Although India has been one of the fastest growing economies in recent years, it now faces several challenges that are slowing its momentum. Among the key factors are the decline in industrial growth, the deterioration of the stock market, and the depreciation of the rupee against the dollar. Although India has overtaken countries such as the United Kingdom in terms of GDP, its economy has failed to maintain its post-Pandemic pace.
Foreign investment has declined, partly due to the overvaluation of the Indian stock market, which has led to a loss of confidence. In addition, growth has been affected by a weak labor market, with low wages and a lack of formal employment, limiting the consumption capacity of the majority of the population. While the middle class has grown, the distribution of wealth remains unequal, which has generated discontent among the lower classes.
The Narendra Modi government has tried to boost the economy with infrastructure projects, but lack of demand and employment remains a stumbling block. Experts agree that the long-term solution to India’s economic growth requires improving workers’ incomes and generating more stable jobs, rather than focusing solely on tax cuts.
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