Business News/ Specials / The year in data: how 2024 stacked up for economy, politics, climate and more
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India is always beaming with the extraordinary potential of a massive young population, rapidly growing middle class, and geographical richness. Yet, while commenting on the country, pundits are forced to ring in the praises with a string of ‘buts’. India is truly a unique mix of hope and despair, and the year 2024 again offered ample evidence on both counts.
India is always beaming with the extraordinary potential of a massive young population, rapidly growing middle class, and geographical richness. Yet, while commenting on the country, pundits are forced to ring in the praises with a string of ‘buts’. India is truly a unique mix of hope and despair, and the year 2024 again offered ample evidence on both counts.
The hope is intact: the slowdown in the economy will be short-lived, consumption and investments will return, and improvements in statistical systems will lead to finer policymaking. But when the macro lens zooms in, despair isn’t far behind. Air pollution in many cities remains dangerously high, access to clean water is limited, and quality healthcare and education remain elusive—all this while stubborn price rises and taxing job hunts still frustrate many.
Seven years ago, the dream was to make India a $5-trillion economy by 2025. As 2024 ends, India is behind, but the pandemic setback hasn’t deterred us from hoping to now set eyes on becoming a developed economy by 2047. India’s stupendous rise on the league tables of gross domestic product (GDP) is bound to continue: it leapfrogged France in 2018 and the UK in 2021, and will soon leave Japan and Germany behind to become the world’s third-largest economy. But that tag is hardly a sufficient measure of success: per capita GDP, a more accurate reflection of how that prosperity distills down to its people, will be remarkably lower than all the countries it will cross.
Even before we get to that, several big and small hurdles will still be in India’s way.
Airpocalypse Now
Each year as the winter sets in, northern India experiences insufferable air pollution. Neither have we fixed the problem, nor are we measuring it well: India underestimates the severity on the worst days. The Central Pollution Control Board’s official air quality index (AQI) comes from the levels of several pollutants, with the final number capped at 500 even if it goes beyond that.
The official AQI on a day is a 24-hour average, with the 500 cap applied on each hour’s index, not on the final average, thus bringing down the day’s average. Since there are usually a few hours with a sub-500 AQI, the 24-hour average can then practically never touch 500. Without the cap, Delhi’s AQI would be 700-plus on 19 November, when it was reported in the 490s.
Beyond the underestimation, the lack of political will is unmissable: state and central governments have had only band-aid solutions to offer at the eleventh hour so far.
But is pollution really unbeatable? The short answer is: no. A decade ago, China was in the same boat, with major cities engulfed in smog. But, ever since the country declared “war on pollution" in 2014, its air quality has improved rapidly. From the prohibition of coal-fired plants to a restricted number of cars on roads, China showed efficient implementation of policies can yield results.
Beyond air, India’s growth and development trajectory will also be threatened by climate change and it will have to set aside huge budgets to tackle its impact. In 2024, global temperatures surpassed the dangerous mark of 1.5°C with respect to pre-industrial conditions in several months.
Developed countries pledged only a paltry sum to mitigate the climate crisis. India registered a strong protest on the global level, but closer home, one could argue such political will is lacking when it comes to tackling pollution.
The Political Landscape
The year was a tough one for incumbent governments around the world: the Bharatiya Janata Party (BJP), which was expected to sweep the elections for the third time with a bigger mandate, failed to secure a majority. Over 50 countries (out of the 70 that went to polls) voted the incumbents out, most prominently in the US and the UK. Like India, Japan and France are seeing weaker governments. The changes in the political landscape, especially in the US, could lead to another round of protectionism.
India may have to navigate its growth path amid higher tariffs as opposed to the golden time when the country grew rapidly in a liberalized and globalized world.
As such India cannot continue to underestimate some of its pressing issues, with price rise being one of the burning ones. The Reserve Bank of India (RBI) underestimated inflation for the fifth year in 2024-25 despite having acknowledged the risks arising from food price volatility, climate change and global price movements.
If the price trends of the past three years continue, inflation is unlikely to revert to the medium-term aim of 4% in 2025. While rising prices are breaking the back of the poor through costlier cereals and vegetables, the well-to-do and affluent sections of society are also struggling to keep up with the rising cost of health, education and housing. If the situation does not improve soon, India will pay the price by sacrificing growth and inducing frustration among common people.
The beginning of addressing a problem is by acknowledging it. A statistical gap emerged when the government decided to bury the Consumption Expenditure Survey of 2017-18, and as several other such surveys, crucial for understanding the shifts in the economy, got delayed due to the pandemic. In the past couple of years, the government made some progress in the release of the reports with smaller time lags.
However, 2024 still ended without any progress on the Census. Several policies are still being framed based on the last Census, which was done more than a decade ago in 2011. Between then and the scheduled Census of 2021, India’s population would have grown at least by 150 million, which will remain uncounted for a few more years.
The People’s Power
In the latter half of 2024, as foreign portfolio investors (FPIs) withdrew from Indian markets, domestic investors provided crucial support, mitigating a sharper market decline. The increased domestic participation reflects both growing interest and an evolving investment culture within India.
Looking ahead to 2025, the outlook is mixed, with debate intensifying over whether the Sensex will reach 100,000 points soon. While rising domestic investment offers some insulation against external volatility, further investor protection remains essential. The market regulator’s recent measures to safeguard investors from losses in futures and options (F&O) trading signal potential future interventions in this direction.
In the world of sports, India’s improved performance at the Olympics has given confidence to the country to serve as a host in 2036, with India formally sending the letter of intent this year. Hosting the Olympics has been draining for even many developed nations through cost overruns and raises the question of whether India should vie for such a demanding contest.
However, China is a great example of how hosting the Olympics could provide emerging economies with a huge platform to showcase their potential and boost their soft power in the world. To that end, India has 12 years to prepare itself for a grand Olympics show, if its bid is successful, and will need a significant improvement in medal tally. Host nations have secured ranks 1st to 15th since 1992 and by that measure, India’s best tally of securing the 48th rank is a long way from grabbing eyeballs.
India may have concluded another year grappling with a slowdown in growth, the unresolved climate crisis, rising prices, political shifts, and global uncertainties. Despite these challenges, the nation's aspirations remain ambitious. In 2025, India needs a well-defined road map to achieve key goals—clean air, better targeting of welfare schemes, price controls, job creation, and social inclusion—in its quest to become a developed economy.
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