'Counterproductive Fiscal Policy': Economists Criticise Modi Government As GDP Growth Hits Lowest In Seven Quarters

After the growth rate of India's Gross Domestic Product (GDP) was reported at 5.4 per cent for the second quarter (Q2) of financial year 2024-25 (FY25), many economists criticised the government.

"The latest GDP/GVA numbers, current/constant (Q2 FY25), show that we have been running an unnecessarily hawkish and counterproductive monetary/fiscal policy," Harsh Madhusudan said.

He said that the only conclusion that can be drawn is that the Prime Minister's Office, Finance Ministry and Reserve Bank of India (RBI) Governor are getting the wrong advice.

The Real GDP growth for Q2 FY 2024-25 is 5.4 per cent, down from 8.1 per cent in Q2 FY 2023-24 and also the lowest in the last seven quarters, that means in over two years.

The numbers released on Friday (29 November) by National Statistics Office (NSO) show a decrease from 6.7 per cent growth rate in Q1 of FY25 and is lower than the estimate of 6.5 per cent for Q2 FY25.

Investor Sahil Kapoor said, "A generalised slowdown. Reflective of lower Government spend. Manufacturing and Mining take a major hit. Almost everything else has slowed. No surprises."

Trader Surya Kanegaonkar said, "Without supply-side reforms, agricultural market liberalisation and manufacturing industrial policy focused on scaling up end-to-end supply chains, GDP numbers will not improve."