Content:
- Battle for growth
- India’s burden of rising obesity, the hefty cost to pay
- Australia, the partner for India’s growth trajectory
Battle for Growth
Context : Economic Growth Trends and Challenges
- Q3FY25 GDP Growth:
- India registered a 6.2% real GDP growth rate, improving from the revised 5.6% (5.4%) in the previous quarter.
- This marks the slowest growth since Q4FY23, apart from the last quarter.
- Full-year Growth Target:
- The government’s 6.5% GDP growth target appears unattainable due to global headwinds and domestic sectoral slowdowns.
- External risks include tariff-induced imported inflation and tepid performance in manufacturing and services.
Relevance : GS 3(Indian Economy )
Practice Question :”While government spending and private consumption have provided a boost to economic growth, structural weaknesses in manufacturing and services sectors pose challenges to sustained growth.” Analyze in the context of India’s economic performance in FY25. (250 words)
Sector-wise Performance
- Primary Sector (Agriculture, Mining, etc.):
- Strong growth at 5.2% (up from 1.8% in the same quarter last year).
- Played a crucial role in driving Q3FY25 growth.
- Secondary Sector (Manufacturing & Industry):
- Slowed to 4.8%, a sharp decline from 12.4% last year.
- Manufacturing remains vulnerable to global trade uncertainties, including U.S. import tariffs (25% on steel, pharmaceuticals).
- Pharma exports to the U.S. account for 31% ($8.7 billion) of total exports, making this a significant risk.
- Some Indian pharma firms are considering shifting production to the U.S., posing a potential trade revenue loss for India.
- Tertiary Sector (Services):
- Growth slowed to 7.4%, compared to 8.3% last year.
- Services sector, particularly IT and business outsourcing, remains sensitive to global demand fluctuations.
Government & Private Consumption as Growth Drivers
- Government Spending:
- Increased by 8.3%, significantly up from 2.3% in the previous quarter.
- Fiscal spending has provided a major boost to economic activity.
- Private Consumption Expenditure:
- Grew by 6.9% (compared to 5.7% last quarter), driven by moderation in inflation.
- Large-scale events like Maha Kumbh could further propel short-term demand in Q4FY25.
Inflation Trends and RBI’s Outlook
- Current Inflation Levels:
- The RBI projects FY25 inflation at 4.8%, expected to decline to 4.2% in FY26.
- This aligns with the RBI’s medium-term target of 4%, indicating a more stable price environment.
- Uncertainty in Inflation Data:
- NSO’s revised methodology has raised concerns about data accuracy and consistency.
- The agency claims its estimates are based on detailed sectoral revisions but has not clearly explained the nature or impact of changes.
- Lack of transparency could affect confidence in economic indicators and policy planning.
Key Risks & Uncertainties
- Global Trade Tensions:
- The U.S.’s 25% import tariffs on key sectors like steel and pharmaceuticals could disrupt Indian exports.
- Possible relocation of Indian pharma manufacturing to the U.S. could lead to a domestic production slowdown.
- Structural Weakness in Manufacturing & Services:
- Slowdown in these sectors signals a need for stronger policy interventions (e.g., PLI schemes, trade diversification).
- Data Reliability Issues:
- NSO’s lack of transparency in GDP calculation methodology raises doubts about future estimates.
- Calls for clarity in statistical revisions to maintain credibility.
India’s Burden of Rising Obesity, the Hefty Cost to Pay
Current Scenario of Obesity in India
- Epidemiological Transition: Rising overweight and obesity levels over the last two decades.
- NFHS-5 (2019-21): Nearly 1 in 4 men or women in India are obese.
- State-Wise Variation: Overweight and obesity range from 8% to 50% across states and demographics.
- Childhood Obesity: One of the fastest-growing concerns globally, as per the World Obesity Federation.
- Rising Trend: Adult obesity has doubled in 15 years and tripled in 30 years.
- ICMR Study (2023, The Lancet):
- 35 crore adults (over 20 years) have abdominal obesity.
- 25 crore adults have general obesity.
- 21 crore adults have high blood cholesterol.
Relevance : GS 2(Health , Governance)
Practice Question: ”Rising obesity in India is not just a public health concern but an economic burden as well.” Discuss the underlying causes, consequences, and policy measures required to tackle this challenge. (250 words)
Why the Issue Needs Urgent Attention
- Societal Normalization: Obesity is often seen as a personal issue rather than a public health concern.
- Dietary Challenges: Despite calorie sufficiency, 55% (78 crore people) cannot afford a healthy diet.
- Nutritional Deficiency: 40% of people lack an adequate nutrient-rich diet.
- Food Availability Shift: Increase in high fat, salt, sugar (HFSS) and ultra-processed food (UPF).
- Lifestyle Factors: Urbanization has led to sedentary habits; 50% of Indians fail to meet WHO’s recommended physical activity levels.
- Health Risks:
- “Thin Fat Indian” hypothesis – Indians with normal BMI still have high body fat.
- Obesity is a major risk factor for diabetes, hypertension, and liver disorders.
- 1 in 4 Indian adults (25 crore) is diabetic or prediabetic.
- Economic Impact:
- Global Obesity Observatory (2019): ₹1,800 per capita (1.02% of GDP).
- Projected Cost (2030): ₹4,700 per capita (1.57% of GDP).
- Costs linked to healthcare expenses and productivity loss.
Policy and Programmatic Solutions
- Public Awareness & Screening: Recognize obesity as a disease, integrate routine BMI and waist circumference checks in healthcare, and educate on ideal weight parameters.
- Active Lifestyles & Infrastructure: Improve urban planning with cycle lanes, parks, and open gyms; ensure free access to fitness facilities.
- Food Regulation & Industry Accountability: Tax HFSS & UPF products, subsidize healthier foods, promote ethical marketing, and encourage CSR funding for healthy lifestyle initiatives.
- Education & Workplace Interventions: Include nutrition education in schools, regulate canteen menus, adopt Japan’s dietitian model, and implement regular body fat analysis at workplaces.
- Policy & Research Strengthening: Multi-ministerial coordination under Suposhan Abhiyan, capacity-building of healthcare providers, and data-driven obesity management through epidemiological studies.
Australia, the Partner for India’s Growth Trajectory
Strategic Complementarity: Australia sees itself as a natural partner in India’s economic growth due to complementary economies—Australia supplies critical resources, while India offers a large skilled workforce and market potential.
Relevance : GS 2(International Relations)
Practice Question :Discuss the significance of the India-Australia economic partnership in the context of global trade realignments. Highlight the key sectors of cooperation and the challenges that need to be addressed. (250 words)
- Trade Growth & Free Trade Agreement Impact:
- India’s exports to Australia have grown 66% in five years, nearly double the growth rate of its global exports.
- The Economic Cooperation and Trade Agreement (ECTA) has fueled stronger trade ties, demonstrating the benefits of economic liberalization.
- The New Roadmap & Key Sectors:
- Focuses on four “superhighways of growth”: clean energy, education & skills, agribusiness, and tourism.
- Identifies seven additional economic corridors: investment, technology, sports, culture, resources, defence, space, and health.
- Support for India’s Energy & Manufacturing Needs:
- Australia provides critical minerals for India’s EV revolution, holding major reserves of lithium, nickel, and cobalt.
- Strengthening energy partnerships to meet India’s growing power demands.
- Education & Skill Development:
- Australia recognizes India’s need to skill 2 crore people annually and has responded by setting up foreign university campuses in India.
- Australian universities are positioning themselves as key partners in India’s higher education landscape.
- Indian Diaspora as a Growth Bridge:
- The 10-lakh-strong Indian diaspora in Australia plays a key role in deepening ties and fostering business opportunities.
- Investments in programs like the Maitri grants further strengthen these links.
- Path Forward:
- Comprehensive Economic Cooperation Agreement (CECA) is the next step to deepen economic integration.
- Australia’s long-term commitment to India’s growth signals a shift towards a more robust and diversified bilateral partnership.
The Australia-India partnership is evolving beyond trade into strategic collaboration across sectors, driven by shared economic interests and people-to-people ties.
