Disappointing Economic Data Raises Concerns Ahead of Union Budget

New Delhi. The Congress Party has expressed concern over the Central Government’s revised GDP growth projections for the current fiscal year, terming them disappointing. The party stated that the continuous flow of discouraging economic indicators creates a troubling backdrop for the upcoming Union Budget.

Jairam Ramesh, Congress General Secretary (Communications) and Member of Parliament, said in a statement on Wednesday that the latest figures project GDP growth for FY2025 at just 6.4%, the lowest in four years. This marks a significant decline compared to the 8.2% growth recorded in FY2024 and is even lower than the Reserve Bank of India’s recent projection of 6.6%, which itself was revised down from 7.2%.

“The Indian economy has slipped to a lower level within a matter of weeks. The manufacturing sector, which plays a crucial role, is not growing as it should. The government can no longer deny the reality of declining growth and its various facets,” Ramesh remarked.

Key Concerns: Consumption and Investment Decline

Ramesh pointed out that over the past decade, the country’s consumption story has taken a reverse swing, emerging as a significant challenge for the Indian economy.

Private Final Consumption Expenditure (PFCE) growth slowed to 6% in the second quarter of this year, down from 7.4% in the previous quarter.
Car sales have hit a four-year low, further reflecting weak consumer demand.
Additionally, gross fixed capital formation (both public and private investment) is expected to grow by only 6.4% this year, compared to 9% in the previous year. “This data underscores the reluctance of the private sector to invest in India,” Ramesh noted.

Government’s Promises vs. Reality

He criticized the government for failing to meet its capital expenditure goals, despite making grand promises in the FY2025 Union Budget with an allocation of ₹11.11 lakh crore for capital investments.

By November, only ₹5.13 lakh crore had been spent, a 12% decline compared to the previous year.
Most projections suggest the government will fall short of its spending targets by the end of the fiscal year.
Household Savings and Debt Crisis
The Congress leader also highlighted a sharp decline in household financial savings, which dropped by ₹9 lakh crore between 2020-2021 and 2022-2023, according to government data. Meanwhile, household financial liabilities now stand at 6.4% of GDP, the highest in decades.

Recommendations for the Upcoming Budget

Ramesh urged the government to prioritize income support for the poor, higher wages for MNREGA, and an increased MSP for farmers. Additionally, he emphasized the need for:

Simplification of the complex GST regime.
Income tax relief for the middle class.
“This gloomy backdrop demands urgent attention and corrective measures in the upcoming Union Budget for FY2025-26,” he concluded.