Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments.

Steady GDP growth alongside low inflation is conventionally read as a sign of macroeconomic health, since it combines rising output with price stability. However, headline stability can mask underlying weaknesses, so the claim that the economy is 'in good shape' deserves a qualified answer.

Arguments in support

• India was among the fastest-growing major economies, giving policy space and investor confidence.
• Inflation was contained within the flexible inflation-targeting band (4% ± 2%), protecting real incomes and anchoring expectations.
• Comfortable foreign reserves and a manageable current account added to stability.

Reasons for caution

• Growth had visibly decelerated, with weak private investment and subdued consumption demand.
• Low inflation partly reflected depressed rural demand and farm distress rather than pure efficiency.
• Persistent unemployment, banking-sector stress (NPAs) and sluggish exports pointed to structural strains.

Verdict

Thus, while stable growth and low inflation are genuine strengths, they do not by themselves indicate an economy in robust health. Sustained good shape requires reviving investment, generating jobs, and addressing demand and structural bottlenecks.