“India has overtaken Japan to become the world’s third-largest economy.”

Fireworks, real and rhetorical, followed this announcement last month. Ministers tweeted. Media headlines boomed. WhatsApp groups churned out fresh memes and patriotic cheers.

We at India House wanted to celebrate too. But we paused. We fact-checked.

And the reality was slightly different.

India is close, but not quite there yet. As of early 2025, our GDP stands at about $3.93 trillion, chasing the $4 trillion mark that would officially rank us third in around a year’s time.

Still, with growth at 7.4 percent last quarter and an annual average near 6.5 percent, we’re undeniably on the move. Construction, manufacturing, and services are growing. Digital infrastructure is deepening. Foreign investors are watching closely. It’s only a matter of time before we cross that milestone.

So yes, the celebration is not misplaced.

But before we get into the GDP ‘party’, we need to pause and ask:

What does this mean for India? For Indians? Who’s getting a slice of this GDP cake, and what’s actually in that slice?

That’s what we’re unpacking in this Policy Mandala. Let’s go!

But, let’s quickly revise: GDP!

GDP, or Gross Domestic Product, is the world’s shorthand for economic power. It adds up the value of all goods and services produced in a country. That includes smartphones from Noida, AI tools from Hyderabad, wheat from Tripura, and coal from Jharkhand.

It’s the metric investors watch, sovereign credit agencies rate, and multilateral lenders use to set borrowing terms. It signals how strong an economy is and how much leverage it holds in global affairs.

It’s an important outcome of both conscious and unconscious policy choices.

Over the past decade, India has tripled infrastructure spending and rolled out Production Linked Incentive schemes that together sparked nearly ₹2 lakh crore in new investments. India drew over $80 billion in foreign capital last year alone, as global funds rushed to buy Indian government bonds and this also got included in JP Morgan’s Emerging Market Bond Index.

What’s driving this momentum?

Massive public investment in roads, rail, and energy creates jobs and builds long-lasting assets. PLI schemes pulling in fresh capital. And a 350-million-strong middle class that powers a significant percent of GDP through demand for housing, mobility, and digital services.

It’s no surprise that India is now the fastest-growing major economy, expanding around 6 to 7 percent even in a shaky global environment.

There’s no question that GDP growth matters. It gives us credibility, invites investors, and secures a seat at global tables. But GDP also hides as much as it reveals. It tells us how big the economy is, but not exactly how well people are doing.

Look at jobs. Urban youth unemployment sits near 18 percent. Only 12 percent of college graduates find formal jobs within a year. Most new work is informal, without contracts, health coverage, or paid leave. About 91% of India’s workforce of 5.2 crore is informal, who lack basic social insurance.

Per capita income, i.e. the average income per person, stands around ₹2.5 lakh a year. That places us roughly 110th globally when adjusted for prices. So while the economy grows, many Indians still hustle just to stay afloat.

Then there’s the work GDP doesn’t see at all.

Across millions of homes, women wake before dawn, cook, fetch water, care for elders, help with homework, clean, manage illnesses, and often still contribute to family incomes through farms or home-based businesses. This unpaid care work keeps households running. In truth, it underpins India’s largest social security system: the family.

But since no money changes hands, none of it shows up in GDP. Estimates suggest that unpaid care and domestic work add over ₹22 lakh crore in value every year, more than the entire national education budget. Yet because it’s not counted, it rarely becomes a priority in policy. If we measured it properly, we might see stronger investment in childcare centres, maternity support, or rural infrastructure that eases household burdens.

Instead, this massive contribution remains invisible. It doesn’t show up in our national accounts, so it doesn’t shape how we plan.

GDP also misses something else: the costs of climate damage.

According to a recent CEEW Study, 3/4th of Indian population is at 'high' to 'very high' heat risk. In 2024 alone, crop yields in Punjab and Haryana dropped 10 percent. Delhi’s air quality stayed hazardous for nearly three months, halting outdoor work and construction. Chennai has lost ₹20,000 crore to floods in 2015 and continues to lose in every subsequent flood since.

These aren’t rare events anymore. They’re becoming annual shocks that disrupt labor, logistics, and livelihoods.

Ironically, rebuilding after floods, buying more air purifiers, or treating pollution-triggered illnesses can all push GDP higher. Economic activity rises, even when people’s well-being sinks. That’s the blunt truth: GDP measures transactions, not human flourishing.

So how are we really doing?

India ranks 132 out of 191 on the Human Development Index, with an HDI score of 0.645. About 19 crore Indians still live with multidimensional poverty, lacking health, education, or decent living standards, even though 24 crore came out of it over the last decade.

It’s a messy reality. The economy is growing. Lives are improving. Yet too many are still left behind.

This is the classic policy paradox: better, but still bad.

Other countries have started asking deeper questions about what progress should look like.

Bhutan measures Gross National Happiness. New Zealand uses a Wellbeing Budget that directs money based on social outcomes, not just sectors. Scotland has a dashboard of 81 indicators that guide public planning, tracking everything from mental health to ecological resilience.

These aren’t casual experiments. They’re serious attempts to put human well-being on par with economic growth.

So why does GDP still dominate?

Because it’s simple. Because it’s familiar. Because it makes for powerful headlines and is easy for global markets to digest. “India at $4 trillion” sounds compelling. “Multidimensional poverty fell by 1.5 percent” doesn’t have the same ring. Metrics like HDI or the Social Progress Index lack glamour and often don’t influence trade deals or big loans. So GDP stays at the top.

But this obsession comes at a cost. When GDP becomes our only compass, we overlook the millions of lives hidden behind averages.

So what could India do differently?

First, focus less on aggregate GDP and more on GDP per capita and median income. GDP per capita shows roughly what each person’s share would be. Median income reveals what the typical Indian earns. Together, they cut through the illusion of sheer size.

Second, lead the way in building a GDP-plus framework that reflects India’s unique context. This means valuing unpaid care work, household savings, and informal sector contributions that sustain the economy but stay invisible. It wouldn’t replace GDP, but would sit alongside it, giving a more honest picture of how we’re doing.

Third, be transparent about trade-offs. India has rightly focused on macro stability, low inflation, and big infrastructure spending. This strategy has brought credibility and steadiness. But it’s also meant slower wage growth in rural areas and fewer new jobs. These are deliberate choices that deserve debate by all of us.

Fourth, stay committed to growing beyond services. PLI schemes are a start, but manufacturing still makes up only about 15 percent of GDP. Unlocking more here means making it easier for MSMEs to scale, for private investors to take risks, and for research and development to thrive. That’s how we build resilience and real industrial heft. And there is a lot of work that needs to be done on this front.

So yes, let’s celebrate India approaching $4 trillion. It reflects resilience, reform momentum, and growing clout in the global economy. That’s worth a genuine round of applause.

But let’s also stay clear-eyed. GDP tells us how big the economy is. It doesn’t tell us how fair, healthy, or hopeful it is.

That’s the kind of progress we should aim for. And that’s the kind of India Policy Mandala will keep rooting for.

See you next week.

The team behind Policy Mandala has launched a 4-month policy program for professionals, the Policy Pioneers Program, in collaboration with IIM Raipur and the Public Systems Lab at IIT Delhi.

Know more about it here.

Book Mandala

In this section, we suggest a book to be read/listened to each week, for the inner policy enthusiast in you :)

Book: GDP: A Brief but Affectionate History

Author: Diane Coyle

About the Book:

Diane Coyle, a leading economist and former adviser to the UK Treasury, offers a concise yet compelling history of one of the world’s most quoted — and misunderstood — numbers: GDP. Tracing its origins from the Great Depression to its central role in modern policymaking, Coyle explains how GDP came to dominate economic thinking, what it leaves out, and why that matters. With clarity and wit, she walks readers through the metric's evolution, its role in global politics, and the urgent debate over what we should be measuring instead in the 21st century.

Our Take:

This is the kind of book we at Policy Mandala love — crisp, insightful, and deeply relevant to how we think about growth. Coyle strikes a rare balance between economic rigour and accessibility, making it a great read for policy nerds, students, and curious citizens alike.

As India inches toward the $4 trillion mark and we reflect on what that number actually tells us (or doesn’t), this book offers critical context. It doesn’t preach, it invites you to rethink.

Co-authored by Meenakshi Singh and Aswathi Prakash.

Hope you liked today’s Policy Mandala!

We believe nation-building needs a community of changemakers—so we’re creating Bharat Mandala, an ecosystem for impact. Be part of our journey here!

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Imagine two vibrant nations: India, home to juicy Nagpur oranges and sturdy Ludhiana bicycles, and Indonesia, famous for its Batik textiles and tropical seafood. For years, they’ve traded oranges for tuna without much fuss.

But one fine day, when India tries selling its bicycles in Bali, alarms go off—“What about our own small cycle industry?” And when Indonesia tries exporting its Batik shirts to India, Surat’s textile industry isn’t too pleased either.

So, both countries pull out a familiar play: tariffs—those trade tolls that add a little price bump to protect homegrown goods.

Now, a Batik shirt in Mumbai? Pricier than it needs to be. An Indian bicycle in Bali? Suddenly not such a bargain. These taxes are like tolls on the global trade highway, making imported goods expensive and thus less preferred, and thus making it difficult for foreign countries to export them.

Then comes a moment of diplomatic warmth—perhaps over masala chai and fried fish at a regional summit. Leaders from both sides wonder, “Why not make trade smoother?” Enter the Free Trade Agreement (FTA)—a pact to reduce or remove tariffs and let goods, services, and investments flow with fewer hurdles.

Simple in theory. But if you’ve heard farmers in Punjab worry about foreign dairy, or read headlines on how ASEAN deals impact local businesses, you know FTAs come with fine print—and fireworks.

In this edition of Policy Mandala, we decode India’s journey with FTAs—how it all began, why it slowed down, and why it's surging again. So pour yourself a cup of chai, and let’s unpack India’s trade tango.

Globally, over 350 FTAs are in play right now, knitting economies together. They’re the engine of a world where nations lean on their strengths—India’s tech and pharma, say—to fuel growth. For India, with 13 FTAs and six PTAs (Preferential Trade Agreements - pickier than FTAs, cutting tariffs only on specific goods) covering over 50 countries, these deals act like a ticket to the global stage.

But mind you, India’s own FTA journey has been anything but linear.

Pre-1988, India kept to itself.

The India–Sri Lanka FTA nudged the doors open. Then came the 1990s liberalisation and a golden run in the 2000s—FTAs with Singapore, ASEAN, Japan, Korea, and Malaysia promised export-led growth.

Then came the brakes.

By 2012, trade deficits and domestic pushback led to skepticism. India exited RCEP in 2019, worried about Chinese imports.

Despite the promise of a seamlessly connected world, Free Trade Agreements (FTAs) remain a grey zone in policymaking.

While India’s exports to FTA partners rose by 31% between 2017 and 2022, imports surged by a staggering 82%, reviving the old debate—do FTAs unlock prosperity or invite peril?

India’s trade deficit with ASEAN is a telling example, ballooning from 500 crores in 2010 to 2600 crores in 2022. But beyond the numbers lie deeper structural issues. Only about 25% of Indian exporters actually use FTA benefits, compared to 70–80% in countries like Japan or the US. Why so low?

The usual suspects: complex documentation, rigid rules of origin, limited awareness, and the invisible wall of non-tariff barriers that trip up even the most competitive sectors.

Take the example of Priya* in Gujarat. Around 10 years back, she discovered her cotton fabrics could be exported to Japan duty-free under RCEP. She secured an order, produced the lot, but hit a paperwork wall, asking for a series of documentation which were difficult to obtain for her. Without a trade consultant or local support, the export deal collapsed, leaving her frustrated and financially strained.

Her cousin Mohan* in Ludhiana faced different woes. He was a small-scale manufacturer of steel for the domestic Indian market. His business was doing well, but in 2023-24, with the cheap Chinese steel flooding India via the ASEAN route, the prices suddenly fell. His production cost itself was higher than the steel market prices. Unable to compete, Mohan shut his business down.

Many MSMEs share their plight.

FTAs promise trade opportunities but often open import floodgates, overwhelming small players. Without robust shields—subsidies, simplified compliance, or local expertise—Indian businesses struggle to navigate complex trade rules, certifications, and cutthroat competition, risking closures and lost livelihoods.

These experiences shape India’s cautious approach to trade deals.

Electronics manufacturers worry about being undercut by global majors. Farmers in Punjab and Maharashtra fear foreign agri-imports eating into their markets. And MSMEs, which form the backbone of India’s employment, often lack the buffers or technical superiority to absorb global competition. These concerns generate strong domestic pressure that makes any new FTA politically sensitive.

But post-2021, with Make in India and PLI boosts, FTAs made a comeback: Mauritius, UAE, Australia. The India-UAE deal wrapped in just 88 days. The UK pact in May 2025 opened a 4260 crore corridor for Indian textiles and IT.

This resurgence is more than a policy reset—it’s strategic positioning. India is eyeing export-driven growth, countering China’s trade dominance, and strengthening ties with both the West and the Global South.

When designed well, FTAs create jobs, attract foreign capital, and enhance global competitiveness. The India–Australia ECTA is expected to add an estimated 10 lakh jobs, primarily in pharma and services. By cutting tariffs, FTAs make Indian products—textiles, pharma, leather—more attractive in global markets. The UK deal alone could add 1500 crores in trade by 2030, while the Australia agreement brought in 120 crores in FDI last year, helping international companies set up operations in India’s growing digital and manufacturing spaces.

Free Trade Agreements (FTAs) position India strategically in a world rethinking global supply chains. Provisions on digital trade, intellectual property, and financial services—like those in the India–Australia ECTA, support India’s ambition to grow its digital economy to 1,00,000 crores by 2025. FTAs, in this context, align with the Atmanirbhar Bharat vision—not by isolating India, but by building competitive capacity for global markets.

We now know why Trump wants Apple to set up its factory in the US, and why Apple wants it in India, and why it might be a good idea for India to have it in India.

So, where do things stand? India’s Free Trade Agreements (FTAs) remain a mixed bag—some breakthroughs, some roadblocks. Here’s a quick look at the latest innings.

Leading the scoreboard is the India–UK FTA, signed in May 2025. It opens up 99% of UK goods to duty-free access and boosts key Indian sectors like textiles, gems, and IT services. Indian techies and nurses get easier UK visas, filling skill gaps. Critics say gains are slim—many exports already had low tariffs—and fret over cheap UK whisky, but Indian farmers dodged trouble with UK dairy and poultry excluded from the deal. It also marked India’s first G7 FTA handshake.

Meanwhile, talks with the US, EU, and Canada stumble: the US deal, eyed for 2025, stalls over lost Generalized System of Preferences (GSP) status - largest and oldest U.S. trade preference program. The EU is pushing for steep tariff cuts of up to 13% and stricter green commitments, while negotiations with Canada have been on ice since 2023.

India’s FTAs showcase our tech edge but expose agriculture’s weak spots. Protecting domestic interests will require more than just cautious negotiation—it will call for targeted SME support, robust impact assessments, and a serious effort to improve FTA utilisation. Countries like South Korea offer useful templates, such as their KOTRA model which uses digital tools to help businesses access trade benefits.

India’s FTA story is still being written.

It is not simply a tale of tariffs and trade; it is a reflection of India’s evolving place in the world. As the country seeks to balance growth with self-reliance, global competitiveness with local resilience, FTAs become both a compass and a test. The coming years will demand sharper negotiations, smarter safety nets for small businesses, and a stronger push to help Indian exporters truly leverage these agreements.

Whether FTAs turn into pathways of prosperity or pitfalls of pressure depends on how well India aligns its domestic strengths with global opportunities. The trade tango continues—and we’re here to watch and cheer for India to lead the dance.

Book Mandala

In this section, we suggest a book to be read/listened to each week, for the inner policy enthusiast in you :)

Book: Trade Wars Are Class Wars

Author: Matthew C. Klein

About the Book:

Trade Wars Are Class Wars flips the script on global economics. Matthew C. Klein and Michael Pettis argue that the root of trade imbalances isn’t clashing nations, but internal inequality.

When elites in countries like China and Germany earn more than they spend—while workers earn too little to consume—the result is excessive saving, surplus production, and the need to export the difference. With sharp analysis and deep historical context, the book reveals why fixing the global economy starts with rebalancing power at home, not abroad.

Our Take:

This book rewires how we think about trade. It’s not about flags or deficits—it’s about fairness. Klein and Pettis show that trade surpluses aren’t signs of success; they’re symptoms of suppressed wages. And deficits? Often the byproduct of inequality and underpaid labor.

What makes Trade Wars Are Class Wars stand out is its clarity. It connects Wall Street crashes, Chinese overproduction, and German wage stagnation into one coherent story: when workers can’t afford what they produce, someone else has to borrow to consume it. That’s the real imbalance. This book is essential reading for anyone thinking about the future of globalisation, economic justice, or the politics of prosperity.

Co-authored by Meenakshi Singh and Aswathi Prakash

Hope you liked today’s Policy Mandala!

We believe nation-building needs a community of changemakers—so we’re creating Bharat Mandala, an ecosystem for impact. Be part of our journey here!

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How many business owners do you know?

Not startup founders with investors. Not Ambanis or Adanis. We mean everyday entrepreneurs—the ones running things on the ground.

The sabziwala who’s stood at the same corner for years. The woman running a boutique from her home. The guy who fixed your phone last week.

Chances are, you know quite a few. And here’s something you may not have realized: many of them—maybe three out of ten—started or grew their business thanks to a Mudra loan sometime in the last decade.

You’ve probably heard the name. It’s been on posters outside banks, in ads, in speeches by the PM. Even if you don’t know the details, Mudra has been hard to miss.

So why talk about it now?

Because this month, Mudra turns 10. Launched in 2015, it was built on a simple but powerful idea: give small entrepreneurs access to formal credit. No agents. No jargon. No collateral. Just a direct loan based on what your business needs.

In ten years, that idea has grown into one of India’s biggest credit movements. Over ₹30 lakh crore disbursed to nearly 48 crore borrowers. This isn’t just policy. It’s a quiet economic revolution unfolding all around us.

In this edition of Policy Mandala, we’re unpacking that revolution. We’ll look at how Mudra works, what it’s achieved, where it’s falling short, and how it could do better—with a few ideas of our own.

At its core, Mudra was built to unlock formal credit for informal businesses—the micro-enterprises that keep India’s economy running from the ground up. Think street vendors, tailors, local artisans, home-run beauty salons, and more.

To keep it simple, loans were structured in three tiers: Shishu: up to ₹50,000, for early-stage businesses Kishor: ₹50,001 to ₹5 lakh, for growing ones Tarun: ₹5 lakh to ₹10 lakh, for more mature setups

The process was designed to be low on paperwork. Loans could be accessed through banks, NBFCs, or platforms like Udyamimitra, which connects entrepreneurs to lenders under Mudra and other schemes.

So, has it worked?

In many ways, yes. The average Mudra loan size has nearly tripled—from ₹38,000 in 2016 to over ₹1 lakh in 2025. From better-off states like Tamil Nadu to poorer ones like Uttar Pradesh, Mudra has seen wide adoption. And beyond credit numbers, the Social Fabric Index—which tracks how marginalized communities engage with formal finance—jumped from 0.813 in FY17 to 2.640 in FY22. That’s a big leap, and Mudra has been a major driver.

It ticks a lot of boxes: less paperwork, easier access to finance, business maturity-based loans, wide coverage, and high policy visibility. But that brings us to a bigger question:

Is Mudra really ‘unique’? Was this the first time the government tried to improve credit access for small entrepreneurs?

Not at all.

India has a long history of credit-linked schemes. Priority Sector Lending guidelines already require banks to direct 40% of their lending to underserved sectors like agriculture, education, and small businesses. Institutions like NABARD and SIDBI were built for such roles. Self-Help Groups had bank linkages too.

But those earlier models were institution-led, complex, and rarely designed for first-time entrepreneurs. They relied on paperwork, guarantees, or past records—things most local entrepreneurs didn’t have.

That’s what sets Mudra apart.

It made credit more human—and more visible. By plugging into the Jan Dhan–Aadhaar–Mobile (JAM) trinity, it became easier to identify borrowers, transfer funds, and track usage.

It shifted the lens from lending out of obligation to backing entrepreneurs with real potential. It got political support, media buzz, and public trust. And crucially, the data shows it reached places most policies didn’t—rural, semi-urban, and urban India alike.

Still, if we really want to measure Mudra’s success, we need to flip the question.

Is it enough to count loans disbursed? Or should we ask: how many jobs were created? How many businesses survived beyond the first year? How many came back for a second—and bigger—loan?

Because here’s a reality check: only 2% of all Mudra accounts and just 24% of the total loan value fall under the Tarun category as of FY24. And this trend isn’t new. The numbers have been flat since 2019. That tells us most Mudra-supported businesses aren’t scaling. Few return for a second round, and even fewer are ready to move into high-growth territory.

The 2024–25 Union Budget rolled out something new: Tarun Plus—a loan slab that extends the cap to ₹20 lakh for those who’ve repaid earlier Tarun loans. A thoughtful move for those on a clear growth path. But also a bit like opening a bike showroom in a village where most folks are still learning to cycle.

Because if so few reach the ₹10 lakh mark, who benefits from the new cap? And more importantly, why aren’t more businesses moving up?

Another issue is the limit itself. Back in 2015, a Shishu loan of ₹50,000 could go a long way. One sewing machine, some fabric, a table, a chair, maybe a kettle for chai breaks.

But today? That same sewing machine costs over ₹30,000. Add raw materials, rent, and utilities, and that loan doesn’t stretch far. Inflation has eroded its value, and what once felt like a launchpad now barely covers the basics.

Then there’s the matter of NPAs—Non-Performing Assets. In plain terms, bad loans are unlikely to be repaid.

There’s no clear public data, but the government claims defaults are under control, thanks to a credit guarantee fund that covers up to 75% of losses. That feels more like risk-sharing within government accounts than a true fix.

The real concern? We don’t know where the risk lies. There’s no NPA data by loan category—Shishu, Kishor, or Tarun—so we can’t tell if defaults happen early or later. Without that insight, any policy fix is just guesswork.

And usage data? That’s another blind spot. We know how much was disbursed. But we don’t know what happened next.

How many businesses made it past Year 1? How many created jobs or income? What failed—and why?

It’s like cutting the ribbon on a new highway, celebrating the build, and never checking if anyone used the road.

So where do we go from here?

First, let’s stop pretending credit equals opportunity. A Mudra loan shouldn’t be standalone. Every Shishu loan could come with mentorship—maybe short digital modules in local languages, offered at bank branches.

Second, revise outdated caps. ₹50,000 today isn’t what it was in 2015. Adjusting for inflation isn’t reform—it’s basic hygiene. Loan limits should be revised periodically, linked to costs.

Third, build in impact tracking. We already have the tools—Aadhaar-linked systems, digital payments, mobile platforms. Use them. Not to micromanage, but to spot trends, track outcomes, and guide smarter policy.

Fourth, focus on urban poor entrepreneurs. Rural India gets policy attention through agriculture and MGNREGA. The urban poor—many of whom rely on Mudra—remain overlooked. Why not integrate credit, skilling, and community-level support for them?

Finally, make Mudra aspirational again. PM Vishwakarma worked because it blended tradition with training, credit with pride. Mudra needs that energy. Not just for branding, but for real outcomes. Shift the message from “loans for the poor” to “investments in potential.”

The bottom line? Ten years in, Mudra has made credit accessible. That’s a win.

But it hasn’t made entrepreneurship easier. Not yet. The scheme opened a door—but too many don’t know how to walk through it.

Maybe it’s time to stop measuring success in crores disbursed, and start counting livelihoods built.

Because a loan is just the beginning. What happens next—that’s what really matters.

As Mudra enters its second decade, here’s the question:

Can we turn one-time borrowers into long-term builders? Or will we keep writing small cheques for big dreams—with no roadmap in sight?

Book Mandala

In this section, we suggest a book to be read/listened to each week, for the inner policy enthusiast in you :)

Book: The Golden Road

Author: William Dalrymple

About the Book:

In The Golden Road, William Dalrymple retraces the old silk routes of culture, commerce, and faith that once tied the East to the West. With his characteristic mix of curiosity, lyricism, and dry wit, Dalrymple travels across ancient lands that were once bustling crossroads—Afghanistan, Central Asia, Iran, India—where civilizations collided, blended, and sometimes vanished. This is not a political commentary or a historian’s record, but a deeply personal exploration of how memory lingers in forgotten monasteries, bustling bazaars, and fading traditions. It’s a journey that reveals how interconnected the world once was—and how those threads continue to shape the present in quiet, surprising ways.

Our Take:

Reading The Golden Road feels like being guided by a companion who’s equal parts storyteller, historian, and wanderer. The book takes you to places that don’t usually make headlines, but were once at the heart of global exchange. In doing so, it reminds the reader how the boundaries we see on modern maps are far newer than we think—and often blurrier than we admit.

What makes the book stand out is not just Dalrymple’s prose, but his presence. He listens more than he speaks. He lets the landscapes and people tell their own stories—whether it's a carpet seller in Samarkand or a priest guarding a forgotten church in Armenia. For readers of Policy Mandala, it resonates in an unexpected way. Because at its core, this book is about systems of connection—economic, cultural, and human—that shaped the world quietly, over time. Much like the informal enterprises and local knowledge systems we explore in policy today.

It’s not a fast read—but it’s a rewarding one. Especially for those who like their journeys layered, like a good conversation that starts with trade and ends with poetry.

Co-authored by Mrinal Rai and Aswathi Prakash.

Hope you liked today’s Policy Mandala!

We believe nation-building needs a community of changemakers—so we’re creating Bharat Mandala, an ecosystem for impact. Be part of our journey here!

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Ding-dong! The doorbell rings.

Aman stands outside, ringing the doorbell of… Aman.

Both are hungry. Both are glued to their phone screens. But their worlds couldn’t be more different.

Aman-2 just wrapped up a $1000 freelance project—weeks of effort, now safely secured with a contractual guarantee. He has a health insurance plan, a financial cushion, and the luxury of choosing when to work.

Aman-1, on the other hand, is racing against time, completing his 20th delivery of the day—for an earning of ₹25. No safety net. No protections. One emergency away from losing everything.

Both Amans are part of the gig economy: where work flexibility goes hand-in-hand with financial uncertainty, and one person's convenience often comes at the cost of another’s chaos.

Gig work is simple—short-term, task-based jobs with no long-term contracts. Think of it as work on demand. And when you add up all these gigs? That’s the gig economy.

India’s gig economy isn’t just growing—it’s booming. In 2021, we had 77 lakh gig workers. By 2023, that number crossed 1 crore, and by 2030, it’s expected to reach 2.35 crore. This isn’t just a trend—it’s becoming a key pillar of the economy, projected to contribute ~1.25% to India’s GDP by then.

Gig workers in India fall into two broad categories.

1. Platform-based workers include your cab drivers, food delivery agents, and others who work through digital platforms. These are mostly regarded as middle-to-low-skilled jobs, forming ~78% of the gig workforce.

2. Non-platform workers are freelancers, independent professionals, and casual wage workers operating outside these platforms. They are mostly domain experts who offer their expertise through gig work.

And the majority of gig work is being led by youth, with 40% of gig workers between 16 and 23 years old. While gig work may have started as a side hustle for some, it is now shaping the future of work.

Let’s understand the nuances of Gig Economy or Gig Work.

Firstly, the mode of engagement. Most gig platforms call their workers “independent contractors” or “partners”—which sounds empowering until you realize it’s just a fancy way of saying no benefits, no protections, and no bargaining power. No minimum wage, no paid leave, no social security. And while platforms promise flexibility, rejecting assignments often leads to penalties—because, apparently, flexibility only works one way. A recent TISS report highlights how these penalties erode worker autonomy, turning ‘gig work’ into ‘gig servitude’.

Then there’s the money problem. Platforms claim high earning potential, but the reality is far less glamorous. Most ride-hailing platforms take 25-40% commissions, squeezing driver earnings. Uber recently dropped its commission model after protests, but that’s just one battle in a long war. Food delivery and e-commerce gigs run on a pay-per-delivery model, with payouts ranging from ₹10 to ₹50 per order, depending on factors like demand, location, and how generous the algorithm is feeling that day. For many, it’s a daily gamble rather than a stable income.

And if financial uncertainty wasn’t enough, gig work can be deeply isolating. With 98.5% of gig workers reporting stress, anxiety, or depression, it's clear that algorithm-driven work schedules don’t come with peace of mind. Traditional worker communities, like auto stands, are disappearing, leaving gig workers without social support. It’s a lonely grind, where the only “team meetings” happen in app notifications, removing the potential of group negotiating powers.

So, is the economy self-regulating, or is the government stepping in? The Indian government has tried a few things—but let’s just say execution hasn’t always been smooth.

The Social Security Code 2020 was the first official recognition of gig workers. But instead of granting them full employee benefits, it nudged them toward social security schemes—which sound nice, but remain limited in reach. While the Code enabled gig workers to access life and disability cover, health benefits, maternity benefits, and old-age protection, it still lacked strong enforcement mechanisms.

Then came the e-Shram Portal in 2021, designed to bring unorganized workers under social security schemes. Great idea, but execution has been sluggish. The rigid classification of job roles doesn’t fit gig work’s fluid nature, and workers report struggling to register. Many find the process so tedious that they just skip it altogether. Originally meant to provide gig workers access to insurance, employment assistance, and pension schemes, the platform’s limited outreach and bureaucratic hurdles have made it ineffective.

Meanwhile, some states are leading the charge. Rajasthan passed the Platform-Based Gig Workers Registration and Welfare Act, 2023, setting up a welfare board and tracking gig work transactions. Karnataka is working on similar legislation to ensure fair pay, job security, and protection from arbitrary dismissals. While these efforts signal progress, enforcement remains a challenge.

At the national level, the recent Union Budget saw Finance Minister Nirmala Sitharaman announce identity cards and a registration process for gig workers—an attempt to formalize the sector. But as always, the real question is: Will these policies translate into real change, or just more paperwork?

Looking at international models, the European Union’s Platform Workers Directive (2024) is ensuring that misclassified gig workers get proper employee rights. Meanwhile, the UK has recognized ‘worker’ as a distinct category entitled to minimum wage, paid leave, and pensions. In 2021, the UK Supreme Court ruled that Uber drivers were, in fact, workers, a decision that sent ripples through the industry and invited significant resistance from the aggregators.

So, what needs to change?

1. Time to Drop the “Independent Contractor” Facade: Gig workers need legal recognition as employees, with access to minimum wages, paid leave, and job security. The gig economy thrives on their labor—it’s only fair that they receive proper protections.

2. Expand Social Security Benefits: The Social Security Code should be strengthened to ensure gig workers receive institutional benefits, not just scheme assistance.

3. Set Up Grievance Redressal Mechanisms: Unfair deductions, arbitrary deactivations, and payment disputes need structured resolution channels. Right now, workers are at the mercy of faceless algorithms.

4. Algorithmic Transparency is Non-Negotiable: Platforms should disclose how earnings, penalties, and job assignments are determined. If a worker’s livelihood is controlled by an app, they at least deserve to know how it makes these decisions.

India’s gig economy is at a crossroads. On one hand, it offers employment opportunities in a rapidly changing job market and absorbs the frustration of unemployment widespread among the country’s youth. On the other, it leaves millions vulnerable to exploitation. If India truly wants to become a gig-driven economy, it must find a way to balance flexibility with fairness, innovation with integrity, and profits with protections. Because at the end of the day, an economy that thrives at the cost of its workers isn’t a sustainable one—it’s just another ticking time bomb.

Book Mandala

In this section, we suggest a book to be read/listened to each week, for the inner policy enthusiast in you :)

Book: The Gig Economy in India: Start-Ups, Infrastructure and Resistance
Author: Pradip Ninan Thomas

About the Book:
The Gig Economy in India: Start-Ups, Infrastructure and Resistance by Pradip Ninan Thomas provides an in-depth analysis of India’s growing gig economy, highlighting its opportunities, challenges, and structural complexities. The book explores the intersection of technology, labour, and policy, offering insights into how digital platforms like Ola, Uber, Swiggy, and Zomato have reshaped work and employment.

Through a mix of theoretical perspectives and real-world examples, the book presents a well-rounded view of the gig economy’s impact on India’s workforce. It is a valuable resource for students, researchers, policymakers, and anyone interested in the future of work in India.

Our Take:
Pradip Ninan Thomas presents a sharp and well-researched critique of India's gig economy, going beyond the usual narratives of innovation and flexibility to highlight the deeper structural issues. The book does an excellent job of placing India's gig economy in a global context while also highlighting uniquely Indian factors, such as regulatory gaps, informal labor traditions, and digital financial systems.

Overall, "The Gig Economy in India" is an insightful, critical, and timely read for anyone looking to understand the realities of platform work in India. It moves beyond surface-level discussions and forces the reader to question the sustainability of this new labor model. Highly recommended for policymakers, academics, and anyone interested in labor rights and the future of work.

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Below, we discuss one recent policy update from the past week(s), and analyze them for you: Let’s go!

Imagine you're planning your family’s yearly budget: sorting fixed expenses, setting aside emergency funds, and maybe, just maybe, finally taking that long-overdue vacation. Now, scale that up to a national level and get the annual government budget. It’s not just about numbers; it’s a roadmap of the country's priorities and ambitions. And, we just saw the government unveil it for 2025-26 earlier this month.

While the Great Indian Middle Class cheered tax cuts and the US government saw some Trump-requested (read: threatened or warned) custom rate reductions, finer details on schemes and policies got buried in the headlines. So, here we are!

Well, this time the government is betting heavily on Paani, Makaan, Naukri, Bijli and Sadak, i.e. water, housing, employment, electricity and roads! So, in this edition of Policy Mandala, we’ve picked the five key schemes that received major funding boosts, offering clues on where the government’s focus lies. Let’s unpack them one by one!

1. Jal Jeevan Mission:

The government just gave the Jal Jeevan Mission a 195% budget hike to ₹67,000 crores. Launched in 2019, the mission aimed to provide tap water to rural households and has covered nearly 80% so far. Originally set to wrap up in 2024, it’s now extended to 2028 (If only our deadlines were this forgiving!). Why? Because the last 20% is always the hardest—just like those last two kilograms at the gym!

Turns out, for the last two years, the revised estimates have been 30% lower than the allocated budget. Why? Probably, execution challenges. We estimate three big reasons for the same:

• Water Quality: Tap water isn’t always safe water. Groundwater contamination in Punjab, Rajasthan, and West Bengal (Deadly ones like Arsenic and Fluoride!) means many still can’t drink what comes out of their taps. Our dream policy would be to add water quality as an objective of Jal Jeevan Mission.

• Availability: Some taps exist, but water doesn’t. Some areas in Rajasthan, for example, have pipelines but no steady supply due to issues with the sourcing of water. A fancy tap with no water? Just a wall decoration! Our dream policy would be to put a tracker on the availability of water as a benchmark in the Jal Jeevan Mission.

• Sustainability: Pipelines alone don’t ensure water security. Sustainable groundwater management and local community involvement are crucial. Right now, it’s a top-down government scheme, but without ‘jan bhagidari’ (public participation), long-term success seems like a pipe dream—literally. Our dream policy would be to see a Swacch Bharat Mission-style community participation. Jalyukt Shivar, a government policy from Maharashtra offers a model for this.

Factoring in external factors like climate change and industrial demand, the challenge only grows. Will the government rethink its approach in the extended deadline or just keep patching leaks? Our dream is the earlier one, and we hope the government is listening!

2. Pradhan Mantri Awas Yojana (PMAY):

PMAY’s budget has jumped 64% to ₹78,126 crores. Launched in 2015, PMAY set out to tackle India’s housing shortage by ensuring a pucca house (concrete house) for every eligible household. Originally meant to end in 2022, then 2024, it’s now three years behind schedule. But let’s be honest—delays and Indian construction go hand in hand.

This funding boost is critical as housing prices in major cities have soared—Delhi-NCR saw a 32% spike last year! But more money doesn’t automatically mean smoother execution.

• Rural Delays: In states like Bihar, Kerala and Maharashtra, funds arrive late, leaving houses unfinished. Some beneficiaries have had to pitch in their own money—defeating the purpose of a subsidy.

• Urban Affordability: Can this scheme keep up with skyrocketing real estate prices? A bigger budget helps, but without fixing execution hurdles, the dream of "Housing for All" remains just that—a dream.

3. Employment Generation:

The government is doubling down on jobs with a 194% funding hike—₹20,000 crores for the New Employment Generation Scheme. The kicker is that the New Employment Generation Scheme isn’t officially recognized yet, and last year’s allocation remains a mystery (Is it in a secret government vault?) But we believe these include the Employment Linked Incentives (ELI) launched last year, which incentivises employers and employees to encourage job creation in the formal sector but is yet to be operationalized. We will wait to see how this budget header gets utilized.

What we do know is that India’s youth needs 1-1.2 crore jobs annually, but Citigroup estimates we’re generating only 80-90 lakh per year. If all goes well, the ELI expects to generate about 2 crore jobs in the next 2 years. But if past employment schemes struggled due to red tape, would this one be different? That’s the billion-rupee question.

4. PM Surya Ghar Muft Bijli Yojana:

This scheme’s budget jumped 80% to ₹20,000 crores, aiming to install 1crore rooftop solar panels by 2027. Sounds great, but reality check:

• Subsidy Delays: Many states report slow subsidy disbursement, discouraging participation. Hopefully, the government’s experience of at-scale deployment like the Ujjwala and Ujala schemes will come in handy to solve this crisis.

• Grid Integration Issues: Some areas don’t have the infrastructure ready to handle decentralized solar power right now, making energy generation inefficient.

The intent is strong and progressive, but execution hurdles remain. Because installing panels is one thing—ensuring they actually power homes is another!

5. Rural Roads:

The Pradhan Mantri Gram Sadak Yojana (PMGSY) also got a 31% boost to ₹19,000 crores. Rural connectivity is a proven economic driver, improving access to education, healthcare, and markets. While this increase is promising, infrastructure projects in India often suffer from cost overruns and delays. Let’s hope these roads don’t take as long to complete as metro projects in some cities (we’re looking at you, Bengaluru!).

Overall, This budget signals a clear push for infrastructure, clean energy, and employment—all crucial for long-term stability, development at the grassroots and creating ground for economic growth of the nation. But budgets alone don’t transform economies. Bold allocations signal great intent. Execution will signal capability. And India needs both.

The real test, as we know well as policymakers, will be on Execution. More money is great, but it will require fixing systemic inefficiencies and tracking the outcome indicators well. Don't worry, we at Policy Mandala will be around to track this in the coming days!

But now, over to you—what do you think about the budget this year?

Note: All the hikes have been calculated against the revised estimates of 2024-25.

Book Mandala

In this section, we suggest a book to be read/listened to each week, for the inner policy enthusiast in you :)

Book: How India Scaled Mt G20: The Inside Story of The G20 Presidency
Author: Amitabh Kant

About the Book:
"How India Scaled Mt G20: The Inside Story of the G20 Presidency" by Amitabh Kant offers a deep dive into India's leadership during its G20 presidency in 2023. As the country’s G20 Sherpa, Kant provides an insider’s account of the intricate diplomacy, high-stakes negotiations, and strategic moves that shaped the summit. The book takes us into the deep intricacies of organizing summits, negotiating tough deals, and keeping stakeholders happy, and highlights India's push for amplifying the voices of Global South nations.

Our Take:
Amitabh Ji’s work is both a memoir and a strategic analysis.

The book is a compelling read for those interested in diplomacy and global governance. As a highly acclaimed bureaucrat and author, his writing is simple, and deep and breaks down complex negotiations into an engaging narrative, offering a behind-the-scenes look at how India navigated challenges and emerged as a key player in global decision-making. The book does not shy away from discussing both the delights and the difficulties faced during the summit, adding depth to the narrative. Overall, it’s an insightful read that underscores India’s growing diplomatic influence and its ability to lead international discussions effectively.

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Analysis #1: India relaxes ESG reporting: Is it necessity or conviction?

Remember that collective sigh when your professor or manager extends a deadline?
Feels great, doesn’t it? That’s exactly the mood in boardrooms across India after SEBI extended the ESG reporting deadline for listed companies.

But before we proceed, let’s understand ESG first.

Think of ESG as a corporate report card, grading companies not just on profits and revenue but also on their responsibility towards the Environment, Society, and Governance. It’s the government’s way to include societal good in the way companies operate.

ESG, as a term, was first used in a UN report in 2004 and made it to India’s boardroom discussions when the Ministry of Corporate Affairs introduced a voluntary ESG guideline in 2009. Within 3 years, the top 100 companies began to file their Business Responsibility Reports (BRRs) in 2012, which was soon expanded to the top 500 companies by 2016. This framework was expanded to become Business Responsibility and Sustainability Reporting (BRSR) in 2021 and was expanded to the top 1000 companies as a voluntary framework, and became mandatory from FY 2023-24.

And now the latest one. Last week, SEBI just gave businesses a breather, pushing mandatory ESG reporting from FY 2024-25 to FY 2025-26. Until then, compliance remains voluntary instead of the current "comply-or-explain" model. This is the reason for the smiles in the boardrooms.

But why the extension? Well officially, SEBI cites global challenges in accessing clear and accurate data across complex value chains. From raw material sourcing to factory audits, businesses worldwide struggle with incomplete information.

Legit? Partially.

Here’s what we think:

1. Geopolitics at Play: India’s rejection of the COP29 final agreement (Read Policy Mandala #11) signals resistance to bear disproportionate costs of sustainability pushed by developed nations. It marks the tough choice of developing countries like India, between economic growth and climate change, hinged on geopolitical realities.

2. Economic Realities: With a Q2 GDP dip (Read Policy Mandala #12) and lower-than-expected growth, strict ESG mandates might be economically burdensome right now. Hence, delaying it makes the government more business-friendly.

3. Competitive Edge: In the global manufacturing race, India must appear business-friendly, aligning ESG rules with softer mandates, aligned with major Southeast Asian competitors. This keeps India in the race to attract manufacturing investments.

However, to look at the bigger picture, this delay also offers companies time to prepare while nudging value chain partners to adopt ESG principles. It also highlights the delicate balance India must strike: pursuing green growth without compromising developmental priorities.

So, is India’s ESG approach driven by necessity, conviction, or a mix of both? The answer will shape our role in the global sustainability narrative. Stay tuned!

Analysis #2: Argentina: When Economic Dreams Turn into Nightmares

Messi—ring a bell? The legendary footballer.
Messy—ring another bell? The adjective for chaos.
Well, Argentina, home to Messi, is currently dealing with a rather messy economic situation.

Okay, bad joke. We see it now. Moving on.

From being a global economic superstar in the 1920s, with a GDP on par with France and Canada, Argentina now faces grim realities: 40% of its population lives in poverty, and inflation crossed 200% in December 2023.

That’s when Javier Milei took over as the President of Argentina. He had promised radical economic reforms and campaigned with a literal chainsaw to symbolize his overhaul plans. Milei pushed bold initiatives: cutting government spending, dollarizing the economy, and privatizing state enterprises. Critics called it "shock therapy," but fans hailed him as a saviour.

And guess what? It’s starting to work. Monthly inflation dropped from 26% in December 2023 to just 2.7% by October 2024. World leaders took note: Donald Trump called Milei his “favourite president,” and Georgia Meloni praised his reforms. Even Trump’s re-election gave Argentina’s stock market a boost, signaling investor optimism in benefitting from a friendly US President. Seems like Argentina is on a path of recovery.

From being a rich nation a century ago to the economic downturn to recent successes, Argentina’s story is a masterclass in both what to do and what not to do.

On the cautionary side, reckless public spending in Argentina led to fiscal chaos, highlighting the need for India to balance election-driven welfare promises with fiscal discipline. We have covered this in our Policy Mandala #10. Also, focusing solely on GDP growth, as Argentina once did, masked deeper issues of inequality and poverty, and India must prioritize equitable, job-rich, and sustainable development if it wants a peaceful social order. Thirdly, inflation spiraling out of control eroded savings and trust in Argentina, underscoring the importance of maintaining the RBI’s independence and adhering to inflation-targeting policies. Similarly, frequent currency devaluations wreaked havoc on the Argentine peso, serving as a reminder for India to safeguard the rupee through robust foreign reserves and investor confidence.

On the positive side, Milei’s bold reforms—emphasizing minimum government and privatization—are showing signs of success. India could draw lessons here, pushing for more decisive reforms and moving further away from state-controlled corporations. However, it’s essential to note that India’s economy is far more diversified, resilient, and globally integrated than Argentina’s. While these lessons are valuable, India’s economic trajectory requires tailored, balanced approaches.

Argentina’s cautionary tale reminds us that proactive governance, fiscal discipline, and robust institutions are non-negotiable. For India, it’s not just about growing the economic pie; it’s about ensuring systems are in place to manage growth sustainably, both economically and socially.

Complacency in the Economy is the real enemy—because even the most promising economies can stumble if they rest on their laurels. Hope Indian Policymakers, both present and future, are taking notes ;)

Book Mandala

In this section, we suggest a book to be read/listened each week, for the inner policy enthusiast in you :)

Book: Not Just a Civil Servant

Author: Anil Swarup

About Book: Not Just a Civil Servant is a memoir by senior bureaucrat: Anil Swarup Ji, that offers an insider's perspective into the Indian bureaucracy. The author served as the Coal and Education Secretary in the Government of India, and through a series of narratives, the author has chronicled his experiences, shedding light on the complexities, challenges, and triumphs encountered during his distinguished career. The book delves into the multifaceted roles of a civil servant, providing readers with an authentic glimpse into the workings of the Indian administrative system.

Our Take: Strongly recommended for anyone interested in understanding the inner workings of the government, this book offers an engaging and insightful experience for the readers. Anil Ji's storytelling resonates as a candid conversation with a seasoned colleague, where he has shared candid reflections. This memoir is a valuable resource for current and aspiring civil servants, serving as an insider’s guide to the challenges and triumphs inherent in the life of a bureaucrat.

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