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The BJP's victory in West Bengal represents a moment of peak political performance, but the economy is struggling. India's GDP growth is ninth in per capita terms, eighth in overall GDP growth, and 16th in per capita growth in US dollars. Despite being the fastest-growing major economy, India is now one of just two (along with Turkey) economies that have depreciated against the US dollar for nearly 12 years. The government's approach to the economy has been to apply band-aids instead of performing the necessary surgery. This includes establishing industrial investment zones to make India more attractive to investors, rather than addressing the root causes of economic stagnation. The result is a paradox: inflation has been contained, but growth remains stagnant, and the economy continues to expand at a pace proudly touted as the fastest among the world's major economies. The political high is self-evident, but the economic low is a near-empathic political crisis in West Bengal and the near one-party democratic rule in India. For some, the 'Isn't India the fastest-growing major economy in the world' argument may be an exaggeration. The catch lies in that 35-year period of BJP rule from 2014 onwards, India's rank in terms of GDP per capita year average. The government response has been to apply band-aids instead of performing the surgery needed to make investment in India more attractive to Indians and foreigners alike. One such band-aid is an appeal to Indians to invest more at home. It was established with their feet: individual investors and firms respond to economic incentives, not moral appeals or what rulers perceive as national interest. And the incentive to do the same?
As the BJP celebrates its electoral victory in West Bengal, the economy faces a paradox: low growth and high inflation. How can this be?
The BJP's victory in West Bengal marks a political peak, yet the economy struggles with low growth and high inflation.
India's GDP growth is ninth in per capita terms, eighth in overall GDP growth, and 16th in per capita growth in US dollars.
Think of the economy as a patient in need of surgery. The government is applying band-aids instead of performing the necessary surgery.
Understanding this paradox is crucial for young adults as they consider career paths in economics, politics, or business. It highlights the complexities of governance and economic policy.
This paradox reflects historical patterns of political success not translating to economic prosperity. It also sets the stage for future economic reforms and policy changes.