Union Budget 2024-25: Three macro puzzles and policy implications

Why is consumption soft, employment growth weak, and core inflation low, when the economy is apparently growing strongly?

As July 23 draws near, all eyes have turned to the Union Budget, as the nation waits to see the course the new government has charted for the country. This course will be informed by the government’s explanation for three macroeconomic puzzles that have emerged in the last year.  Namely: Why is consumption so soft, employment growth so weak, and core inflation so low, when the economy is apparently growing so strongly?
 

Analysts have sought to explain each of these puzzles by recourse to all manner of intellectual contortions. Wielding Occam’s Razor, we can suggest a simple