Navigating the Challenges: Revitalizing India's Economic Growth Amid Slowdown
India's GDP growth rate for the second quarter of fiscal year 2024-25 is 5.4%, a seven-quarter low, which is concerning compared to the 8.1% growth rate in the same period last year. The government views this decline as temporary and cyclic, expecting a recovery in the third quarter. However, economists criticize this optimistic outlook, emphasizing the need for structural reforms to boost investment, exports, and job creation. GDP growth primarily depends on four factors: consumption, government investment, business investment, and Balance of trade. Let's dive into these factors to understand the reasons behind the slowdown in GDP growth. Consumption Consumption significantly contributes to GDP, but it is facing weak urban demand. This is evident from the growth reports of various consumer-oriented companies. For instance, there is a decline in the consumption of FMCG products; McDonald's and KFC reported lower footfall and smaller order sizes; Voltas and Whirlpool reporte...