NPA Explosion
Between 2014 and 2023, NPAs in the Indian banking sector surged
dramatically. Public sector banks, which account for the bulk of these
bad loans, saw their NPAs reach Rs. 12 lakh crore by March 2023. This
sharp rise has been attributed to poor credit assessments, policy
missteps, and political interference in lending practices.18 19
Loan Write-Offs: A staggering Rs. 14.56 lakh crore worth of bad loans
were written off by Indian banks between 2014-15 and 2022-23.
This includes Rs. 2.09 lakh crore written off in 2022-23 alone, with a
significant portion attributed to large corporate defaulters.20 These
write-offs, presented as “technical adjustments,” effectively absolve
borrowers of repayment obligations while transferring the financial
burden to taxpayers.

Loans written-off by Scheduled Commercial

Banks (in Rs. 1000 crore)
Foreign Banks Private Sector Banks Public Sector Banks

3,023
2018-19 15,966
129,765

3,750
2019-20 21,199
134,189

1,948
2020-21 28,867
96,232

1,613
2021-22 9,037
58,875

1,138
2022-23 41,194
67,045

0 30000 60000 90000 120000 150000

Figure 11.4 Source (provisional data for FV 2022-03) Created with Datawrapper

18 [Link]
19 [Link]
accounts-of-wilful-defaulters-fraudsters
88
20 [Link]
The Role of Wilful Defaulters
Wilful defaulters, who borrow funds with no intention of ... By March
repaying, have been a major contributor to the crisis. By 2023, over
March 2023, over Rs. 2.5 lakh crore in loans attributed to wilful Rs. 2.5
defaulters were written off. Notable cases include Vijay Mallya, lakh crore
Nirav Modi, and Mehul Choksi, who collectively defrauded in loans
Indian banks of thousands of crores. Despite government attributed
claims of taking action, recovery efforts have been dismal, with
to wilful
only a fraction of the stolen amounts being reclaimed.21 22
defaulters
Impact on the Common Citizen were
The government has consistently used public funds to written off.
recapitalise banks and offset the losses caused by bad loans.
Between 2014 and 2021, taxpayers bore the brunt of Rs. 3.4 lakh
crore in bank recapitalisation. This practice disproportionately
affects ordinary Indians, whose hard-earned money is used to
cover the failures of a banking system compromised by political
and corporate collusion.

Failures in Accountability
The Modi government’s rhetoric of transparency and
accountability has been starkly undermined by its inability to
hold defaulters accountable. Reports reveal that several major
defaulters maintain close ties to influential political figures,
raising concerns about crony capitalism. Moreover, regulatory
bodies have been criticised for their lax approach, allowing
defaulters to restructure loans repeatedly without significant
penalties.23

Investigative Agencies and the Extortion

Racket called Electoral Bonds
In 2017, then Finance Minister Arun Jaitley introduced the
Electoral Bonds (EB) scheme as a method through which
corporate and other entities could fund political parties through
anonymous donations. Since these bonds were to be purchased
solely from the State Bank of India (SBI), Jaitley claimed that this
measure would help clean up political financing and ensure

21 [Link]
22 [Link]
square-the-accounts-of-wilful-defaulters-fraudsters
23 https: //[Link]/article/business/wilful-defaults-rbi-top-100- 89
corporates-rs-1-96-lakh-crore-9738134
 “white money” contributions. In 2024, the Supreme Court
... since there ruled the EB scheme as unconstitutional and directed the
is information State Bank of India to make public the data on donors and
asymmetry recipients.
– only the
government When it was introduced itself, this scheme was criticised
can access as a regressive measure that fails the clean money,
information transparency, and fairness tests.24 It violates the citizen’s
about EB right to know who paid money to whom and what they
purchases and got in return. Routing funds through the banking system
donations, it is not a guarantee of “white money,” as banking processes
can be manipulated. Further, since there is information
can pressurise
asymmetry – only the government can access information
donors in about EB purchases and donations, it can pressurise donors
ways that in ways that distort the fairness of the electoral playing field.
distort the
Analysis of the data that emerged when the Supreme Court
fairness of forced SBI to provide detailed information on the Rs. 16,000
the electoral crores of donations between 2017 and 2024 yield some
playing field clear patterns. Various government agencies such as the
Income Tax department, the Enforcement Directorate and
the Central Bureau of Investigation conducted “raids” on
select corporate entities or individuals. These entities then
bought electoral bonds and donated them to the BJP.25
Thereafter, these cases were closed. This essentially turned
these government agencies into partners in an extortion
racket. Such misuse of agencies by the Modi government
has destroyed the credibility of these premier investigative
agencies.
Similarly, a pattern can be discerned where companies
donate EBs to the ruling party and then are awarded
lucrative contracts for infrastructure projects. EBs then
serve the function of evading transparency and hiding quid
pro quo corruption from the public. Overall, the bulk of EBs
were donated to the BJP. Thus, the EB scheme and the
misuse of supposedly independent investigative agencies
by the Modi government has deeply harmed the integrity
of electoral processes and Indian democracy itself.

24 https: //[Link]/talk-point/do-electoral-bonds-fit-into-the-larger-
framework-of-free-and-fair-elections/9105/

90 25 [Link]
corrupt-firms-paid-parties-got-cleansed
Suppression of
12

CHAPTER
Critical Data
The BJP government’s decade-plus tenure has been
marked by significant delays in the release of critical
datasets. Many of these datasets underpin essential policies
and programmes, leading to concerns whether policy
design and implementation have any relation to current
ground realities. Sectors as diverse as health, environment,
demography, agriculture, and criminal justice are affected
by the lack of or withholding of crucial data.
The following table shows key data sets that have not been
updated.

Data Set Sector Status

Census of India Demography Dated by 13 years
Economic Census Economy Dated by 10 years
Input Output Table Industry Dated by 15 years
National Industrial Classification
Industry Dated by 16 years
(NIC) codes
All India Survey on Higher Education
Education Dated by 3 years
(AISHE)
Annual Report on Status of
Environment Dated by 3 years
Implementation of SWM Rules 2016
Inventory on Biomedical Waste
Environment Dated by 3 years
Management
Criminal
Crime In India Report Dated by 3 years
Justice
Accidental Deaths & Suicides in India Criminal
Dated by 3 years
(ADSI) Justice
Road accidents In India Road safety Dated by 3 years
Criminal
Prison Statistics Dated by 3 years
Justice
Domestic Tourism Expenditure,
Tourism Dated by 10 years
72 round 91
 Data Set Sector Status
Sample Registration System (SRS)-
Health Dated by 6 years
Cause of Death in India
Sample Registration System (SRS)-
Health Dated by 5 years
Special Bulletin on Maternal Mortality
Report on Vital Statistics of India
Based on the Civil Registration Health Dated by 5 years
System
Medical Certification of Cause of
Health Dated by 5 years
Death
Health Management Information
Health Dated by 3 years
System Annual Report
Sample Registration System (SRS)-
Health Dated by 5 years
Statistical Report
Sample Registration System (SRS)-
Health Dated by 4 years
Bulletin

Figure 12.1 Source: India Spend1 and MoSPI

Census of India (Decennial) Delayed Indefinitely

The 2021 Census, a foundational dataset which captures population
figures, migration trends, literacy rates, and much more, has been
delayed for much longer than necessary. Originally postponed due to
the COVID-19 pandemic, the government only recently announced that
it will finally be conducted only in 2025.2 Given that multiple elections
have been conducted after the pandemic ended, the Census could
also have been conducted much earlier. The absence of data from the
Census disrupts other data-dependent systems, including the National
Population Register, poverty estimates, and delimitation of electoral
constituencies. The delay further impacts district-level planning and
resource allocation, which need to be based on accurate and updated
demographic data.
Delayed and inconsistent data impede planning at both national and
district levels. For instance, poverty and employment estimates, reliant
on accurate population baselines, are now based on rough projections

1 [Link]
close-936492

92 2 [Link]
says-report/articleshow/[Link]?from=mdr
rather than actual figures. This disrupts efforts to address
inequalities and improve resource allocation in critical sectors ... Instead
like health and education. of viewing
Programmes such as the Public Distribution System (PDS) unfavourable
and the National Food Security Act (NFSA) rely on accurate, data as a
up-to-date data for their implementation. Without a current wakeup call
Census, these programmes use outdated 2011 figures and to improve
thereby millions of poor, deserving beneficiaries get excluded
policies and
from essential services such as food security. Outdated poverty
programmes,
estimates similarly undermine targeted interventions aimed
the BJP
at alleviating rural and urban distress.3
government
Leveraging Data to Suit Political Narrative has
Instead of viewing unfavourable data as a wakeup call to repeatedly
improve policies and programmes, the BJP government has altered or
repeatedly altered or suppressed data to present a more suppressed
favourable narrative of its governance: data to
► Shortly after assuming power, the Modi government present
adopted the 2011-12 GDP series but did not release a back a more
series, as is the norm. In 2018, a back series was released. favourable
This estimated GDP growth rate in 2006-07 as 10.8%. narrative
Unable to digest the fact that the growth rate under the of its
previous UPA government had been in double digits, the governance
government decided to dismiss the report.4 Eventually, a
new series was commissioned that revised downwards the
GDP growth rates recorded during the UPA government’s
tenure, making the BJP’s economic performance appear
comparatively stronger. Experts argued this change was
politically motivated and was designed to bolster the BJP’s
economic narrative at the expense of historical accuracy.5
► The government withheld the Periodic Labour
Force Survey 2017-18 (PLFS) report, which revealed
unemployment at a 45-year high. This data, crucial for
understanding labour market trends, was only released
after the conclusion of the 2019 general elections.6

3 [Link]
data-will-fail-him/1724092/
4 [Link]
reuploaded-1320506-2018-08-22
5 [Link]
regime-was-actually-slower-than-recorded
6 [Link] 93
employment-data-gdp-imf
 ► The methodology for calculating highway length was
altered to give the impression of greater progress.
Instead of calculating the overall length of each road
constructed, as was the practice, the government
now reports the length of each new lane constructed.
This inflates the figures to suggest greater progress
in infrastructure development than has actually
occurred.7
► The 2017-18 Consumer Expenditure Survey (CES) was
withheld citing data quality issues, because it indicated
declining consumption levels for the first time since
1973. This revelation would have undermined claims of
economic growth and development.8
The CES, which provides critical insights into household
spending and poverty levels, was withheld in 2017-18,
reportedly due to “data quality issues.” This has been the
standard Modi government response to data that shows its
performance in bad light. Observers and experts suggest
that such delays and efforts at data suppression are
politically motivated, aimed at avoiding inconvenient truths
that could harm the government’s image.9
... Transparency
The government later released the 2022-23 survey, but
advocates
methodological changes rendered it incomparable with
argue that the
previous datasets, further complicating long-term analyses.
government
The methodological overhaul also created confusion among
has policymakers and researchers, limiting the utility of the data
centralised for effective decision-making. Ultimately, the government’s
control own decision making will be affected by its inability to work
over data with data that is comparable over time.
dissemination, Transparency advocates argue that the government has
reducing centralised control over data dissemination, reducing
institutional institutional independence. This allows for the selective
independence release of information that aligns with its political agenda
while suppressing potentially damaging datasets. The
suppression of datasets such as the Periodic Labour Force

7 [Link]
measure-length-of-highways-from-april-1/story-Q44qGgFzl4DsAPv5OIG0YI.
html
8 [Link]
spend-sees-first-fall-in-4-decades-on-weak-rural-demand-nso-
data-119111401975_1.html

94 9 [Link]
aversion-to-data-a-decade-of-missing-numbers-lme-57
Survey further demonstrates this trend, as the government
shifted to alternative methods like using data from ... India’s
Employees Provident Fund Organisation, which fail to reluctance to
capture informal sector employment comprehensively. engage with or
The suppression and delay of such critical data have wide- address global
ranging consequences for governance, public welfare, and indices such
democratic accountability. Instead of addressing underlying as the Global
issues, the government has altered data collection methods, Hunger Index
making long-term comparisons difficult. For instance, damages its
data collection practices were modified for the tracking
international
of anaemia, complicating decades of progress in tracking.
credibility.
This approach reflects an unwillingness to acknowledge
systemic challenges, and a focus on optics and political
Discrediting such
considerations.10 indices without
substantive
Undermining Global Indices counter-evidence
The BJP government has consistently questioned reflects
international indices such as the Global Hunger Index, poorly on
rushing to discredit their methodologies and to question the nation’s
their bona fides. India’s reluctance to engage with or commitment
address global indices such as the Global Hunger Index to
damages its international credibility. Discrediting such transparency
indices without substantive counter-evidence reflects
and the
poorly on the nation’s commitment to transparency and
integrity of
the integrity of governance.
governance.

10 [Link] 95
whitewash-global-indices
96
Acknowledgments
The Real State of the Economy Report 2025 is an examination
of the challenges facing the Indian economy. As the Union
government prepares to present the budget, it is important
to assess how the economy is actually performing without the
accompanying hype and propaganda.
The Indian National Congress, under the leadership of President
Mallikarjun Kharge and Leader of Opposition Rahul Gandhi, has
been regularly warning the government about how its uncaring,
counterproductive policies and cronyism are stifling economic
growth and leading India into a middle-income trap that will
deny India its historic demographic dividend.
Therefore, it is imperative to identify problem areas in order
to enable course correction. That is the rationale for this
comprehensive report prepared by the AICC Research
Department. I thank our team led by Akash Satyawali, Sneha
Elizabeth Koshy, Asmi Sharma, and Ishan Krishna for their
carefully curated research. Amitabh Dubey and Ravichandra
Tadigadapa provided valuable insights. I also thank AICC
General Secretary – Communications, Shri Jairam Ramesh and
Chairman, Media and Publicity, Shri Pawan Khera and his team
for their support.
This timely document aims to be a valuable resource to everyone
who is concerned about the future of India and is bearing the
brunt of the mismanaged economy. Feedback and inputs are
welcome.

Prof. M. V. Rajeev Gowda

Chairperson, AICC Research Department

97
98
 Real State of the Economy 2025

What happened to

growth?

AICC Research Department