New Delhi: With an overhaul of GDP calculating measures, India’s growth story is in the spotlight again. In an article headlined ‘India’s economy is not as big as economists thought’, with a five-word strap ‘But it is growing faster’, The Economist notes that revised data show India’s GDP is 3.3 percent smaller than earlier estimates.
“The methodological update, the first since 2015, reset the “base year”—which sets the weights for different parts of the economy—to 2022. It also added new data sources that capture a clearer picture of the Indian economy,” says the report.
However, the revised data also show that some sectors of the economy are smaller than previously estimated, according to the report.
Agriculture, which accounts for 18 percent of the GDP, looks larger, primarily due to more detailed data on fisheries and dairy. Finance and business services also recorded slightly higher output, while commerce, hotels and transport produced 26 percent less.
As a result, the service sector appears 8 percent smaller under the new methodology and now makes up 41 percent of the economy. Manufacturing, which accounts for 15 percent, has also shrunk slightly, the report says.
But the report adds that “India is growing even faster than previously believed”. GDP expanded by 7.1 percent in FY 2024-25, revised up from an earlier estimate of 6.5 percent. Other data suggest the economy has continued to grow rapidly, despite facing steep tariffs on exports to the US.
However, The Economist, in ‘Is India the fourth- or fifth-biggest economy? It does not matter’, talks about the fine print of this economic growth.
“Officials have trumpeted for months that India’s GDP is the world’s fourth-largest, having overtaken Japan’s and lagging behind only those of America, China and Germany. One minister boasted it would be third by 2027. The triumphalism is premature.”
And while the revised GDP measures have already put India back again at the fifth spot, the country is far behind the US and China.
India’s economy is about one-fifth the size of China’s and roughly an eighth of America’s. Even when combined with Germany and Japan, the three economies amount to only about two-thirds of China’s.
“Ordinary citizens may not know the precise numbers but they are no dummies. It is obvious that India is not in the same league,” the report says.
Moreover, the column says that an even more important measure of economic growth is how people experience an economy.
Indians “cannot fail to notice the sewage that seeps into the drinking water, for it makes them ill, nor the bridges that collapse with metronomic regularity, for they are the ones liable to be crushed.”
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BRICS’ dilemma
Ana Ionova of The New York Times reports on BRICS’ and India’s stance on the Israeli and American strikes over Iran in ‘A Loose Band of Emerging Powers Is Divided Over Iran’.
She says that while Brazil, China and Russia “swiftly condemned” the military attack on Iran, India seemed to favour the opposite side in the war, “favoring the United States and Israel by staying quiet about their bombardment, while criticizing Iran’s retaliatory attacks in the region”.
Since its formation in 2009, the BRICS has aspired to create an alternative bloc of economic power that is less dependent on the US dollar. However, in cases of armed conflict, the bloc has remained less united, the NYT writes.
“Notably absent was any joint statement or show of solidarity. It was a clear sign the conflict may be testing the unity of BRICS and forcing it to grapple with an uncomfortable question: Can it really build a new world order, as it aspires to do, without ideological alignment among its members?”
The loyalty of the bloc is under pressure, and India is not faring well, the NYT writes. “India, for one, has quietly obeyed American demands to quit buying Iranian oil and had also moved to reduce its imports of Russian crude. Recently, India also appeared to abandon plans for a port project in Iran, seemingly spooked by the threat of U.S. sanctions.”
Following the election of a new government in Bangladesh, India and Bangladesh are working to warm up relations between the two nations. ‘Bangladesh is working with India to extradite 2 suspects in killing of prominent activist.’ Julhas Alam of Associated Press reports on the development.
Osman Hadi, a political activist, was fatally shot in December last year, leading to protests against India for housing Sheikh Hasina, alleging that Hasina’s party Awami League was operating from New Delhi, and had a role to play in Hadi’s death.
Hadi was part of the July Revolution in 2024 in Bangladesh that overthrew the Hasina government.
“Bangladesh’s police chief said Monday that diplomatic efforts are being made with India to arrange the handover of two suspects in the December killing of a Bangladeshi political activist that sparked protests across the country,” Alam writes.
Authorities in India said Sunday that a special police team arrested two Bangladeshi nationals, Faisal Karim Masud and Alamgir Hossain, during a raid in Bongaon in the North 24 Parganas district of West Bengal, Alam reports.
The two countries will be using the extradition treaty to facilitate the transfer of the subjects.
(Edited by Ajeet Tiwari)
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