India’s productivity growth rate more than doubled post-2014
Former Chief Economic Advisor Prof. Krishnamurthy V Subramanian highlighted India's doubled productivity growth post-2014, attributed to reforms under the Modi government. India's Q4FY24 GDP growth surged to 7.8%, with FY24 witnessing robust growth at 8.2%, driven by manufacturing. Post-COVID, 9.7%, 7%, and 8.2% growth rates were achieved alongside moderate inflation, showcasing economic resilience. Subramanian stressed the need for further policy reforms to bolster manufacturing growth, positioning India favourably for future growth towards its $5 trillion economy goal.
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Jun 4, 2024
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Former Chief Economic Advisor (CEA) Prof. Krishnamurthy V Subramanian noted that India's productivity growth rate more than doubled post-2014, reaching 2.7% from the pre-2014 rate of 1.3%. As per government data, this surge occurred after the Narendra Modi-led government came to power. The analysis follows India retaining its position as the world's fastest-growing major economy.
‘’This reflects the several reforms implemented by the Modi government. Higher Growth stems from higher productivity!'' said the ex-CEA in a post on ‘X’.
Days before the consequential Lok Sabha election results, former Chief Economic Advisor Krishnamurthy V Subramanian underscored India's impressive economic performance, with GDP growth hitting 7.8% in Q4FY24, outperforming expectations. For the entire FY24, GDP growth stood at a robust 8.2%, driven by a substantial increase in the manufacturing sector. Subramanian highlighted post-COVID growth rates of 9.7%, 7%, and 8.2%, accompanied by moderate inflation around 5%, contrasting with higher inflation rates in advanced economies. He emphasised the need for further policy reforms to stimulate manufacturing growth, acknowledging Prime Minister Modi's efforts in this regard.
Subramanian defended the credibility of GDP and GVA numbers against critics, asserting the significance of the 7.2% growth in GVA for FY24, particularly buoyed by a 9.9% growth in the manufacturing sector. He highlighted the higher growth in net taxes as a positive economic indicator, contributing to India's journey towards achieving its $ 5 trillion economy goal, given the country's median buoyancy of net taxes over the last decade. Despite ongoing criticism and challenges, the strong economic momentum sets a promising stage for India's future growth prospects.
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