Thursday, February 22, 2024

Growth is welcome but equity is important too

On 29 November 2023, the Indian stock market achieved a milestone, touching $4 trillion in market capitalization for the first time. This is higher than the country’s gross domestic product (GDP) of $3.4 trillion. A day later, GDP data released by the National Statistical Office for the second quarter of 2023-24 gave us an inkling why. At 7.6%, the quarter’s GDP growth has more than lived up to the Reserve Bank of India Governor Shaktikanta Das’s prophecy of an upside surprise. 

Even with the prospect of a slowdown in the year’s second half, India is poised to become one of the fastest growing major economies in the world. CLSA, an investment group, projects India’s GDP at $45 trillion by 2052, making it the world’s largest. Yet, this is a rather inexact measure of individual well-being. 

For that, we need to look at per capita income, a less inexact metric, and the sectoral distribution of growth. A reliable figure for median income (not an upward-skewed average, mind you), the level which splits a population into upper and lower halves, would tell us how people at large are doing. And then it’ll be clear we have a long way to go. Let’s not forget that equity is as important as growth.

#Growth #equity #important

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