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Resource centre on India's rural distress
 
 

India’s Manufacturing Growth Slowdown a Decadal Problem -Deepanshu Mohan

-TheWire.in

In India’s growth trajectory, for over a decade, domestic private investment levels have remained consistently low and so has (domestic) manufacturing growth. 

As per recent quarterly estimates, India’s growth rate slowed to 6.3% in the September quarter of 2022-23. There is evidence of a notable contraction in output of manufacturing that’s pulling down growth.

This author has previously argued that quarterly growth estimates may not reveal the real state of an economy. Quarterly estimates of GDP are rudimentary, preliminary-stage estimates computed from limited information.

Still, there is more to the estimates than projections. In India’s growth trajectory, for over a decade, domestic private investment levels have remained consistently low and so has (domestic) manufacturing growth.

There is a need to understand the endemic forces shaping these trends: consumption demand skewed towards the top 5% elite; a credit freeze in the financial system, choked by rising NPAs, poor-credit cycles now worsened by problems in implementing IBC; low, compressed wages in non-farm segments, high gender inequality in the workforce and poor export demand volume. These collectively shape India’s macro-structural fault lines.

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