Skip to main content

Modi's "Hindu" economics: Development sans investment? Calling bluff from officially-released facts

By Hemantkumar Shah*
Capital investment is essential for development. Production, and thereby national and people's income, increase when small and big companies and enterprises make investment. Yet the fact is, under the Modi regime capital investment is not going up.
In 2016-17 Gross Fixed Capital Formation (GFCF), that is investment in machinery, was 28.5% of national income, i.e. GDP. It remained at the same level in 2017-18.
After Modi came to power, the base year for this calculation was changed to 2011-12. With that base year, the Average Annual Growth Rate (AAGR) of GFCF during two year period of 2012-14 was 11.20%.
With the previous base year of 2004-05, for the eight-year period of 2004-12, the AAGR of GFCF remained at 20.57%. If we take in to account the 10-year period, it works out to 15.88%.
During the Modi regime of four years, 2014-18, the AAGR of GFCF was just 2.09%. In 2016-17, it reduced by 6.13%! It was Rs. 40.03 lakh crore in the previous year and reduced to 37.98 lakh crore in 2016-17!
These figures show that the Modi government has failed in attracting small or big, Indian or foreign investment in the country.
Is this Modi's Hindu economics? Clearly, the claim of Modi government is wrong when he says that in 60 years nothing has been done and only he is developing India.

Foreign direct investment

It is claimed that Narendra Modi successfully attracted foreign investment in India by touring various countries in the world during last four years. This is another great bluff. Let us examine the facts:
The 2006-07 year was a watershed year for Foreign Direct Investment (FDI) in India, when FDi went up by 2.5 times of the previous year. Since then it went up continuously.
The above table shows that the AAGR was highest during 2004-14 period in the 21st century. During Modi's regime it was reduced to an almost half of it, and it went further down to 8% in 2016-17 and mere 3% last year.
This simply means that foreign companies do not see India as an attractive destination for investment under Modi regime.

Rupee's decay

During the 2014 Lok Sabha elections campaign, it was claimed that the Indian rupee will be brought to level of 40 with respect to one US$, if Modi comes to power. It has now been proved beyond any doubt that it was a bluff par excellence, propagated by Modi himself and his bhakts.
When Modi assumed power on May 26, 2014, the exchange rate was Rs. 58.73. On June 28, 2018, it was Rs 69.10. Thus, average annual rate of depreciation works out to be 4.41%.
The exchange rate was Rs. 45.32 in 2004. Thus, the average annual rate of depreciation of value of Indian Rupee was 2.96 % for the 10-year rule of Manmohan Singh.
It shows that Indian Rupee has been comparatively devalued with higher speed in last four years of the Modi raj!
(Sources: Reserve Bank of India; A note dated 31-05-2018, published by the Department of Statistics and Programme Implementation, Government of India; Department of Industrial Policy and Promotion, Government of India)
---
*Professor of economics, Gujarat University

Comments

TRENDING

Savarkar 'criminally betrayed' Netaji and his INA by siding with the British rulers

By Shamsul Islam* RSS-BJP rulers of India have been trying to show off as great fans of Netaji. But Indians must know what role ideological parents of today's RSS/BJP played against Netaji and Indian National Army (INA). The Hindu Mahasabha and RSS which always had prominent lawyers on their rolls made no attempt to defend the INA accused at Red Fort trials.

'Enough evidence' in Indian tradition to support legal basis for same-sex marriage

By Iyce Malhotra, Joseph Mathai, Sandeep Chachra*  The ongoing hearing in the Supreme Court on same-sex marriage provides space for much-needed conversations on issues that have hitherto remained “invisible” or engaged with patriarchal locker room humour. We must recognize that people with diverse sexualities and complex gender identities have faced discrimination, stigma and decades of oppression. Their issues have mainly remained buried in dominant social discourse, and many view them with deep insecurities.

Delhi HC rules in favour of retired Air Force officer 'overcharged' for Covid treatment

By Rosamma Thomas*  In a decision of May 22, 2023, the Delhi High Court ruled in favour of petitioner Group Captain Suresh Khanna who was under treatment at CK Birla Hospital, Gurugram, between April 28 and May 5, 2021, for a period of eight days, for Covid-19 pneumonia. The petitioner had to pay Rs 3,55,286 as treatment costs, but the Ex-Servicemen Contributory Health Scheme (ECHS) only reimbursed him for Rs 1,83,748, on the basis of government-approved rates. 

Urgency for next pandemic? But Mr Health Secretary, you're barking up wrong tree

By Dr Amitav Banerjee, MD*  The Union Health Secretary, Mr Rajesh Bhushan addressing the Health Working Group of G20 India, at Hyderabad on 05 June 2023, cautioned that the next pandemic would not wait for us to make global treaties and called on countries to work together.

Religious divide 'kept alive' with low intensity communalism in Gujarat's cultural capital

By Rajiv Shah  A fact-finding report, prepared by the Mumbai-based non-profit, Centre for Study of Society and Secularism (CSSS), has cited the Vadodara Ram Navami violence of March 30 as yet another example of how, after the BJP consolidating its hold on political power in Gujarat post-2002 riots and at the Centre in 2014, the nature of communal riots has changed, underlining, as opposed to high-intensity violence earlier, now riots have become “more sub-radar and at a smaller scale, more localized”.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Why continued obsession with adding more 'water guzzling' coal, nuclear power plants?

By Shankar Sharma*  The true concerns over water inefficiency in coal power plants have been known and have been highlighted many times in the past. A highly relevant study report by Prayas Energy Group had highlighted this fast looming threat to our society many years ago. But our authorities have been acting as though there can be no issue with water supply, and that additional coal power plants can be added indefinitely; even without any true relevance to climate change.

Generative AI as 'potent weapon and shield' in battle of political misinformation

By Haziq Jeelani*  In the pulsating heart of the digital era, the political arena is ceaselessly molded by the swift and relentless flow of information. The line between fact and fiction often blurs, creating a nebulous landscape where truth and deceit intertwine. 

Kailash Satyarthi NGO rescues 12 child workers from high profile Gujarat private varsity

By Our Representative  In a rather grim reflection of the state of child labour in Gujarat, 12 child labourers, most of whom belong to Rajasthan tribal communities, have been rescued from the campus of a high profile private university in Rajkot by a team of the Bachpan Bachao Andolan (BBA), Anti-Human Trafficking Unit (AHTU), Labour Department, Centre for Labour Research and Action, and the Police.