Content:

1. Battle for growth
2. India’s burden of rising obesity, the hefty cost to pay
3. Australia, the partner for India’s growth trajectory

Battle for Growth

Context : Economic Growth Trends and Challenges

• Q3FY25 GDP Growth:
  • India registered a 6.2% real GDP growth rate, improving from the revised 5.6% (5.4%) in the previous quarter.
  • This marks the slowest growth since Q4FY23, apart from the last quarter.

• Full-year Growth Target:
  • The government’s 6.5% GDP growth target appears unattainable due to global headwinds and domestic sectoral slowdowns.
  • External risks include tariff-induced imported inflation and tepid performance in manufacturing and services.

Relevance : GS 3(Indian Economy )

Practice Question :”While government spending and private consumption have provided a boost to economic growth, structural weaknesses in manufacturing and services sectors pose challenges to sustained growth.” Analyze in the context of India’s economic performance in FY25. (250 words)

Sector-wise Performance

• Primary Sector (Agriculture, Mining, etc.):
  • Strong growth at 5.2% (up from 1.8% in the same quarter last year).
  • Played a crucial role in driving Q3FY25 growth.

• Secondary Sector (Manufacturing & Industry):
  • Slowed to 4.8%, a sharp decline from 12.4% last year.
  • Manufacturing remains vulnerable to global trade uncertainties, including U.S. import tariffs (25% on steel, pharmaceuticals).
  • Pharma exports to the U.S. account for 31% ($8.7 billion) of total exports, making this a significant risk.
  • Some Indian pharma firms are considering shifting production to the U.S., posing a potential trade revenue loss for India.

• Tertiary Sector (Services):
  • Growth slowed to 7.4%, compared to 8.3% last year.
  • Services sector, particularly IT and business outsourcing, remains sensitive to global demand fluctuations.

Government & Private Consumption as Growth Drivers

• Government Spending:
  • Increased by 8.3%, significantly up from 2.3% in the previous quarter.
  • Fiscal spending has provided a major boost to economic activity.

• Private Consumption Expenditure:
  • Grew by 6.9% (compared to 5.7% last quarter), driven by moderation in inflation.
  • Large-scale events like Maha Kumbh could further propel short-term demand in Q4FY25.

Inflation Trends and RBI’s Outlook

• Current Inflation Levels:
  • The RBI projects FY25 inflation at 4.8%, expected to decline to 4.2% in FY26.
  • This aligns with the RBI’s medium-term target of 4%, indicating a more stable price environment.

• Uncertainty in Inflation Data:
  • NSO’s revised methodology has raised concerns about data accuracy and consistency.
  • The agency claims its estimates are based on detailed sectoral revisions but has not clearly explained the nature or impact of changes.
  • Lack of transparency could affect confidence in economic indicators and policy planning.

Key Risks & Uncertainties

• Global Trade Tensions:
  • The U.S.’s 25% import tariffs on key sectors like steel and pharmaceuticals could disrupt Indian exports.
  • Possible relocation of Indian pharma manufacturing to the U.S. could lead to a domestic production slowdown.

• Structural Weakness in Manufacturing & Services:
  • Slowdown in these sectors signals a need for stronger policy interventions (e.g., PLI schemes, trade diversification).

• Data Reliability Issues:
  • NSO’s lack of transparency in GDP calculation methodology raises doubts about future estimates.
  • Calls for clarity in statistical revisions to maintain credibility.

India’s Burden of Rising Obesity, the Hefty Cost to Pay

Current Scenario of Obesity in India

• Epidemiological Transition: Rising overweight and obesity levels over the last two decades.
• NFHS-5 (2019-21): Nearly 1 in 4 men or women in India are obese.
• State-Wise Variation: Overweight and obesity range from 8% to 50% across states and demographics.
• Childhood Obesity: One of the fastest-growing concerns globally, as per the World Obesity Federation.
• Rising Trend: Adult obesity has doubled in 15 years and tripled in 30 years.
• ICMR Study (2023, The Lancet):
  • 35 crore adults (over 20 years) have abdominal obesity.
  • 25 crore adults have general obesity.
  • 21 crore adults have high blood cholesterol.

Relevance : GS 2(Health , Governance)

Practice Question: ”Rising obesity in India is not just a public health concern but an economic burden as well.” Discuss the underlying causes, consequences, and policy measures required to tackle this challenge. (250 words)

Why the Issue Needs Urgent Attention

• Societal Normalization: Obesity is often seen as a personal issue rather than a public health concern.
• Dietary Challenges: Despite calorie sufficiency, 55% (78 crore people) cannot afford a healthy diet.
• Nutritional Deficiency: 40% of people lack an adequate nutrient-rich diet.
• Food Availability Shift: Increase in high fat, salt, sugar (HFSS) and ultra-processed food (UPF).
• Lifestyle Factors: Urbanization has led to sedentary habits; 50% of Indians fail to meet WHO’s recommended physical activity levels.
• Health Risks:
  • “Thin Fat Indian” hypothesis – Indians with normal BMI still have high body fat.
  • Obesity is a major risk factor for diabetes, hypertension, and liver disorders.
  • 1 in 4 Indian adults (25 crore) is diabetic or prediabetic.
• Economic Impact:
  • Global Obesity Observatory (2019): ₹1,800 per capita (1.02% of GDP).
  • Projected Cost (2030): ₹4,700 per capita (1.57% of GDP).
  • Costs linked to healthcare expenses and productivity loss.

Policy and Programmatic Solutions

• Public Awareness & Screening: Recognize obesity as a disease, integrate routine BMI and waist circumference checks in healthcare, and educate on ideal weight parameters.

• Active Lifestyles & Infrastructure: Improve urban planning with cycle lanes, parks, and open gyms; ensure free access to fitness facilities.

• Food Regulation & Industry Accountability: Tax HFSS & UPF products, subsidize healthier foods, promote ethical marketing, and encourage CSR funding for healthy lifestyle initiatives.

• Education & Workplace Interventions: Include nutrition education in schools, regulate canteen menus, adopt Japan’s dietitian model, and implement regular body fat analysis at workplaces.

• Policy & Research Strengthening: Multi-ministerial coordination under Suposhan Abhiyan, capacity-building of healthcare providers, and data-driven obesity management through epidemiological studies.

Australia, the Partner for India’s Growth Trajectory

Strategic Complementarity: Australia sees itself as a natural partner in India’s economic growth due to complementary economies—Australia supplies critical resources, while India offers a large skilled workforce and market potential.

Relevance : GS 2(International Relations)

Practice Question :Discuss the significance of the India-Australia economic partnership in the context of global trade realignments. Highlight the key sectors of cooperation and the challenges that need to be addressed. (250 words)

• Trade Growth & Free Trade Agreement Impact:
  • India’s exports to Australia have grown 66% in five years, nearly double the growth rate of its global exports.
  • The Economic Cooperation and Trade Agreement (ECTA) has fueled stronger trade ties, demonstrating the benefits of economic liberalization.

• The New Roadmap & Key Sectors:
  • Focuses on four “superhighways of growth”: clean energy, education & skills, agribusiness, and tourism.
  • Identifies seven additional economic corridors: investment, technology, sports, culture, resources, defence, space, and health.

• Support for India’s Energy & Manufacturing Needs:
  • Australia provides critical minerals for India’s EV revolution, holding major reserves of lithium, nickel, and cobalt.
  • Strengthening energy partnerships to meet India’s growing power demands.

• Education & Skill Development:
  • Australia recognizes India’s need to skill 2 crore people annually and has responded by setting up foreign university campuses in India.
  • Australian universities are positioning themselves as key partners in India’s higher education landscape.

• Indian Diaspora as a Growth Bridge:
  • The 10-lakh-strong Indian diaspora in Australia plays a key role in deepening ties and fostering business opportunities.
  • Investments in programs like the Maitri grants further strengthen these links.

• Path Forward:
  • Comprehensive Economic Cooperation Agreement (CECA) is the next step to deepen economic integration.
  • Australia’s long-term commitment to India’s growth signals a shift towards a more robust and diversified bilateral partnership.

The Australia-India partnership is evolving beyond trade into strategic collaboration across sectors, driven by shared economic interests and people-to-people ties.