India’s GDP growth for 2024-25, as per government data, is expected to be 6.4%. This rate of growth is not a cause for celebration. If India is to encash its historic demographic dividend, sustained GDP growth of at least 8% is necessary. Unfortunately, over the last few years India has consistently failed to achieve these targets. The Modi government is marching India forward into the middle income trap, which will make us uncompetitive, underproductive, and unequal.

GDP growth in the 6% range is insufficient to create jobs for our growing youth population, especially when rapid technological change is disrupting the future of jobs. It will keep India stuck in a state of high inequality, where two-thirds of our population remain dependent on free grains from the government, while the Prime Minister’s favoured few accumulate wealth rapidly. Such economic underperformance robs millions of the Constitution’s promise of a more just, prosperous, and equal future.

But the Modi government appears focused on enriching his coterie of corporate supporters. In 2019, it announced a massive tax cut for corporations, but the private sector has not stepped-up investment in return. Common people and small businesses continue to be burdened with punitive taxes on fuel and an extractive Goods and Services Tax regime. The unplanned COVID-19 lockdown, the harshest in the world, brought the economy to a standstill. The following years, some unequal recovery ensued but that too is tapering off. In every corner of the country, families, workers, farmers, and businesses are feeling the weight of the government’s failure to deliver on its core commitments and poll promises.

The first step toward fixing the economy is to acknowledge what is going wrong. Instead, the government has consistently discredited unfavourable data and stayed in a state of denial. This report aims to set record straight by providing a clear picture of various crucial dimensions of the economy. Such constructive criticism is intended to point toward ways to restore India to a future of prosperity, opportunity, and inclusive growth.

Let us therefore examine the different dimensions of India’s economic malaise:

UNEMPLOYMENT CRISIS

Jobs, the cornerstone of Prime Minister Modi’s pitch to the youth, are nowhere to be found. Indian youth continue to struggle due to lack of gainful employment. Factories have shut down, small businesses are struggling to survive, and the dreams of an entire generation have been crushed. The Modi government’s abject failure to address India’s unemployment crisis has left the country reeling under the weight of broken promises and economic mismanagement.

Youth unemployment stood at a staggering 45.4% in 2022-23. Practically every second young person is jobless. Joblessness is particularly high among the educated youth. Graduates face a 29.1% unemployment rate. There has been serial job destruction in the formal sector. The share of manufacturing in the workforce has declined from 12.6% in 2011-12 to just 11.4% in 2023-24. More people are moving back to farms when they should be working in the factories. For the first time in decades, the share of workers engaged in agriculture has increased rising from 42.5% in 2018-19 to 46.1% in 2023-24. Due to lack of quality job creation, over over half of men and two thirds of women are now self-employed, typically in low-productivity and low-income jobs. Job growth in the non-farm sector has dropped from a high of 75 lakh per year under the UPA to just 29 lakh per year under the Modi government.

UNINSPIRING AND UNEQUAL GDP GROWTH

The 2024 GDP growth estimate of 6.4% is a sharp decline from the 8.2% recorded the previous year, despite favourable conditions like a normal monsoon and no major external shocks. This is the unmistakable result of a decade of economic mismanagement, and it spells disaster for the millions of Indians already struggling under mounting inequality. The decade of BJP rule has seen a fall in average growth to 6%, compared to the 7.6% average under the Congress-led UPA. India faces a "Middle Income Trap," with per capita income growing at a sluggish pace of just 4.52% since 2014. The benefits of growth have been disproportionately captured by the richest, with the number of billionaires increasing to 200 and their wealth rising 41% in 2024 - while the vast majority of Indians grapple with stagnant incomes. Income inequality in India has worsened to levels unseen even under British rule, with the top 1% controlling over 40% of the nation's wealth. Meanwhile, one-third of Indians survive on less than Rs. 100 a day. Government debt (including states) has soared to an unsustainable 83% of GDP, leaving future generations to cope with this heavy fiscal burden.

STAGNANT INCOMES, LOW HOUSEHOLD CONSUMPTION, AND DECLINING SAVINGS

From workers in agriculture and construction to salaried employees, incomes have remained stagnant or, in some cases, even declined. This stagnation, coupled with high taxes and poor policy decisions, has eroded household savings and crushed consumption, driving millions further into debt. Since 2014, real wage growth has been abysmal: agricultural labourers have seen an increase of just 0.8%, non-agricultural workers 0.2%, and construction workers have faced negative wage growth. Salaried workers, too, have seen their wages decline by 1% annually. Household savings have plummeted to a 47-year low, while consumption growth has hit a 20-year low, with private consumption growth falling to 4% in 2023-24. The poorest 20% of households have faced the harshest income losses, with their earnings dropping by more than 50% by 2021. Household debt has soared, with a record 39% of GDP tied up in debt.

MANUFACTURING IN DECLINE

The Modi government’s flagship “Make in India” initiative, aimed at revitalising India’s manufacturing sector, has been an unmitigated failure. Manufacturing, which was supposed to be the engine of job creation and industrial growth, is struggling under the weight of inconsistent policies, regulatory confusion, and systemic neglect. Manufacturing growth has limped along at a mere 5.8% annually, well below the promised 12-14%. The share of manufacturing in India’s GDP has remained stagnant at 15.8%, falling far short of the 25% target set for 2022. The promise of creating 100 million manufacturing jobs by 2022 has evaporated, with manufacturing jobs halving between 2016 and 2021. The Index of Industrial Production (IIP) has grown at a lacklustre average of just 3.2% annually, with critical sectors like textiles and electrical equipment suffering negative growth. Small and medium enterprises (SMEs) have been hit hardest, with 24 lakh units shutting down between 2015-16 and 2021-22, and 81 lakh manufacturing jobs lost during this period.

TRADE AND INVESTMENT

In the past decade, India’s trade and investment performance has taken a devastating hit. India’s export sector is at its weakest in years, while foreign investment is dwindling. Private investment has not picked up. The government’s inability to address this economic malaise has put India on a path of stagnation. Exports, once at 25.2% of GDP under the UPA, have now plummeted to below 20%. Instead of building self-sufficiency, our industrial reliance on China has increased, with imports surging by 83% since 2019-20 (compared to 17% growth in exports) Investments (Gross Fixed Capital Formation) has averaged 29% since 2014. During UPA, average investments were consistently above 30%. Investments are not only sluggish but on a downward trajectory, with new project announcements by the private sector falling by 21% between FY23 and FY24. Foreign Direct Investments (FDI) as a percentage of GDP has dropped to a pitiful 0.8% in 2023. Complex taxation and rising red tape are directly responsible for the fall in investments. Even after an extractive GST, net revenues have grown slower than they did in the pre-GST years. In labour-intensive sectors like garments, exports have actually fallen - from $15 billion in 2013-14 to $14.5 billion in 2023-2024. An estimated 21,300 millionaires – individuals with total assets greater than $ 1 million – left India between 2022 and 2025.

AN ERODING WELFARE STATE

The Modi government has systematically dismantled the welfare state, leaving millions of citizens to fend for themselves. Social safety nets for the most vulnerable have been torn apart, with government schemes slashed, essential services gutted, and inequalities deepened. Despite the pandemic's severe impact, budget allocations for food security have plummeted. India's position on the Global Hunger Index has steadily worsened. India ranked 105th out of 127 countries in 2024. Chronic malnutrition affects over 38% of children. Budget cuts have slashed essential welfare schemes, including the National Food Security Act and the PM Matru Vandana Yojana. The failure to conduct the decadal Population Census means that a minimum of 10 crore Indian citizens have been denied rations guaranteed to them through the National Food Security Act (2013). Healthcare allocations have been slashed, with the health budget now just 0.27% of GDP, far from the 2.5% target set by the National Health Policy.

MGNREGA UNDER ATTACK

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has been a crucial lifeline for millions of rural families, especially during the COVID-19 pandemic. Yet, under the Modi government, this essential programme has faced relentless attacks, as the government has steadily cut its budget allocations, deleted job cards, and introduced reforms that jeopardize the livelihood of rural workers. Despite the increasing demand for MGNREGA work, the programme’s budget share has plummeted from 2.15% in 2019-20 to just 1.33% in 2023-24. The 2024-25 allocation failed to meet the scheme’s requirements. Nearly 4 crore job cards were deleted between 2019 and 2024. By imposing an Aadhar-based payment system, the government has excluded nearly 50 lakh workers from wage payments. MGNREGA wages have been growing at measly rates – despite consistent demands from workers and the Parliamentary Committee on Rural Development to raise them to Rs. 375 per day.

AGRARIAN CRISIS AND FARMER DISTRESS

India's agricultural sector, which employs nearly half the population, faces a deep crisis under the Modi government’s economic mismanagement. Despite the workforce’s heavy reliance on agriculture, its contribution to the economy has drastically shrunk, with growth falling from 4.7% in 2022-23 to a mere 1.4% in 2023-24 – the lowest in eight years. 70% of farmers earn Rs. 11,000 to Rs. 13,500 per month, with barely any surplus after covering their basic consumption. Post-COVID, 56 lakh workers were absorbed into agriculture, but with stagnant output, these workers face disguised unemployment. Over 55% of agricultural households are in debt, with an average liability of Rs. 91,231. Despite this, the consistent demand made by farmer organisations for an agricultural loan waiver has been ignored. Dr Manmohan Singh’s government increased the Minimum Support Price (MSP) for wheat by 119% and for rice by 134%, while the current Government has raised it by about 47% for wheat and about 50% for rice. These increases are highly inadequate to cover the comprehensive input costs borne by farmers. Despite assurances made by the Government to the farmers during the Farm Protests, the Government has refused to make MSP a legal guarantee or set prices according to the Swaminathan Commission’s formula. PM-KISAN has not been indexed to inflation, with farmers continuing to get the flat Rs. 6,000 they received in 2019 – despite high inflation in the intervening years. PM Fasal Bima Yojana has been a flop, with farmers struggling to get adequate insurance payments on time. The tragic consequence of the agrarian crisis is the 1,00,474 farmer suicides between 2014 and 2022.

INFLATION

The Modi government's economic policies have worsened inflation, eroded real incomes, and undermined the livelihoods of the Indian people. Inflation is eating away at purchasing power. Food costs have risen faster than incomes, leaving families with less for essential needs like healthcare and education. In 2024, the cost of a home-cooked vegetarian meal rose by 10%. From 2009-14, under UPA II, wages grew by 8.6% for farm workers and 6% for non-farm workers. In contrast, during PM Modi's tenure, farm wage growth fell to -0.6%, and non-farm wages saw a decline of -1.4%, making it even more difficult for people to cope with inflation. Excise duties on petrol and diesel have been increased by over 100% (petrol) and 343% (diesel) since 2014. Inflation has eroded the returns on Fixed Deposits (FDs), once considered a reliable investment option for retirees. The rupee has depreciated from Rs. 58 per dollar in 2014 to over Rs. 86 per dollar, increasing the costs of imports and stoking further inflation.

CRONY CAPITALISM

Crony capitalism has become a defining feature of India's political economy. PM Modi's close ties with billionaires like Adani and Ambani have fuelled the rapid concentration of wealth in the hands of a few, with the government acting as a facilitator of their corporate empires. While ordinary Indians face unemployment and rising inequality, these business magnates have thrived, benefiting from lucrative government contracts and favourable policies. Public sector banks have been exploited in order to finance corporate expansions, with over Rs. 9.90 lakh crore written off in the past five years. The Adani group’s debt ballooned to Rs. 1.1 lakh crore, with public sector investors in the group like LIC and SBI exposed to massive f inancial risks. PM Modi’s diplomatic engagements have increasingly served the Adani group’s expansion, which has secured deals shortly after the PM's visits to countries like Sri Lanka, Kenya, and Bangladesh. The Adani group’s growing involvement in India’s defence sector is alarming for India’s national security. With minimal experience, Adani has secured high-profile defence contracts, sidelining both established players and domestic startups. Anil Ambani’s windfall from the Rafale deal, despite his inexperience, and his subsequent bankruptcy, is a commentary on the perils of PM Modi’s crony capitalism, where national security is compromised to favour a handful of businessmen. As Former RBI Deputy Governor Viral Acharya has established, 5 big conglomerates - including the Adani Group – are building monopolies in 40 sectors, including cement. In 2015, when a common man used to spend Rs. 100 on goods, Rs. 18 would go as profit to the business owner. In 2021, the owner now gets Rs. 36 in profits.

BJP’S ATTACKS ON INSTITUTIONS

The BJP government has unleashed a relentless assault on India’s institutions, systematically weakening their autonomy and accountability. Once revered for their ability to ensure transparency, governance, and public trust, these institutions are now increasingly becoming tools of political expediency, fostering crony capitalism, economic mismanagement, and a breakdown of accountability. The Insolvency and Bankruptcy Board has failed to deliver effective corporate resolutions. High creditor losses, massive haircuts, and delays are routine. Influential corporates have gained from distress sales at the expense of creditors. The Modi government has undermined the Reserve Bank of India's independence, including through controversial appointments and the invocation of Section 7, which allowed direct government intervention in the central bank's operations. The Electoral Bonds scheme facilitated opaque political funding mainly to the ruling party. When the Supreme Court mandated the disclosure of Electoral Bonds data, a clear pattern of intimidation by tax authorities to seek “post-raid” donations for the BJP was revealed. 41 corporate groups, facing a total of 56 ED/CBI/IT raids, gave Rs. 1,853 crore to the BJP after they were raided.

SUPPRESSION OF CRITICAL DATA

The suppression of key data or significant delays in the availability of crucial economic data have become a pattern in the last decade. This has the effect of distorting policies and hindering accountability. When data reveal unfavourable patterns, the government typically claims that the methodology is flawed. By withholding important information, the government has compromised the accuracy of national data and made it harder to address critical issues in areas like health, education, and employment. The 2021 Census, essential for demographic planning and resource allocation, has been delayed for years after the COVID-19 pandemic ended. Several indices have not been updated for multiple years while official reports critical of government’s performance are dismissed and disowned. The 2017-18 Periodic Labour Force Survey, which revealed a 45-year high in unemployment, was withheld for release until after the 2019 elections. India’s international credibility is compromised when the government dismisses global indices like the Global Hunger Index, without addressing their findings.