Content

1. India’s economic churn, the nectar of growth
2. Giving wings to India’s youth

India’s economic churn, the nectar of growth

Civilisational Lens

• India has long believed trial precedes triumph (Samudra Manthan metaphor).
• History of renewal from crises:
  • 1991 crisis → Liberalisation reforms.
  • COVID-19 → Digital surge (UPI, DBT, digital adoption).
  • 2025 doubters’ narrative (“dead economy”) → GDP surge & resilience.

Relevance : GS 3(Indian Economy – Growth and Development , Economic Reforms)

Practice Question : India’s economic journey has often transformed crises into opportunities. Discuss how India’s post-1991 and post-COVID reforms shaped its current growth trajectory. (Answer in 250 words)

Latest Growth Data (Q1 FY 2025–26)

• Real GDP growth: 7.8% (five-quarter high).
• Nominal GDP growth: 8.8%.
• Broad-based GVA growth (7.6%):
  • Manufacturing: 7.7%.
  • Construction: 7.6%.
  • Services: ~9.3%.
• Drivers: Rising consumption, strong investment, logistics reforms, steady public capex.

Global Positioning

• World’s 4th largest economy, fastest-growing major economy.
• Outpacing US & China in growth rate.
• On trajectory to overtake Germany → 3rd largest economy (by end of decade).
• Global contribution:
  • Currently → 15% of incremental world growth.
  • PM’s target → 20%.

Market Confidence & Ratings

• S&P Global upgrade (2025) → India’s 1st sovereign rating upgrade in 18 years.
  • Reasons: robust growth, monetary stability, fiscal consolidation.
  • Impact: Lower borrowing costs, wider investor base.
• Punctures “dead economy” narrative → independent validation of resilience.

Inclusive Growth & Poverty Reduction

• 2013–14 to 2022–23: 24.82 crore people exited multidimensional poverty.
• Enablers:
  • Universal basic services → Jan Dhan accounts, Ujjwala (LPG), Ayushman Bharat, Har Ghar Jal.
  • Direct Benefit Transfers (DBT) → empower poor with choices.
• India’s model:
  • Built on democracy + federalism + consensus.
  • Slower to announce, but faster to implement & more durable.
  • Contrast: Authoritarian “sprints” vs. India’s “marathon” economy.

Energy Security as Growth Backbone

• India’s energy profile:
  • 3rd largest energy consumer.
  • 4th largest refiner (5.2 mbpd capacity).
  • 4th largest LNG importer.
• Roadmap:
  • Refining capacity → 400 MTPA by 2030.
  • Energy demand → will double by 2047, making up ¼ of global incremental demand.
• Exploration push:
  • Acreage ↑ from 8% (2021) → 16% (2025), target 1 mn sq. km (2030).
  • “No-Go” areas ↓ by 99%.
  • OALP (Open Acreage Licensing Policy) → transparent bidding.
  • Gas pricing reforms → incentives for deepwater/new wells.

Energy Transition

• Ethanol blending:
  • 1.5% (2014) → 20% (2025).
  • Savings: ₹1.25 lakh cr forex + ₹1 lakh cr paid to farmers.
• Compressed Biogas (CBG):
  • 300+ plants being rolled out.
  • Target: 5% blending mandate by 2028.
• Green Hydrogen: Oil PSUs investing in projects.
• Balanced stance: Energy security + energy transition.

Russia Oil Import Debate

• Fact check:
  • Russian crude not sanctioned like Iran/Venezuela; only price-capped.
  • India’s imports compliant with G-7/EU rules (shipping, insurance, audit).
  • India has always been 4th largest petroleum exporter (pre-Ukraine war).
• Role of India:
  • Stabilised markets → prevented $200/barrel oil shock.
  • Exports kept global supply chains running (even Europe sourced refined fuels from India).
• Domestic shield:
  • Oil PSUs absorbed losses (~₹10/litre diesel).
  • Tax cuts, export rules to protect domestic supply.
  • Ensured stable retail prices.

Industrial & Digital Revolution

• PLI Schemes + Gati Shakti → boost in semiconductors, electronics, defence, chemicals.
• Semiconductors:
  • 4 new fabs approved (2025).
  • PM’s visit to Japan → Japanese investments in resilient supply chains.
• Digital economy:
  • UPI → global leader in real-time payments.
  • Startups → exporting services & solutions.
  • Digital rails + hard infra = lower costs, higher formalisation, faster growth cycle.

The Scoreboard of Success

• EY projection (2038): India → 2nd largest economy (PPP terms), GDP > $34 trillion.
• Historic parallels:
  • Green Revolution → food self-sufficiency.
  • IT Revolution → services hub.
  • Now → Digital + Clean Energy + Manufacturing revolutions.
• Civilisational ethos: Vasudhaiva Kutumbakam → balancing growth, stability, inclusivity.
• Viksit Bharat 2047:
  • Not just aspiration, but a “deliverable”.
  • Growth → rapid, democratic, inclusive, sustainable.

Giving wings to India’s youth

Civilisational and Philosophical Basis

• Shram Shakti (labour power) = backbone of India’s development.
• Economic progress not just GDP-driven, but rooted in employment creation, social security, and dignity of labour.
• Employment = dignity + equality + national strength (aligns with Directive Principles of State Policy).

Relevance : GS 3(Economic Development & Employment)

Practice Question : Employment in India is not merely an economic indicator but a foundation of social stability. Analyse this statement in light of India’s demographic dividend. (250 words)

 Economic Transformation (2014–2025)

• Global ranking:
  • 2014 → 10th largest economy.
  • 2025 → 4th largest economy.
• Human resource role: Critical in driving both consumption & production.
• Jobs data (RBI-KLEMS):
  • 2004–14 → 2.9 crore jobs created.
  • 2014–24 → 17 crore jobs created (≈6x increase).
• Formalisation trend:
  • EPFO enrolments show surge in formal jobs.
  • Higher labour force participation in organised sector.

Social Security Revolution

• Coverage expansion (2015 → 2025):
  • 2015 → 19% of population under at least one social protection scheme.
  • 2025 → 64.3% coverage (94 crore beneficiaries).
  • Today → 2nd largest social security system globally.
• Acknowledgment: International Labour Organization (ILO) calls it among the fastest expansions globally.
• Instruments:
  • PM-SYM, PM-JAY, PMJJBY, APY, PM-KISAN, and E-Shram.
  • Integration through DBT + JAM trinity ensures transparency, reduces leakages.

Demographic Dividend & Challenges

• 65% of India’s population < 35 years → massive demographic dividend.
• Challenge: If not utilised, risk of demographic disaster.
• Global contrast:
  • India → youthful workforce.
  • West/China → ageing populations.
• Structural vulnerabilities:
  • Automation, AI disruptions.
  • Global supply-chain shifts.
  • Gig/platform economy creating precarity.

Employment as Nation-Building

• Employment is not just an economic indicator but a foundation of social stability.
• Requires:
  • Youth employability (skills + training).
  • Integration into formal economy.
  • Financial literacy.
  • Robust social security net.
• Aim → Convert Yuva Shakti into true national dividend.

Pradhan Mantri Viksit Bharat Rozgar Yojana (PMVBRY)

• Launched: Union Budget 2024–25, PM’s Independence Day 2025 speech.
• Outlay: ₹1 lakh crore (largest in India’s history).
• Target: Create 3.5 crore jobs in 2 years.

Unique Architecture

• Dual focus: workers + employers.
• Part A (Workers):
  • Direct incentive → up to ₹15,000 for first-time employees (2 instalments).
  • Ensures new entrants are linked to social security from day one.
• Part B (Employers):
  • Incentive → up to ₹3,000 per new hire per month.
  • Reduces hiring risks & encourages formalisation.

Structural Shifts

• From scheme-based support → ecosystem-building.
• Integrated with:
  • PLI scheme.
  • National Manufacturing Mission.
  • Make in India.
  • Digital India.
• Encourages competitiveness + inclusivity simultaneously.

Wider Implications

• Formalisation push: New jobs directly tied to EPFO/ESIC → strengthens social security net.
• Equity impact: Even small enterprises & informal workers included.
• Competitiveness: Reduces cost for firms, boosts manufacturing.
• Atmanirbhar Bharat: Employment generation linked to self-reliance, especially in manufacturing hubs.

Strategic Importance

• Employment policy as macroeconomic stabiliser: Raises consumption demand → multiplier effect.
• Social cohesion: Job dignity reduces inequality & unrest.
• Global competitiveness: Strong workforce base → strengthens India’s case as global manufacturing hub.
• Long-term transformation: Converts demographic dividend → Viksit Bharat 2047.

Critiques & Challenges

• Execution risks: Past schemes (e.g., MGNREGA, NAPS) faced delays & leakages.
• Quality of jobs: Risk of low-wage, low-productivity employment unless skills match demand.
• Regional imbalance: Jobs may concentrate in industrial states, bypassing lagging regions.
• Automation & AI: Could limit manufacturing-led employment growth.
• Need for reskilling: Skill gap may limit scheme’s effectiveness.