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The Indian Economy in the Post-pandemic World: Opportunities and Challenges

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India’s Contemporary Macroeconomic Themes

Part of the book series: India Studies in Business and Economics ((ISBE))

Abstract

In this descriptive study, we first analyze what the medium term future looks like for the Indian economy in a post-pandemic world, both in the context of an uncertain global environment and also in the context of India's own structural problems. We also highlight the structural challenges and opportunities for the Indian economy—what are the obstacles in India’s growth trajectory going forward, and what can be done to overcome them as India maneuvers through a complex global environment where geopolitics dominate trade, climate change concerns become critical and authoritarian regimes may increasingly lose favor with foreign investors and corporations. The objective is to provide a broad assessment of the factors that need to be critically addressed in order for India to not only achieve and sustain a high rate of growth but also to make the leap to a high income country and create adequate jobs.

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Notes

  1. 1.

    Data obtained from the Second Revised Estimates for 2020–21 released on February 28, 2023 by the MOSPI (Ministry of Statistics and Program Implementation). It may be noted that national accounts statistics in India especially GDP data are potentially fraught with measurement errors as detailed in multiple studies (see for example, Nagaraj et al. (2020), Nagaraj and Srinivasan (2017), among others) and hence should be interpreted with caution. Wherever possible we have therefore supplemented this information with data from the private sector databases such as those published by the Centre for Monitoring Indian Economy (CMIE). All growth numbers are in constant prices (2011–12).

  2. 2.

    Data obtained from the Second Revised Estimates for 2020–21 released on February 28, 2023 by the MOSPI.

  3. 3.

    Data obtained from the First Revised Estimates for 2021–22 released on February 28, 2023 by the MOSPI.

  4. 4.

    Data obtained from the Second Advance Estimates for 2022–23 released on February 28, 2023 by the MOSPI.

  5. 5.

    Also see Roy et al. (2022), Dreze and Somanchi (2023) on poverty estimates.

  6. 6.

    Nominal values have been converted into real by using consumer price index (CPI) of the corresponding quarter.

  7. 7.

    See Srivastava (2023a) on how digital transformation will help accelerate growth.

  8. 8.

    Singh, N.K. (2022), “Freebies are a passport to fiscal disasters”, Indian Express, April 22, 2022 https://indianexpress.com/article/opinion/columns/freebies-are-a-passport-to-fiscal-disaster-7879244/;

  9. 9.

    Subbarao (2022), “States, Freebies and the costs of fiscal profligacy”, The Hindu, June 27, 2022, https://www.thehindu.com/opinion/lead/states-freebies-and-the-costs-of-fiscal-profligacy/article65573164.ece; Rangarajan (2022), “Good and Bad Freebies”, Indian Express, June 16, 2022.

  10. 10.

    See Mitra (2023) for arguments in favour of manufacturing-fed and export-led growth.

  11. 11.

    First Lecture of Niti Aayog's ‘Transforming India” initiative, August 26, 2016.

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Acknowledgements

We thank Dr. Govinda Rao and other participants for their comments on an earlier version of the paper presented at the conference on “India's Contemporary Macroeconomic Themes”, honouring and celebrating the 90th Birth Anniversary of Dr. C. Rangarajan, held at the Madras School of Economics, April 21 and 22, 2023. The chapter also draws from the authors’ IGIDR working paper http://www.igidr.ac.in/pdf/publication/WP-2023-006.pdf

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Authors and Affiliations

  1. Faculty of Social Sciences, ICFAI, Hyderabad, India

    S. Mahendra Dev

  2. Former Director, IGIDR, Mumbai, India

    S. Mahendra Dev

  3. Indira Gandhi Institute of Development Research (IGIDR), Mumbai, India

    Rajeswari Sengupta

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  1. S. Mahendra Dev
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Correspondence to S. Mahendra Dev .

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  1. Ernst & Young India, New Delhi, Delhi, India

    D. K. Srivastava

  2. Madras School of Economics, Chennai, Tamil Nadu, India

    K. R. Shanmugam

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Dev, S.M., Sengupta, R. (2023). The Indian Economy in the Post-pandemic World: Opportunities and Challenges. In: Srivastava, D.K., Shanmugam, K.R. (eds) India’s Contemporary Macroeconomic Themes. India Studies in Business and Economics. Springer, Singapore. https://doi.org/10.1007/978-981-99-5728-6_2

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