A reflexive cheer of India as the fastest-growing major economy rang out when the National Statistics Office (NSO) announced in late August that GDP had increased in the April-June quarter at an annual rate of 7.8%. The most euphoric cheerleaders predicted growth to accelerate to 8%. Even conservative forecasters routinely project GDP growth between 6% and 7%.
This GDP-centric framing of alleged Indian economic success is wrong-headed. GDP is a flawed metric of national economic welfare. It hides inequalities and deflects attention from acute job scarcity, poor education and health, unlivable cities, a broken judicial system, and environmental damage. Feverish celebrations of India’s large but unequally distributed GDP hide the struggles of large numbers of people; large GDP is not purchasing power.
For India, ‘fastest-growing’ growing GDP should be a trivial achievement. Just as a 10-year-old child gains height more rapidly than a 20-year-old adult, India as the poorest of the major economies should grow fastest. Embarrassingly, it has failed to consistently do so. In fact, contrary to the hype, GDP growth has slowed sharply over the past two decades. The problem has been weak mass demand.
