India’s 7.8% economic growth has triggered a new question, mostly online: if the economy is growing this fast, why is Prime Minister Narendra Modi asking Indians to cut back on overseas travel, foreign weddings and unnecessary gold purchases?
Zoho founder Sridhar Vembu has offered an explanation, saying India still needs to conserve foreign exchange even as its economy expands.
Modi on Tuesday highlighted India’s 7.8% growth and called for greater self-reliance. He urged Indians to avoid foreign holidays and weddings abroad and said gold should not be bought unless necessary .
Vembu responded to an X post by an user, who asked: “If economy is growing at 7.8% why is the PM asking us not to travel abroad, not to buy gold, not to have foreign weddings etc.? And why is the share market almost static or down? Any economists explain???”
Vembu said the answer lies in the experience of East Asian economies that went through rapid growth while also trying to conserve foreign exchange.
“Let me explain: East Asian nations (Japan, Taiwan, South Korea and later China) all went through a phase of rapid GDP growth combined with the need to conserve foreign exchange. Here is why that happens,” Vembu said.
