India’s economic growth is steady, but is it truly sustainable? The latest GDPestimates for 2024-25, at 6.5%, indicate resilience, but they also highlight a deeper problem—growth today is driven more by public investment than private demand. Without stronger household consumption and a revival of the small business sector, India’s economic expansion will remain fragile and imbalanced, says former chief statistician Pronab Sen.For years, policymakers have focused on supply-side interventions, incentivising investment through production-linked incentives, infrastructure expansion, and easier credit conditions. While these policies have supported overall growth, they have failed to unlock the true driver of a thriving economy: domestic consumption. Private Final Consumption Expenditure is estimated to grow 7.6% in 2024-25, an improvement from 5.6% the previous year, but still short of pre-pandemic levels.
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