Strong GDP, Weak Household Relief

Source :https://odishapostepaper.com/edition/5876/orissapost/page/6

Strong GDP, Weak Household Relief

-Bruhaspati Samal-

India is once again celebrating an impressive economic headline. The Ministry of Statistics and Programme Implementation (MoSPI) has reported real GDP growth of 7.8% in the first quarter of 2026–27, covering April–June 2026. Nominal GDP grew by 10.3%, while real Gross Value Added (GVA) increased by 8.2%. Investment grew by 11.9%, domestic consumption by 7.1% and exports by 12%. These figures are certainly significant and indicate considerable economic activity. The Government has rightly presented them as evidence of resilience and growth. Yet, beyond these impressive numbers lies another India of unemployed youth, informal workers, migrant labourers and families struggling to maintain their standard of living. The question confronting ordinary citizens is simple: if GDP is growing so rapidly, why is economic relief not reaching households with equal speed?

The debate over the 7.8% figure has become politically charged, but it deserves a serious economic examination. Former RBI Governor Raghuram Rajan has questioned why such strong GDP growth is not accompanied by equally convincing evidence of employment generation, investment and other economic indicators. Former Finance Secretary Subhash Chandra Garg has gone further, arguing that when the latest numbers are viewed against the previous statistical framework, the underlying growth could appear much lower, around 2.6%. Congress has used these criticisms to attack the Government's economic claims. The Government and MoSPI, however, reject such comparisons, pointing out that India has introduced a new GDP series with 2022–23 as the base year, replacing 2011–12, incorporating new administrative data and methodological changes, including double deflation in manufacturing. Therefore, neither declaring 7.8% “false” nor treating it as an unquestionable measure of prosperity is justified. 

There is, however, a more fundamental problem. GDP measures production, not the distribution of prosperity. A highly automated factory can increase output without creating proportionately more jobs. Digital, financial and technology enterprises can generate enormous economic value with comparatively few employees. Thus, GDP growth and employment growth are not synonymous. An economy may expand rapidly while millions continue to struggle for secure and adequately paid work. The meaningful test of development must therefore go beyond the national output figure to examine jobs, wages, purchasing power, social security and economic dignity.

In this context, the latest Periodic Labour Force Survey (PLFS) Annual Report 2025 is worth discussing which provides another headline and relates to the above statement of former RBI Governor. As reported, the unemployment rate for persons aged 15 years and above declined from 3.2% in 2024 to 3.1% in 2025. Youth unemployment among those aged 15–29 declined from 10.3% to 9.9%, while urban youth unemployment remained considerably higher at 13.6%. Among educated persons aged 15 years and above, unemployment stood at 6.5%. But 3.1% unemployment does not mean that only 3.1% of India's working-age population is without an adequate livelihood. The unemployment rate measures unemployed people as a proportion of the labour force. More importantly, employment itself varies enormously in quality. According to PLFS 2025, 56.2% of workers were self-employed, while regular wage or salaried workers accounted for 23.6% and casual labour 20.2%. Self-employment can represent successful entrepreneurship, but it can also mean survival through petty trade, own-account work or unpaid family activity when secure employment is unavailable. Likewise, casual employment may provide work without providing stability, adequate wages or social protection. Having work and having a decent livelihood are not necessarily the same thing.

This explains why the reality of labour migration cannot simply be ignored. Government data recorded more than 41 million interstate migrant workers in the 2011 Census, while the 2020–21 Migration Survey reported an overall migration rate of 28.9%, with employment among the important reasons for migration. Migration itself is not necessarily evidence of economic failure; workers naturally move towards better opportunities. But seasonal migration, repeated movement between villages and cities, and dependence on insecure informal employment raise a fundamental question about the geographical distribution of jobs. An economy that grows strongly should progressively create productive and dignified employment closer to where people live, rather than merely moving workers from one insecure livelihood to another.

The contradiction is particularly stark among the young. The official youth unemployment rate of 9.9% is more than three times the overall rate of 3.1%, while urban youth unemployment at 13.6% remains deeply concerning. Behind these statistics are graduates preparing repeatedly for competitive examinations, educated young people accepting jobs below their qualifications, workers entering insecure gig activities and families sending their children to distant cities because suitable employment is unavailable locally. Therefore, the employment question cannot end with “How many are unemployed?” It must also ask: “How many are adequately employed, adequately paid and securely employed?”

The common citizen has no quarrel with GDP. He has a quarrel with hunger. The farmer wants a remunerative price for his crop. The labourer wants work tomorrow. The graduate wants a job matching his education. The migrant worker wants to earn without being separated from his family. The small trader wants customers. The salaried worker wants wages capable of keeping pace with the cost of living. The mother wants enough money for food, education and healthcare. None of them can consume a percentage point of GDP. They need income, employment and dignity. Their inability to feel the benefits of headline economic growth cannot simply be dismissed as a failure to understand statistics. It is a legitimate question about the distribution and quality of growth. India therefore needs to move beyond the sterile political argument of 7.8% versus 2.6%. GDP must be read alongside employment, wages, household consumption, inequality, migration and social security. Employment statistics, too, must increasingly distinguish between mere participation in economic activity and secure, productive and adequately remunerated work.

The ultimate test of an economy is not how high its statistical graph climbs, but how many empty plates disappear from the table. If GDP rises while young people remain desperate for jobs, workers migrate because local livelihoods are inadequate, and millions survive through insecure and poorly paid work, India must ask three uncomfortable questions: Growth for whom? Employment of what quality? Development for whose dignity? Statistics can describe an economy. Only livelihoods can prove that the economy is truly working.

(The author is a Service Union Representative and a Columnist.)