The $4 trillion false alarm: Frenzy over India's stellar GDP growth premature

During the much-anticipated cricket match that held the nation's attention most of Sunday afternoon and evening, a flurry of tweets from key figures within the Modi government claimed a significant economic milestone for India—that we had crossed the $4 trillion mark in GDP.

Among those who took to X (formerly Twitter) to post about it were union ministers G. Kishan Reddy and Gajendra Singh Shekhawat, Maharashtra’s deputy chief minister Devendra Fadnavis and businessman Gautam Adani.

Many of them have since deleted their tweets, which showed an unverified screenshot of India’s latest achievement. This unexpected proclamation ignited a wave of celebrations, amplification, discussions and scepticism in equal measure, seemingly, prompting a closer examination of the country's economic reality in the wake of the cricket fever—which died down fast overnight.

Congress leader Jairam Ramesh in a post on X said:

Contrary to the viral reports, reliable sources have confirmed that the news proclaiming India's surpassing the $4 trillion GDP milestone is inaccurate—the nation has not yet reached that economic landmark.

The widely circulated information, primarily disseminated through an unverified screenshot from a live tracking GDP feed based on International Monetary Fund (IMF) data, has been shared extensively on social media, however.

Observers said that achieving accurate live tracking of GDP figures for all countries poses a formidable challenge, given that data from various sectors of the economy is typically subject to delays before becoming available.

During the April–June period of 2023–24, India did demonstrate robust economic performance, with a notable GDP growth of 7.8 per cent. This marks the highest growth rate in the past four quarters (ie, the last year), driven by a remarkable double-digit expansion in the service sector.

India has managed to retain its position as the world's fastest-growing major economy, surpassing China's recorded growth of 6.3 per cent during the same quarter.

Anticipating continued economic momentum, a recent analysis by the PHD Chamber of Commerce and Industry in July predicted that India was poised to surpass the $ 4 trillion GDP mark in the fiscal year 2024–25, with the per capita nominal GDP expected to exceed $2,800.

In a forward-looking assessment, an August report from S&P Global suggests that India could potentially evolve into a $6.7 trillion economy by 2031, doubling its current size — but this is contingent on maintaining an average growth rate of 6.7 per cent over the next seven years.