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Trump’s Greenland Comments Shift Focus at World Economic Forum

by theparliamentnews.com 21 January 2026

written by theparliamentnews.com

Trump Revives Greenland Proposal at Davos, Draws Firm European Response
Article

Davos, Switzerland | January 21, 2026:
US President Donald Trump reignited controversy at the World Economic Forum (WEF) 2026 after reiterating his view that the United States should gain control of Greenland, prompting strong responses from European leaders and adding to existing transatlantic tensions.

Speaking during his address at Davos, Trump said the United States would not use force to acquire the Arctic territory but maintained that Greenland was strategically important for US national security and global influence in the Arctic. Greenland is an autonomous territory within the Kingdom of Denmark.

Trump’s remarks were closely watched by world leaders attending the summit, which is traditionally focused on global economic cooperation, trade, and climate policy.

European Leaders Reject Proposal

European officials responded firmly, reiterating that decisions regarding Greenland’s future rest with Denmark and the people of Greenland.

UK Prime Minister Sir Keir Starmer said Britain would not compromise on issues of sovereignty, emphasising respect for international law and self-determination. European Commission President Ursula von der Leyen called for greater European strategic autonomy, particularly in light of rising geopolitical pressure and potential trade measures.

The comments underscored growing diplomatic strains between the United States and its European allies.

Tariff Threats Add to Tensions

Alongside his Greenland remarks, Trump again raised the prospect of imposing 10 per cent tariffs on imports from European countries opposing US plans, with the rate potentially rising to 25 per cent if negotiations do not progress.

The tariff threat has raised concerns among European trade officials, though UK Finance Minister Rachel Reeves said existing economic arrangements between London and Washington were expected to remain stable despite political differences.

Calls for Dialogue

Amid the escalating rhetoric, US House Speaker Mike Johnson, addressing lawmakers in the UK Parliament, urged restraint and dialogue, calling for continued cooperation between the United States and its allies.

Broader Implications

Trump’s remarks shifted attention at Davos from economic collaboration to geopolitical divisions, raising questions about the future of:

NATO unity

Transatlantic trade relations

Arctic governance and sovereignty

Greenland’s strategic location, mineral resources, and role in emerging Arctic shipping routes have increasingly placed it at the centre of global geopolitical discussions.

World leaders are now watching closely to see whether the dispute moves toward negotiation or further diplomatic escalation.

Short Summary

Trump’s remarks were closely watched by world leaders attending the summit, which is traditionally focused on global economic cooperation, trade, and climate policy.

European Leaders Reject Proposal

European officials responded firmly, reiterating that decisions regarding Greenland’s future rest with Denmark and the people of Greenland.

The comments underscored growing diplomatic strains between the United States and its European allies.

Tariff Threats Add to Tensions

Calls for Dialogue

Broader Implications

Trump’s remarks shifted attention at Davos from economic collaboration to geopolitical divisions, raising questions about the future of:

NATO unity

Transatlantic trade relations

Arctic governance and sovereignty

Greenland’s strategic location, mineral resources, and role in emerging Arctic shipping routes have increasingly placed it at the centre of global geopolitical discussions.

World leaders are now watching closely to see whether the dispute moves toward negotiation or further diplomatic escalation.

Short Summary

US President Donald Trump renewed calls for US control of Greenland during his Davos address, prompting firm pushback from European leaders. The remarks, combined with renewed tariff threats, have heightened diplomatic tensions between the United States and its European allies.Davos, Switzerland | January 21, 2026:
US President Donald Trump reignited controversy at the World Economic Forum (WEF) 2026 after reiterating his view that the United States should gain control of Greenland, prompting strong responses from European leaders and adding to existing transatlantic tensions.

Trump’s remarks were closely watched by world leaders attending the summit, which is traditionally focused on global economic cooperation, trade, and climate policy.

European Leaders Reject Proposal

European officials responded firmly, reiterating that decisions regarding Greenland’s future rest with Denmark and the people of Greenland.

The comments underscored growing diplomatic strains between the United States and its European allies.

Tariff Threats Add to Tensions

Calls for Dialogue

Broader Implications

Trump’s remarks shifted attention at Davos from economic collaboration to geopolitical divisions, raising questions about the future of:

NATO unity

Transatlantic trade relations

Arctic governance and sovereignty

Greenland’s strategic location, mineral resources, and role in emerging Arctic shipping routes have increasingly placed it at the centre of global geopolitical discussions.

World leaders are now watching closely to see whether the dispute moves toward negotiation or further diplomatic escalation.

Short Summary

21 January 2026 0 comment

Blog Business Education & Tech

Tariffs Act Like a Tax on US Households, Research Finds

by theparliamentnews.com 20 January 2026

written by theparliamentnews.com

Article

US President Donald Trump has once again defended the use of tariffs as a central economic policy tool, arguing that import duties help the government raise revenue, protect domestic industries, and encourage consumers to buy American-made products. However, economic data and independent studies suggest that the burden of tariffs largely falls on US consumers and businesses, rather than foreign exporters.

The latest dispute follows Trump’s warning that the United States will impose 10 per cent tariffs from February 1, rising to 25 per cent by June 1, on imports from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland, unless these countries support his proposal for the US to acquire Greenland. The tariffs would remain in place until what Trump described as a “complete and total purchase” is agreed upon.

Trump has justified the move by calling Greenland “vital to US national security” and citing concerns over European activity in the Arctic region.

Trump’s Case for Tariffs

Trump has consistently argued that tariffs:

increase government revenue,

reduce the US trade deficit,

push consumers toward domestically manufactured goods, and

encourage companies to invest and produce within the United States.

He has framed trade deficits as evidence that the US is being economically disadvantaged by foreign countries and has repeatedly claimed that tariffs can restore manufacturing jobs and industrial capacity.

Rising Costs for Consumers

Evidence from recent years suggests that tariffs tend to raise prices for American consumers. According to the BBC, US inflation rose to 3 per cent in the year ending September, up from 2.4 per cent in April, before easing to 2.7 per cent in November and December.

Several major retailers, including Target, Walmart, and Adidas, have indicated that higher import costs resulting from tariffs are passed on to consumers through price increases.

Industries that rely on global supply chains are particularly affected. In the automobile sector, parts frequently cross US, Mexican, and Canadian borders multiple times during production, meaning tariffs increase costs at several stages of manufacturing.

Who Really Pays?

A study by the Kiel Institute for the World Economy found that around 96 per cent of tariff costs are borne by US buyers, including households and businesses, while only about 4 per cent is absorbed by foreign exporters through lower prices. This makes tariffs function similarly to a consumption tax.

Earlier analyses by institutions such as Goldman Sachs showed that while US firms initially absorbed some tariff costs, these expenses were increasingly passed on to consumers over time.

Various estimates suggest that tariffs have acted like a tax increase of roughly $1,100–$1,500 per household per year, with a US Congressional report estimating the 2025 cost at around $1,200 per family.

Impact on Trade and Jobs

Trump has claimed that tariffs would reduce the US trade deficit. However, during the earlier trade war, the US trade deficit with China widened from about $375 billion in 2017 to $419 billion in 2018, before declining modestly in 2019. Economists note that tariffs often redirect trade flows rather than reducing overall deficits.

Employment data also shows limited benefits. While some protected sectors such as steel and aluminium saw modest job gains, overall manufacturing job growth remained weak. In several industries, higher input costs led to job losses instead of gains.

Research from the Federal Reserve and the International Monetary Fund indicates that tariffs weighed on GDP growth and investment. Estimates cited by The Independent suggest the trade war reduced US economic output by $40–$60 billion annually.

A Mixed Economic Record

While tariffs have provided targeted protection for certain industries, broader data suggests they have increased costs for consumers, strained supply chains, and delivered limited gains in employment and trade balances. Economists widely agree that tariffs alone are unlikely to achieve long-term economic objectives without broader structural reforms.

Short Summary

Donald Trump argues that tariffs boost US revenue, protect domestic industries, and reduce trade deficits. However, studies show that most tariff costs are passed on to American consumers, raising prices, increasing household expenses, and delivering limited gains in manufacturing jobs or trade balances.

20 January 2026 0 comment

Blog Featured World

Iran Protests Spread Nationwide as Economy Pushes Public to the Brink

by theparliamentnews.com 10 January 2026

written by theparliamentnews.com

Iran has entered a period of deep unrest, with protests stretching across the country for nearly two weeks and posing the most serious challenge to the ruling establishment in years. What began as economic frustration has grown into a broader expression of public anger, cutting across cities, campuses, and social groups.

Demonstrations have now been reported in roughly 180 cities across all provinces, signalling a level of geographic spread rarely seen in recent years. Protesters have taken to streets, universities, and marketplaces, voicing grievances that go far beyond prices and wages.

Economic Pressure at the Heart of the Protests

The initial spark came from Iran’s worsening economic conditions. Inflation has surged, the national currency has sharply weakened, and basic goods have become unaffordable for many households. Shopkeepers in Tehran were among the first to strike, an unusual development given their traditional alignment with the political establishment.

As the protests gained momentum, the focus widened. Demonstrators began targeting governance failures, corruption, and long-standing political restrictions, transforming an economic protest into a national political moment.

Government Response and Escalating Tensions

Iranian authorities have responded with a heavy security presence. Thousands have reportedly been detained, including minors, and dozens of deaths have been recorded amid clashes between protesters and security forces. Officials have acknowledged injuries among police and paramilitary personnel.

A nationwide internet shutdown has further heightened tensions, cutting off communication channels used by protesters and journalists. Even satellite-based services, which had previously provided limited connectivity, appear to have been disrupted.

Trump’s Warnings Add an International Dimension

US President Donald Trump has publicly warned Iranian authorities against using lethal force, stating that the United States would respond strongly if protesters were killed. While ruling out ground intervention, he has suggested punitive measures that would target Iran’s vulnerabilities.

Trump’s remarks follow a period of increasingly assertive US foreign policy actions, and his comments have injected global attention into Iran’s internal crisis. Analysts believe these statements may embolden protesters while simultaneously restraining the government’s response.

Tehran Pushes Back, Blames External Forces

Iran’s leadership has rejected accusations of repression, instead blaming foreign interference for the unrest. Supreme Leader Ayatollah Ali Khamenei accused outside powers of exploiting economic grievances to destabilise the country, while officials have condemned US statements as provocative.

At the same time, the government has attempted limited outreach, acknowledging economic hardship and offering modest financial relief. Critics argue these steps fall far short of addressing structural economic failures.

Iran has experienced waves of mass protests before, most notably in 2009, 2019, and 2022. However, observers note a key difference this time: the protests are rooted in economic survival rather than a single social or political trigger.

The unrest has reached smaller cities that historically remained quiet, suggesting a deeper level of desperation. Analysts warn that economic-driven movements are harder to defuse, as there are fewer immediate concessions the government can realistically offer.

Iran’s exiled Crown Prince Reza Pahlavi has publicly encouraged protesters to maintain discipline and scale, calling for coordinated nationwide actions. His involvement has drawn mixed reactions but has undeniably added momentum to the movement.

Whether the protests can sustain themselves remains uncertain. Much will depend on the response of security forces, the resilience of protesters, and the regime’s ability to manage a crisis rooted in economic collapse rather than ideology.

10 January 2026 0 comment

Blog Business Featured

Rupee Weakens for Fourth Day as Dollar Strength Persists

by theparliamentnews.com 5 January 2026

written by theparliamentnews.com

The Indian rupee continued its downward trend on Monday, marking its fourth consecutive session of losses as global risk sentiment deteriorated. The domestic currency closed 8 paise weaker at 90.28 against the US dollar, reflecting sustained demand for the greenback amid heightened geopolitical uncertainty and cautious domestic markets.

Although falling crude oil prices offered some relief, it was not enough to offset the impact of a firm US dollar and subdued investor confidence.

Intraday Movement Highlights Persistent Pressure

In the interbank foreign exchange market, the rupee opened slightly firmer at 90.21 but came under pressure as the session progressed. It touched an intraday low of 90.50 before recovering marginally to settle at 90.28 on a provisional basis.

Since December 30, 2025, when the rupee closed at 89.75, the currency has weakened by 53 paise. Recent sessions have seen consistent pressure, with losses recorded on each trading day heading into the new year.

Geopolitical Developments Drive Dollar Demand

Forex market participants pointed to renewed geopolitical tensions following US military action in Venezuela as a key factor behind the rupee’s weakness. The escalation prompted investors to seek safety in the US dollar, strengthening it against most global currencies.

The dollar index, which measures the greenback against a basket of major currencies, rose by 0.24 percent to trade near 98.39, underscoring the broader safe-haven demand.

Crude Oil Decline Offers Limited Support

A notable counterbalance came from the energy markets, where Brent crude prices declined modestly to around USD 60.53 per barrel. Lower oil prices typically support the rupee by easing India’s import bill, but in the current environment, global risk aversion overshadowed this positive factor.

Market experts noted that continued softness in crude prices could help limit further downside for the currency in the near term.

RBI Reserves and Possible Intervention in Focus

Analysts also highlighted the role of India’s strong foreign exchange reserves, which rose by over USD 3.2 billion to USD 696.61 billion in the latest reporting week. The robust reserve position provides the Reserve Bank of India with ample room to intervene if volatility intensifies.

According to market expectations, any central bank action, combined with softer crude prices, may help stabilise the rupee around current levels.

Equity Markets Add to Cautious Tone

Domestic equity markets mirrored the cautious mood. The Sensex declined over 320 points to close at 85,439.62, while the Nifty slipped below recent highs to end at 26,250.30. Weak equities often add pressure on the currency by dampening foreign inflows, though foreign institutional investors were marginal net buyers in the previous session.

Near-Term Outlook for the Rupee

Looking ahead, currency traders are expected to closely monitor global macroeconomic cues, including US manufacturing data and further geopolitical developments. The USD-INR pair is likely to trade within a broad range of 90.00 to 90.60 in the near term, with volatility driven largely by external factors.

5 January 2026 0 comment

Blog Featured India

India’s Q2 GDP Surge Marks a Powerful Economic Upswing

by theparliamentnews.com 29 November 2025

written by theparliamentnews.com

India’s economy delivered an impressive performance in the July–September quarter of FY2025-26, registering 8.2 percent real GDP growth, the fastest pace in a year and a half. This sharp acceleration from the 5.6 percent expansion in the same quarter last year highlights India’s solid footing as the world’s fastest-growing major economy. The first half of the fiscal year has now averaged 8 percent growth, reinforcing a broad-based domestic revival.

Nominal GDP increased by 8.7 percent, only slightly above real growth. This narrow gap indicates subdued inflation, which has helped support real household purchasing power. However, the softer inflation reading may also constrain government revenue, as nominal income forms the base for tax collections.

Manufacturing, Services, and Construction Drive the Upswing

One of the standout features of this quarter’s performance is the resurgence in manufacturing. The sector grew by 9.1 percent, reflecting upticks in industrial output, stronger demand for goods, and healthy corporate profitability. Many industries have reported better capacity utilization and a more favourable input-cost environment, adding momentum to the sector.

Construction also showed solid expansion at 7.2 percent, supported by government-led infrastructure projects and continued capital expenditure. From road networks to public transport corridors, large-scale projects have helped maintain steady activity across the sector.

The services sector remains the backbone of the economy, clocking 9.2 percent growth. Financial, real estate, and professional services were particularly strong, recording over 10 percent expansion. This reflects increased financial activity, improving urban sentiment, and stronger corporate service demand. Agriculture, however, grew at a more modest pace of 3.5 percent, partly due to uneven monsoon patterns.

Consumption and Investment Point to Strong Domestic Demand

On the demand side, household spending picked up, with private final consumption expenditure rising 7.9 percent. Urban consumption remained particularly strong, supported by higher incomes, stable prices, and improving employment conditions.

Investment activity held firm as well. Gross fixed capital formation grew 7.3 percent, driven by public infrastructure push and a gradual pickup in private investment. Higher investment levels suggest rising confidence among businesses, especially in manufacturing and construction-linked industries.

Together, strong consumption and steady investments underline a domestic-led growth pattern, reducing dependence on external demand.

Net Exports Remain a Drag

Despite strong domestic indicators, the external sector continues to weigh on growth. Weak global demand and volatile geopolitical conditions have limited export momentum. The trade deficit, driven by softer goods exports and sticky imports, reduced the net contribution of external trade to overall GDP performance.

Economists also point out that a low GDP deflator played a role in boosting real growth. As inflation normalizes in the coming quarters, this supportive effect may taper off, and nominal GDP growth will need to pick up to ensure strong fiscal outcomes.

Government Perspective and Economic Outlook

Government officials credit structural reforms, productivity improvements, and eased business regulations for this robust performance. Analysts agree that the recovery is broad-based, but they highlight several conditions for sustaining momentum.

Key factors to watch include:

stability in global economic conditions
revival in goods exports
continued public and private capital expenditure
strengthening rural consumption
moderate inflation trends

If these drivers remain favourable, many forecasts expect India’s full-year FY26 growth to exceed 7 percent.

A Promising Quarter, but Challenges Remain

India’s 8.2 percent GDP growth reflects a balanced and healthy expansion across manufacturing, services, consumption, and investment. While the outlook remains optimistic, sustaining this pace will depend on maintaining domestic demand, improving export competitiveness, and navigating global uncertainties.

The next few quarters will determine whether India’s strong momentum solidifies into a long-term growth trajectory.

29 November 2025 0 comment

Blog Business Featured India

India Announces Major Credit Guarantee Boost for Exporters in FY26

by theparliamentnews.com 14 November 2025

written by theparliamentnews.com

India is preparing a fresh wave of support for its export sector with a substantial budget commitment aimed at improving credit access and cushioning financial risks for exporters. According to a senior government source, the credit guarantee component alone will require 20 billion rupees (USD 227.5 million) in the upcoming fiscal year 2026.

This allocation is part of a broader export-linked support package cleared by the Union Cabinet on Wednesday, signalling a renewed push to strengthen India’s global trade competitiveness.

A Closer Look at the FY26 Credit Guarantee Allocation

As global trade conditions remain unpredictable, credit guarantees play a crucial role in helping exporters secure loans from banks with reduced risk. The government’s planned FY26 budget—dedicated exclusively to this guarantee mechanism—is designed to stabilise financing channels for small, medium, and large exporters alike.

The 20-billion-rupee allocation reflects an intent to make bank lending more secure, ensuring exporters can manage production demands, meet delivery timelines, and navigate global market fluctuations without being hindered by credit constraints.

Cabinet Clears Major Support Package for Exporters

The government’s export support strategy goes far beyond credit guarantees. On Wednesday, the cabinet approved a 450.6-billion-rupee spending plan dedicated to strengthening exporters’ resilience and boosting India’s trade performance.

A key feature of this package includes:

200 billion rupees earmarked specifically for credit guarantees on bank loans.
Additional financial support and schemes designed to lower operational stress on exporters.

This multi-layered support framework aims to unlock easier access to working capital, especially for sectors often exposed to international volatility.

Why This Matters for India’s Trade Ecosystem

Exporters form a crucial pillar of India’s economic foundation. Reliable credit access not only supports producers but also bolsters employment, manufacturing output, and foreign exchange earnings.

The announcement arrives at a time when:

Several export-driven industries are navigating tighter global demand cycles.
Banks remain cautious about lending due to global uncertainties.
Policymakers are keen on expanding India’s footprint in competitive global markets.

By strengthening its credit guarantee architecture, India is signalling that exporters will have the institutional backing required to stay competitive and agile.

What to Expect in FY26

The FY26 allocation underscores the government’s long-term strategy to support exporters through a structured financial safety net. With both direct and indirect incentives now in place, exporters can anticipate:

Higher confidence from banks during loan evaluations.
More predictable access to working capital.
Lower financial risk in scaling operations.

As the global supply chain continues evolving, this initiative could play a significant role in keeping Indian exporters on firm ground.

14 November 2025 0 comment

Blog Featured India

India’s unemployment rate falls to 5.2%, marking stronger rural and urban job growth.

by theparliamentnews.com 10 November 2025

written by theparliamentnews.com

India’s job market showed encouraging signs of improvement in the July–September 2025 quarter as the unemployment rate fell to 5.2% from 5.4% in the previous quarter (April–June), according to data released by the Ministry of Statistics. The figures reflect an overall strengthening in rural and urban employment, supported by agricultural activities and expanding opportunities in the services sector.

Rural Jobs See Strong Momentum from Kharif Season

The surge in rural employment during this quarter was primarily attributed to Kharif agricultural operations, which significantly boosted job creation in the countryside. The share of rural employment in agriculture rose sharply from 53.5% to 57.7%, marking a healthy seasonal uptick. This increase highlights the crucial role of agriculture in providing employment stability during key farming periods and supporting rural livelihoods.

Alongside the agricultural boost, the proportion of self-employed workers in rural areas also recorded a notable rise—moving from 60.7% in April–June to 62.8% in July–September—indicating a stronger dependence on farm-based and small-scale enterprises for income generation.

Urban Employment Records Steady Growth in the Tertiary Sector

While rural areas witnessed seasonal growth, urban employment also registered an upward trend. The tertiary sector’s share—comprising services such as trade, education, healthcare, and technology—rose modestly from 61.7% to 62%, reflecting gradual but consistent urban job creation.

Moreover, the proportion of regular wage employees in urban India improved slightly, climbing from 49.4% to 49.8%. This stability in the formal job segment points towards a steady revival of employment in industries and service-based enterprises.

Rise in Female Workforce Participation and Employment Ratios

A key highlight of the report is the increase in female participation across multiple employment indicators. The female worker-population ratio (WPR) showed improvement across both rural and urban regions, suggesting a stronger presence of women in the workforce.

Similarly, the female labour force participation rate (LFPR) rose from 33.4% in April–June to 33.7% in July–September, marking continued progress in gender inclusion within the job market. Analysts view this rise as a reflection of growing economic opportunities and changing socio-economic dynamics encouraging women to join or rejoin the workforce.

Labour Force Participation and Employment Indicators Point to a Broader Recovery

The overall Labour Force Participation Rate (LFPR)—a key indicator of the working-age population actively engaged in the job market—registered a marginal increase from 55% to 55.1% during the July–September quarter. At the same time, the Worker Population Ratio (WPR) also rose slightly from 52% to 52.2%, reinforcing the trend of gradual but steady improvement in employment conditions.

Data further showed that the upward trajectory in LFPR has been consistent for three consecutive months, reaching a five-month high of 55.3% in September 2025. This pattern suggests that both rural and urban economies are witnessing a broader recovery, driven by seasonal factors, urban resilience, and a gradual normalization of labour demand.

Signs of Sustained Economic Stability

Economists interpret these figures as a sign of underlying economic stability and resilience in the face of fluctuating global conditions. The simultaneous rise in agricultural employment, self-employment, and formal job creation in urban sectors points to a balanced growth pattern across India’s diverse labour market.

However, experts caution that sustaining this momentum will require continued policy focus on job diversification, skilling initiatives, and female workforce integration to maintain inclusive growth.

10 November 2025 0 comment

Blog Business Featured India

Services Sector Growth in India Touches 15-Year High in August

by theparliamentnews.com 3 September 2025

written by theparliamentnews.com

India’s Services Sector Hits Record Growth in August

India’s services sector witnessed its sharpest expansion in 15 years during August 2025, marking a remarkable phase of economic momentum. The HSBC India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, surged to 62.9 from 60.5 in July. While slightly lower than the preliminary estimate of 65.6, this reading firmly signals robust growth, far above the neutral 50.0 threshold.

Drivers of Growth: New Orders and Global Demand

The surge was largely fueled by a sharp rise in new business. Domestic demand remained strong, while international demand also picked up, with export orders climbing at the fastest pace in 14 months. This dual boost reflected India’s strengthening position in global services markets, with IT, finance, and consulting sectors leading the momentum.

Inflation Concerns Resurface

However, rapid expansion brought with it renewed price pressures. Input costs rose at the steepest pace in nine months, while service providers passed these costs on to consumers at the fastest rate since July 2012. Output price inflation has reached worrying levels, raising concerns that India’s broader inflation, which hit an eight-year low of 1.55% in July, may now reverse course.

Business Confidence on the Rise

Despite inflation challenges, optimism among service firms improved to a three-month high. Companies expressed confidence in future demand, supported by expansion plans, advertising investments, and expectations of sustained client activity. Still, hiring growth remained modest, suggesting that businesses are cautious about expanding their workforce amid rising cost pressures.

Composite PMI Highlights Broad-Based Growth

The economic surge was not limited to services alone. The Composite PMI, which accounts for both manufacturing and services activity, rose to 63.2 in August — its highest in 17 years. This indicates that India’s economic momentum is well-rounded, supported by both domestic consumption and international business opportunities.

External Risks to Watch

Amid this optimism, external risks loom large. The U.S. government’s recently imposed 50% tariff on Indian goods could dampen future growth prospects, particularly if trade tensions escalate. Balancing domestic demand with global headwinds will be critical for sustaining momentum in the coming quarters.

3 September 2025 0 comment

Blog Featured India

India’s Inequality Crisis: Why Rising GDP Masks Poverty

by theparliamentnews.com 14 June 2025

written by theparliamentnews.com

India’s economic inequality is a growing crisis beneath its glittering growth narrative. The country is frequently paraded on the world stage as a powerful, fourth-largest economy. But this view, driven by a $3.9 trillion GDP, masks a harsh reality — a vast majority of Indians suffer from deepening poverty and inequality.
This article explores the hidden side of India’s growth story, shedding light on a lopsided economic model that benefits only a small elite while ignoring the struggles of the many.

A Concentrated Model of Wealth

The official numbers tell a deceptive story.
India’s per capita income stands at $2,800, or nearly ₹2.33 lakh. But this average hides dramatic inequalities. The top 1% control over 40% of the country’s wealth. The rest — nearly 1.4 billion people — are left to share whatever remains. If we exclude this elite, the actual per capita drops to about ₹85,000 a year — roughly ₹7,000 a month.

This highlights how growth predominantly benefits the rich and powerful while ignoring the poor and vulnerable.

Rising Poverty Amid Rising GDP

The contradiction is hard to miss.
Some 80 crore people rely on free rations for their daily survival, yet the country’s leadership talks of prosperity and development. How can a growing nation be home to 35% stunted children, 230 million people in multidimensional poverty, and the lowest female workforce participation?

Such paradox signals a deep structural imbalance — the rich are getting richer, while the poor remain stranded.

Weakening Rupee Masks Failures

The weakening of the Rupee underscores the true state of India’s growth.
The exchange rate fell from about ₹60 to the dollar a few years back to nearly ₹83 today. If it drops further, India’s dollar GDP will shrink, reflecting not progress but weakness in its economic fundamentals.
The government’s silence on this issue highlights its unwillingness to confront hard truths about its own policy failures.

Rising Inequality and Policy Failures

This is not a developmental model; it’s a system of organized neglect. Some key failures include:

Rising unemployment and under-employment.
Low education and health outcomes.
Rising food insecurity and poor nutrition.
Women dropping out of the workforce at alarming rates.

Instead of addressing these issues, the policy framework focuses on pleasing the elite and ignoring the majority.

A Call for Sustainable and Equitable Change

For true growth, we need an equitable, employment-generating, and socially just path forward.
Instead of competing in shallow rankings and pleasing a small elite, policy should aim to lift all citizens — regardless of their class — into dignity, opportunity, and well-being.

Conclusion

India’s current growth story is an illusion for the many and a reality for the few. To become a great nation — not just a large one — it must pursue a path that is equitable, ecologically sustainable, and employment-generating.
The true measure of progress lies in the well-being of its people — not just its rich — and until this is addressed, the country will remain a land of deepening inequality and persistent poverty.

14 June 2025 0 comment

Blog Featured India

India to Grow at 6.3% in FY26, Says World Bank, Retaining April Forecast

by theparliamentnews.com 10 June 2025

written by theparliamentnews.com

India’s economic trajectory remains firmly on course despite global headwinds. The World Bank has reaffirmed its growth projection for India at 6.3% for FY26, reflecting confidence in the country’s economic resilience. While slightly below the previous year’s 6.5%, this forecast highlights India’s status as the world’s fastest-growing major economy.

India’s Economic Growth Outlook
The World Bank’s June 10 report maintains India’s FY26 growth forecast at 6.3%, in line with its April estimates. The projection, however, marks a marginal deceleration from the 6.5% growth seen in the previous fiscal year.

Despite this slight downgrade—0.4 percentage points lower than its January outlook—the institution remains positive about the country’s medium-term prospects. Growth is expected to rebound to 6.5% in FY27 and reach 6.7% in FY28, supported by robust services activity and improved export performance.

Exports and Global Trade Headwinds
According to the World Bank, the downgrade is largely attributable to weaker demand from key trading partners and increasing global trade barriers. These factors are likely to weigh on export volumes in the short term. Nevertheless, India’s dynamic services sector is expected to cushion the impact, maintaining upward momentum over the forecast horizon.

RBI’s Projections and Inflation Outlook
The Reserve Bank of India has echoed similar optimism, retaining its own FY26 growth forecast at 6.5%. On the inflation front, the World Bank anticipates that price levels will remain under control.

The RBI recently revised its inflation forecast for the year, lowering it to 3.7% from an earlier projection of 4%. Notably, India’s consumer inflation fell to a five-year low of 3.2% in April, offering further relief to policymakers and consumers alike.

Fiscal Health and Debt Trajectory
India’s fiscal position also appears stable. The World Bank projects continued fiscal consolidation over the coming years, driven by improved tax collections and reduced current expenditures. This is expected to support a gradual reduction in the public debt-to-GDP ratio.

Global Economic Context
Globally, the outlook is more subdued. The World Bank has reduced its 2025 global growth forecast by 0.5 percentage points to 2.3%, citing persistent trade tensions and policy uncertainty. The average decadal growth rate since 2020 is now at its lowest level since the 1960s.

The challenges are particularly pronounced in developing economies outside Asia. “Outside of Asia, the developing world is becoming a development-free zone,” noted Indermit Gill, Chief Economist at the World Bank. Growth is projected to slow in 60% of developing countries in 2025.

Conclusion:
India’s economic fundamentals remain robust amid a challenging global environment. While external factors may dampen export momentum in the near term, strong domestic demand, fiscal discipline, and controlled inflation are likely to support sustained growth. As the global economy struggles with uncertainty, India continues to stand out as a beacon of stability.

10 June 2025 0 comment

Newer Posts

Older Posts

economy

Trump’s Greenland Comments Shift Focus at World Economic Forum

Tariffs Act Like a Tax on US Households, Research Finds

Iran Protests Spread Nationwide as Economy Pushes Public to the Brink

Rupee Weakens for Fourth Day as Dollar Strength Persists

India’s Q2 GDP Surge Marks a Powerful Economic Upswing

India Announces Major Credit Guarantee Boost for Exporters in FY26

A Closer Look at the FY26 Credit Guarantee Allocation

Cabinet Clears Major Support Package for Exporters

Why This Matters for India’s Trade Ecosystem

What to Expect in FY26

India’s unemployment rate falls to 5.2%, marking stronger rural and urban job growth.

Rural Jobs See Strong Momentum from Kharif Season

Urban Employment Records Steady Growth in the Tertiary Sector

Rise in Female Workforce Participation and Employment Ratios

Labour Force Participation and Employment Indicators Point to a Broader Recovery

Signs of Sustained Economic Stability

Services Sector Growth in India Touches 15-Year High in August

India’s Services Sector Hits Record Growth in August

Drivers of Growth: New Orders and Global Demand

Inflation Concerns Resurface

Business Confidence on the Rise

Composite PMI Highlights Broad-Based Growth

External Risks to Watch

India’s Inequality Crisis: Why Rising GDP Masks Poverty

India to Grow at 6.3% in FY26, Says World Bank, Retaining April Forecast

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