India's Economic Crossroads: Confronting the Middle-Income Trap

The Congress party criticizes the Modi government's economic policies, highlighting stagnant GDP growth, rising unemployment, and inequality. As India's GDP is projected to grow at 6.4% in 2024-25, concerns about an uncompetitive economy and unaddressed inequality surface, urging policy shifts for equitable growth and job creation.

The Congress party has voiced strong criticism against the Modi government's handling of the economy, cautioning that India's GDP growth rate, expected to be 6.4% in 2024-25, indicates a looming middle-income trap that threatens competitiveness and equality. Former Finance Minister P Chidambaram, unveiling the 'Real State of the Economy 2025' report, described escalating inequality and a widening rich-poor divide as critical issues.

Highlighting factors stagnating economic progress, Chidambaram pointed to insufficient job creation and a worrying youth unemployment rate nearing 40%. He underscored the plight of daily wage workers and farmers, who face stagnant wages amidst soaring inflation in essential sectors such as food, education, and healthcare.

The Congress report criticized government spending cuts on health and education, warning that the insufficient GDP growth could hinder India's ability to capitalize on its demographic advantage. The party alleged that government policies favoring corporate interests have exacerbated economic disparities and called for an urgent reassessment of fiscal strategies to revitalize the nation's economy.

(With inputs from agencies.)