India’s Growth Story Has A Problem. Surjit Bhalla Says It’s Not What You Think

Bhalla said India’s GDP growth has stayed near 6-6.5 per cent for 35 years, despite investments that should have pushed it to 8.5-9 per cent.

He said political certainty in India is high, which economists typically consider a driver of growth. But meaningful policy reform is "barely happening."

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• Policy reforms are stalled, and politically sensitive freebies continue.

India's young people are being let down not by global crises, but by structural policy failures at home, economist Surjit Bhalla said in a podcast hosted by senior journalist Dibang, following ABP Network's India@2047 Conclave on Wednesday. He had a blunt message for youngsters: ask questions, even of the Prime Minister.

Buy Now Pay Later Is Not The Real Problem

The conversation opened with the Buy Now Pay Later trend popular among young consumers. Bhalla said there is nothing inherently wrong with it, as long as purchases are not being financed through freebies. "What matters is whether the person buying has productive employment and wages," he said.

He also put youth unemployment in a global context. Bhalla said youth unemployment is running at 15 to 25 per cent across countries like China, Pakistan, Bangladesh and Brazil. China, he noted, has stopped publishing that data entirely.

India's Growth Is Stuck, Says Bhalla

India's GDP growth has remained around 6 to 6.5 per cent for approximately 35 years, according to Bhalla. He argued it should be 8.5 to 9 per cent, given the country's investments in human and physical capital. "That misses the point entirely," he said about debates over the rupee and oil prices, calling these distractions from the real structural problems.

He said political certainty in India is high, which economists typically consider a driver of growth. But meaningful policy reform is "barely happening." That contradiction, he said, is deeply puzzling.

Census Delay And Data Gaps Are A Red Flag

Bhalla raised serious concerns about the government's attitude toward data. He pointed out that 138 countries have completed their census since 2011, while India has not. He said there was no justifiable reason to delay beyond 2023 and called the push to 2027 unacceptable.

On the National Family Health Survey released recently, Bhalla said five or six variables were simply missing from the data, including sex ratio at birth, a figure he has personally researched. "They say the data will be collected separately later," he said. "But that's the whole strength of a survey."

He was equally pointed about the GDP criticism. Bhalla said he tested economist Arvind Subramanian's methodology on around 85 countries and found that by that measure, Germany appeared to overstate its GDP the most, while India was average.

The Freebie Problem Nobody Wants To Fix

Bhalla called fertiliser subsidies, running since 1980, the biggest freebie in India. He also said the National Food Security Act, passed in 2013, guarantees free food to 75 per cent of rural India and 50 per cent of urban India. Neither the current government nor the previous one is willing to change it, he said, calling repeal "an electoral impossibility."

One Skill Every Young Indian Should Learn

Asked what skill every young Indian should develop, Bhalla gave a simple answer: trust the market. He said India's skill missions are built by bureaucrats who face no accountability for outcomes. "A bureaucrat decides what to build, how to build it, with no accountability," he said. His advice was to let market signals guide career choices rather than government schemes.