Understanding Economic Growth in India: How It Affects the Everyday Lives of Common People

Abstract

India has witnessed significant economic progress over the past two decades, positioning itself for sustained growth over the next 30 years. However, the key challenge remains in transforming this potential into actual economic gains. This study aims to identify the primary drivers of India's economic growth by analyzing key indicators—consumption, fixed asset investment, exports, gross domestic product (GDP), and employment—between 2000 and 2023. Using multiple regression analysis conducted with E-Views software, the results demonstrate that consumption, fixed asset investment, exports, and employment have positive and statistically significant impacts on GDP growth. The findings reveal that fixed asset investment plays a pivotal role in enhancing capital stock, while consumption drives domestic demand, contributing to GDP expansion. Exports further bolster growth through international trade, while employment improvements lead to better resource utilization.

Based on these insights, the study proposes critical policy recommendations: (i) enhancing social security systems and expanding access to credit to stimulate consumer spending; (ii) prioritizing rural development and promoting innovative industries to ensure a balanced distribution of investment across regions; (iii) optimizing export structures by encouraging technological advancements in key sectors; and (iv) improving workforce quality by aligning education with market demands and offering targeted vocational training. These measures are essential for sustaining India’s economic momentum and ensuring long-term, inclusive growth. The study’s findings provide valuable direction for policymakers seeking to address existing bottlenecks and capitalize on India’s growth potential for sustainable development.

Received: 30 August 2024 | Revised: 17 October 2024 | Accepted: 10 November 2024

Conflicts of Interest 

The author declares that he has no conflicts of interest to this work.

Data Availability Statement

Data sharing is not applicable to this article as no new data were created or analyzed in this study.

Author Contribution Statement

Jitendra Kumar Sinha: Conceptualization, Methodology, Software, Validation, Formal analysis, Investigation, Resources, Data Curation, Writing - Original Draft, Writing -Review & Editing, Visualization, Supervision, Project administration, Funding acquisition.