Context:

• As Prime Minister Narendra Modi completes 11 years in office, this article undertakes a macroeconomic stocktaking.
• It compares the performance with the previous decade (2004–2014), and outlines key achievements, gaps in inclusivity, and policy imperatives for the future, especially in agriculture and subsidies.

Macroeconomic Growth Trajectory:

• GDP growth – Nominal and PPP:
  • In 2014, India’s nominal GDP was $2.04 trillion, rising from $709 billion in 2004 under UPA.
  • In 2025, GDP is projected at $4.19 trillion, nearing Germany to become the 4th largest economy.
  • In purchasing power parity (PPP terms), GDP grew from $2.75 trillion (2004) to $6.45 trillion (2014) to $17.65 trillion (2025) becoming the 3rd largest globally [behind China ($40.72 trillion) and the US ($30.51 trillion)].
• Per capita income – PPP indicator:
  • Per capita income (PPP): Rose from $2,424.2 in 2004 to $4,935.5 in 2014 and now stands at $12,131.8 in 2025.
  • Global rank improved:
    • If we compare India’s per capita income (PPP) globally, its rank improved from 181st in 2004, to 166th in 2014, and 149th in 2025.
    • Still lowest in G20, behind China ($28,978), Sri Lanka, and Bhutan, but ahead of Pakistan and Bangladesh. 

Inclusivity and Income Inequality:

• The Gini coefficient, which is a statistical measure used to quantify the degree of inequality in the distribution of income or wealth within a population, has shown only modest shifts over the past two decades.
• It ranges from 0 to 1 (or 0% to 100%), where 0 represents perfect equality (everyone has the same income/wealth) and 1 (or 100%) represents perfect inequality (one person has all the income/wealth).
• In 2004, it was 0.34 in India, in 2014 it edged up slightly to 0.35 and dropped to 0.33 in 2021, indicating moderate inequality in India, according to the World Bank.

Agricultural Growth and Welfare Measures:

• Agricultural performance: Agriculture GDP grew at an average annual rate of 4% (FY15–FY25) despite consecutive droughts in 2014–15 and 2015–16, surpassing the 3.5% (FY05–FY14) growth, which also witnessed a major drought in 2009–10.
• Key welfare initiatives:
  • PM-KISAN (direct income support)
  • Almost-free staple grains (rice or wheat, 5kg/person/month) to 800 million
  • Subsidised rural housing
  • Near freeze on urea prices

Poverty Reduction Milestone:

• All these efforts have led to a sharp reduction in extreme poverty (head count ratio) at $3 per day (2021 PPP) - from 27.1% in 2011 to just 5.3% in 2022.
• The 80% drop marks one of the fastest and most significant falls in poverty that India has achieved in any period since 1977.
• Even when measured against the higher poverty line threshold of $4.20/day for low middle-income countries, poverty had dropped from 57.7% in 2011 to 23.9% by 2022, representing a steep 60% decline in just a decade.

Reforming Subsidies for Sustainable Inclusion:

• Food subsidy reform:
  • The food subsidy budget for FY26 is slated to be Rs 2.03 lakh crore. Almost-free food to 800 million people despite low poverty levels.
  • Rationalise this food subsidy by giving beneficiaries food coupons (digital wallet) to buy nutritious food — pulses, milk, eggs — from designated stores.
  • The value of food coupons for the bottom, say 15% of the population, could be Rs 700/family/month.
  • This will help plug leakages, diversify diets, promote nutrition, and diversify the production basket.
• Fertiliser subsidy reform:
  • Similar rationalisation is needed for fertiliser subsidy, which is slated to claim another Rs 1.56 lakh crore in FY26.
  • This can be done by giving fertiliser coupons to farmers and deregulating the prices of fertiliser products.
  • Farmers can use these coupons to buy chemical fertilisers or bio-fertilisers or do natural farming.
  • The imbalanced use of N, P, and K can be corrected, leakages plugged and innovations in products and practices promoted, only if the government deregulates this sector.

Challenges Ahead:

• The government would need to identify tenant farmers.
• The task also requires triangulation of several sets of data.
• Communicating with farmers in advance and earning their trust. This is a political exercise, which must precede policy change.

Conclusion:

• The current government’s 11-year record shows strong macroeconomic performance, remarkable poverty reduction, and improved welfare delivery.
• However, challenges of inclusivity, sustainable subsidy structures, and agri-sector reform remain critical.
• Tackling these with targeted, tech-enabled, and politically communicative solutions can transform economic gains into equitable development.