7.8% GDP Growth

By Poonam I Kaushish

India has a new magic number: 7.8%. The economy grew by 7.8% in first quarter of 2026-27 giving Government reason to celebrate. Yet before drums roll louder and champagne is popped, one question deserves an answer: Where is this growth in the life of an ordinary Indian?

Not in a spreadsheet, but in the household. GDP may be soaring, but are jobs? Are wages keeping pace? Is household purchasing power up? Is disposable income rising? Is poverty falling? Is the middle class breathing easier? And if the economy is doing so well, why does economic security remain so elusive for so many? And, most importantly, are Indians happier?

The question is not whether 7.8% is real. The Centre has defended the new GDP methodology, critics have questioned whether the revised calculations adequately reflect what is happening on the ground. Both sides have made their case. But reducing the debate to whether the number is “right” or “wrong” or celebration vs cynicism misses the larger point: Where is its multiplier effect on employment, wages and household prosperity? Can one turn an economic statistic into a political certificate of good governance?

And nowhere is this disconnect more visible than in India’s middle class. GDP is a measure of economic output. It is not a measure of human wellbeing or how people experience growth. A country can produce more cars, build more roads, sell more financial services, consume more, record higher industrial output and invest more without automatically making every household more secure while a young graduate may struggle to find a decent job.

A salaried family may see its savings eaten by school fees, a retiree may wonder whether one medical emergency will wipe out his lifetime savings as millions remain unemployed, worry about healthcare, insurance, housing and the next electricity bill. GDP does not measure sleepless nights.

Ironically, the middle class is India’s economic workhorse but increasingly its political orphan. Think. It earns, spends and pays taxes: income tax on earnings, GST on consumption, service tax, road tax, private security, school fees, healthcare, insurance and funds public services through taxation.

It receives fewest subsidies with zilch in return except patchy services: inflated bills, broken roads, potholes, flooding, ghoos, hafta, cut money etc. It is expected to applaud growth, absorb inflation, comply with every new digital requirement and somehow keep consuming to keep the economy humming. Alongside, the extraordinary expectation that it should pay privately for what the State promises publicly.

Any wonder the middle class is angry as India has become a democracy of vote banks. Every caste is counted, courted and compensated. The poor have welfare politics, farmers organised pressure, caste groups political arithmetic, communities political negotiators, disadvantaged groups champions and rich are accommodated. Leaders can tell exactly how many votes they need from every caste, community and beneficiary group.

But ask about the middle class and suddenly their arithmetic goes blank as it is neither sufficiently poor for welfare nor sufficiently powerful to demand concessions. But has a tax department and is expected to cope. Bringing things to such a pass where it increasingly feels its’ the ATM of the Republic.

Do our leaders care about the middle class who pay bills? Given rising household costs and cost of living. Has politics become focused on redistribution that the productive, tax-paying middle class is taken for granted? Why is there no improvement in services as Government’s tax revenues boom?

It is expected to celebrate GDP growth, absorb inflation when prices rise, pay taxes when incomes rise and applaud digitisation when transactions become easier. But when does the State ask whether citizen’s disposable income, job security and quality of life have risen with the economy?

A nation is not a spreadsheet. GDP can grow but citizens do not eat GDP, educate children, pay taxes and hospital bills with GDP. They are too fragmented to become a vote bank and too law-abiding to make its grievances electorally threatening. Governments cannot ask citizens to judge the economy by macroeconomic numbers when they experience it through microeconomic realities.

Why do we measure success through production, consumption and investment but treat wellbeing as a sentimental afterthought? The World Happiness Report doesn’t pretend GDP is irrelevant. It simply recognises that income is only one component of a good life. Social support, health, freedom and ability to lead a meaningful life matter too.

If growth is 7.8% it is an opportunity Government must seize, not merely rejoice. Strong growth should generate investment, employment, higher incomes and eventually a larger, more secure middle class. The Government has spent considerable political capital telling middle class it is its Government. Prime Minister Modi describes middle class as central to nation-building and highlights tax relief and “ease of living.” If it is so important to Government, why does it have so little political voice?

The real test of growth is not how much the economy produces but what production does for people’s lives? How many jobs are created? What is happening to household purchasing power? Is productivity translating into wages, social security, trust, opportunity and a sense of wellbeing?

Is the benefit of growth reaching the bottom and middle or accumulating disproportionately at the top? Because growth without distribution creates prosperity statistics; growth with opportunity creates prosperity.

India’s ambition to become a developed economy by 2047 should mean more than becoming a larger economy. Development is not merely becoming richer. It is becoming better off. That means growth creating jobs that pay, not merely jobs that count. It means wages rising with productivity, a family not being financially devastated by illness, parents not having to spend their life savings on exorbitant private education and uncertain public alternatives.

Women should not have to calculate whether their economic independence is worth the cost of inadequate safety and infrastructure and elderly should not regard retirement as a financial cliff, they should have dignity rather than dependence and opportunity should become broad-based rather than concentrated.

Perhaps the real GDP debate is not whether India grew by 7.8%. It is whether the middle class grew with it. Because, an economy can become richer on paper while its citizens remain poorer in opportunity, security, confidence and hope. At some point, GDP must leave the Government spreadsheet and enter the citizen’s kitchen, classroom, workplace and wallet.

The Government sees GDP, citizen sees EMI, Government sees consumption, citizen sees grocery bill, Government sees digital transactions, citizen sees dwindling bank balance. The Government sees growth. The citizen asks: what grew for me? Somewhere between the two lies the real story of India’s growth. Until then, 7.8% may be a remarkable economic number. But a number is not a national mood. — INFA