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Has India Truly Entered a Higher Growth Phase?

Financial Times | Economic Growth

Has India Truly Entered a Higher Growth Phase?

“India surprised forecasters last year. While much of the global economy slowed under the weight of high interest rates and geopolitical uncertainty, the world’s most populous country grew upwards of 7 per cent. Inflation has fallen sharply, and the external deficit remains modest…

Has the Indian economy finally shifted on to a structurally higher growth trajectory?

There is a plausible case that something has changed. India has long oscillated between two uncomfortable states: rapid expansion accompanied by inflation and external imbalances, or macroeconomic stability achieved at the cost of slower growth. Recent performance appears to sit between these extremes.

Improved macroeconomic management is part of the story. India formally adopted inflation targeting in the past decade, and monetary policy has since been more predictable and transparent. Fiscal policy, while hardly tight, has become more credible, with an explicit medium-term consolidation path and a sharper distinction between day-to-day spending and public investment. On the external front, India is less reliant on foreign capital to finance growth than in the past — an important change for a country with a history of balance-of-payments pressures.

Structural reforms reinforce the optimistic reading. A nationwide goods and services tax has reduced internal trade barriers in what was once a fragmented market. New bankruptcy rules have disciplined creditor behaviour and improved capital reallocation, even if enforcement remains uneven. Perhaps most striking for outsiders is India’s digital public infrastructure. National biometric identification, real-time payments and interoperable digital platforms have sharply lowered transaction costs, deepened financial inclusion and strengthened the state’s ability to deliver services.

There are also early signs that India’s supply side has become more responsive. Large public investment in roads, ports and logistics has eased bottlenecks that once caused growth accelerations to spill quickly into inflation. Targeted incentives have begun to attract manufacturing investment into electronics, renewables and other tradeable sectors. If supply can respond more smoothly to rising demand, higher growth need not be destabilising — a prerequisite for any lasting structural shift.”

From Financial Times.

Blog Post | Wealth & Poverty

Dinner With Dickens Was Slim Pickins

Claims that characters in "A Christmas Carol" were better off than modern Americans are pure humbug.

Summary: There have recently been widespread claims that Dickens’s working poor were better off than modern minimum-wage workers. Such comparisons rely on misleading inflation math and selective reading. The severe material deprivation of Victorian life—crowded housing, scarce possessions, and basic sanitation problems—dwarfs today’s standards. Modern Americans, even at the lower end of the income scale, enjoy far greater material comfort than the Cratchits ever did.


Christmas is often a time for nostalgia. We look back on our own childhood holidays. Songs and traditions from the past dominate the culture.

Nostalgia is not without its purposes. But it can also be misleading. Take those who view the material circumstances of Charles Dickens’s “A Christmas Carol” as superior to our own.

Claims that an American today earning the minimum wage is worse off than the working poor of the 19th century have been popular since at least 2021. A recent post with thousands of likes reads:

Time for your annual reminder that, according to A Christmas Carol, Bob Cratchit makes 15 shillings a week. Adjusted for inflation, that’s $530.27/wk, $27,574/yr, or $13.50/ hr. Most Americans on minimum wage earn less than a Dickensian allegory for destitution.

This is humbug.

Consider how harsh living conditions were for a Victorian earning 15 shillings a week.

Dickens writes that Mr. Cratchit lives with his wife and six children in a four-room house. It is rare for modern residents of developed nations to crowd eight people into four rooms.

It was common in the Victorian era. According to Britain’s National Archives, a typical home had no more than four rooms. Worse yet, it lacked running water and a toilet. Entire streets (or more) would share a few toilets and a pump with water that was often polluted.

The Cratchit household has few possessions. Their glassware consists of merely “two tumblers, and a custard-cup without a handle.” For Christmas dinner, Mr. Cratchit wears “threadbare clothes” while his wife is “dressed out but poorly in a twice-turned gown.”

People used to turn clothing inside-out and alter the stitching to extend its lifespan. The practice predated the Victorian era, but continued into it. Eventually, clothes would become “napless, threadbare and tattered,” as the historian Emily Cockayne noted.

The Cratchits didn’t out-earn a modern American earning the minimum wage. Mr. Cratchit’s weekly salary of 15 shillings in 1843, the year “A Christmas Carol” was published, is equivalent to almost £122 in 2025. Converted to U.S. dollars, that’s about $160 a week, for an annual salary of $8,320.

The U.S. federal minimum wage is $7.25 per hour or $15,080 per year for a full-time worker. That’s about half of what the meme claims Mr. Cratchit earned. Only 1% of U.S. workers earned the federal minimum wage or less last year. Most states set a higher minimum wage. The average worker earns considerably more. Clerks like Mr. Cratchit now earn an average annual salary of $49,210.

Mr. Cratchit couldn’t have purchased much of the modern “basket of goods” used in inflation calculations. Many of the basket’s items weren’t available in 1843. The U.K.’s Office of National Statistics recently added virtual reality headsets to it.

Another way to compare the relative situation of Mr. Cratchit and a minimum-wage worker today is to see how long it would take each of them to earn enough to buy something comparable. A BBC article notes that, according to an 1844 theatrical adaptation of “A Christmas Carol,” it would have taken Mr. Cratchit a week’s wages to purchase the trappings of a Christmas feast: “seven shillings for the goose, five for the pudding, and three for the onions, sage and oranges.” Mr. Cratchit opts for a goose for the family’s Christmas meal. A turkey—then a costlier option—was too expensive.

The American Farm Bureau Federation found that the ingredients for a turkey-centered holiday meal serving 10 people cost $55.18 in 2025. At the federal minimum wage, someone would need to work seven hours and 37 minutes to afford that feast.

A minimum-wage worker could earn more than enough in a single workday to purchase a meal far more lavish than the modest Christmas dinner that cost Mr. Cratchit an entire week’s pay. And the amount of time a person needs to work to afford a holiday meal has fallen dramatically for the average blue-collar worker in recent years despite inflation. Wages have grown faster than food prices.

There has been substantial progress in living conditions since the 1840s. We’re much better off than the Cratchits were. In fact, most people today enjoy far greater material comfort than did even Dickens’s rich miser Ebenezer Scrooge.

This article was originally published in the Wall Street Journal on 12/23/2025.

Bloomberg | Poverty Rates

Ghana’s Poverty Eases as Nutrition and Education Improve

“Ghana said it had made progress in curbing poverty amid an improvement in households’ conditions of nutrition and education, although inequality remained a persistent problem.

A multidimensional poverty index for the West African nation declined to 21.9% at the end of the third quarter of last year from 24.9% in the final quarter of 2024, Ghana Statistical Service said in a report on Wednesday…

The measure tracks worsening states of living, employment, health and education using 13 indicators.”

From Bloomberg.

Mexico News Daily | Poverty Rates

Middle Class Mexicans Now Outnumber Those in Poverty

“The Mexican government on Friday said that for the first time in history, more Mexicans are categorized as middle class than as living in poverty.

Jesús Ramírez, director of President Claudia Sheinbaum’s Council of Advisers, also said that based on World Bank data the Mexican middle class grew by more than 12 percentage points between 2018 and 2024.

‘These figures coincide with [our own] data indicating a reduction in poverty,’ Ramírez said, referencing the August national statistics agency [INEGI] report that poverty was reduced from 41.9% of the population in 2018 to 29.6% by last year.

The August INEGI report found that the number of Mexicans living in poverty declined from 51.9 million in 2018 to 38.5 million in 2024.”

From Mexico News Daily.