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

How Hindutva and the Taliban mirror each other in power and ideology

By Bhabani Shankar Nayak* The recent visit of Taliban-appointed Afghan Foreign Minister Amir Khan Muttaqi to India and the warm reception extended to him by the Modi government have raised questions about India’s foreign policy direction. The decision appears to lend legitimacy to the Taliban regime, which continues to suppress democratic aspirations in Afghanistan.

Celebrating 125 yr old legacy of healthcare work of missionaries

Vilas Shende, director, Mure Memorial Hospital By Moin Qazi* Central India has been one of the most fertile belts for several unique experiments undertaken by missionaries in the field of education and healthcare. The result is a network of several well-known schools, colleges and hospitals that have woven themselves into the social landscape of the region. They have also become a byword for quality and affordable services delivered to all sections of the society. These institutions are characterised by committed and compassionate staff driven by the selfless pursuit of improving the well-being of society. This is the reason why the region has nursed and nurtured so many eminent people who occupy high positions in varied fields across the country as well as beyond. One of the fruits of this legacy is a more than century old iconic hospital that nestles in the heart of Nagpur city. Named as Mure Memorial Hospital after a British warrior who lost his life in a war while defending his cou...

History, culture and literature of Fatehpur, UP, from where Maulana Hasrat Mohani hailed

By Vidya Bhushan Rawat* Maulana Hasrat Mohani was a member of the Constituent Assembly and an extremely important leader of our freedom movement. Born in Unnao district of Uttar Pradesh, Hasrat Mohani's relationship with nearby district of Fatehpur is interesting and not explored much by biographers and historians. Dr Mohammad Ismail Azad Fatehpuri has written a book on Maulana Hasrat Mohani and Fatehpur. The book is in Urdu. He has just come out with another important book, 'Hindi kee Pratham Rachna: Chandayan' authored by Mulla Daud Dalmai.' During my recent visit to Fatehpur town, I had an opportunity to meet Dr Mohammad Ismail Azad Fatehpuri and recorded a conversation with him on issues of history, culture and literature of Fatehpur. Sharing this conversation here with you. Kindly click this link. --- *Human rights defender. Facebook https://www.facebook.com/vbrawat , X @freetohumanity, Skype @vbrawat

N-power plant at Mithi Virdi: CRZ nod is arbitrary, without jurisdiction

By Krishnakant* A case-appeal has been filed against the order of the Ministry of Environment, Forest and Climate Change (MoEF&CC) and others granting CRZ clearance for establishment of intake and outfall facility for proposed 6000 MWe Nuclear Power Plant at Mithi Virdi, District Bhavnagar, Gujarat by Nuclear Power Corporation of India Limited (NPCIL) vide order in F 11-23 /2014-IA- III dated March 3, 2015. The case-appeal in the National Green Tribunal at Western Bench at Pune is filed by Shaktisinh Gohil, Sarpanch of Jasapara; Hajabhai Dihora of Mithi Virdi; Jagrutiben Gohil of Jasapara; Krishnakant and Rohit Prajapati activist of the Paryavaran Suraksha Samiti. The National Green Tribunal (NGT) has issued a notice to the MoEF&CC, Gujarat Pollution Control Board, Gujarat Coastal Zone Management Authority, Atomic Energy Regulatory Board and Nuclear Power Corporation of India Limited (NPCIL) and case is kept for hearing on August 20, 2015. Appeal No. 23 of 2015 (WZ) is filed, a...

New RTI draft rules inspired by citizen-unfriendly, overtly bureaucratic approach

By Venkatesh Nayak* The Department of Personnel and Training , Government of India has invited comments on a new set of Draft Rules (available in English only) to implement The Right to Information Act, 2005 . The RTI Rules were last amended in 2012 after a long period of consultation with various stakeholders. The Government’s move to put the draft RTI Rules out for people’s comments and suggestions for change is a welcome continuation of the tradition of public consultation. Positive aspects of the Draft RTI Rules While 60-65% of the Draft RTI Rules repeat the content of the 2012 RTI Rules, some new aspects deserve appreciation as they clarify the manner of implementation of key provisions of the RTI Act. These are: Provisions for dealing with non-compliance of the orders and directives of the Central Information Commission (CIC) by public authorities- this was missing in the 2012 RTI Rules. Non-compliance is increasingly becoming a major problem- two of my non-compliance cases are...

Urgent need to study cause of large number of natural deaths in Gulf countries

By Venkatesh Nayak* According to data tabled in Parliament in April 2018, there are 87.76 lakh (8.77 million) Indians in six Gulf countries, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). While replying to an Unstarred Question (#6091) raised in the Lok Sabha, the Union Minister of State for External Affairs said, during the first half of this financial year alone (between April-September 2018), blue-collared Indian workers in these countries had remitted USD 33.47 Billion back home. Not much is known about the human cost of such earnings which swell up the country’s forex reserves quietly. My recent RTI intervention and research of proceedings in Parliament has revealed that between 2012 and mid-2018 more than 24,570 Indian Workers died in these Gulf countries. This works out to an average of more than 10 deaths per day. For every US$ 1 Billion they remitted to India during the same period there were at least 117 deaths of Indian Workers in Gulf ...

Epic war against caste system is constitutional responsibility of elected government

Edited by well-known Gujarat Dalit rights leader Martin Macwan, the book, “Bhed-Bharat: An Account of Injustice and Atrocities on Dalits and Adivasis (2014-18)” (available in English and Gujarati*) is a selection of news articles on Dalits and Adivasis (2014-2018) published by Dalit Shakti Prakashan, Ahmedabad. Preface to the book, in which Macwan seeks to answer key questions on why the book is needed today: *** The thought of compiling a book on atrocities on Dalits and thus present an overall Indian picture had occurred to me a long time ago. Absence of such a comprehensive picture is a major reason for a weak social and political consciousness among Dalits as well as non-Dalits. But gradually the idea took a different form. I found that lay readers don’t understand numbers and don’t like to read well-researched articles. The best way to reach out to them was storytelling. As I started writing in Gujarati and sharing the idea of the book with my friends, it occurred to me that while...

Caste, employment, and Bihar elections: The tragedy of Musahar child labourers

By Sunil Kumar* Bihar 's biggest festival of 'democracy'—the elections—has begun with its full clamor. The announcements from both the ruling party and the opposition create the illusion that the state's suffering will vanish in an instant, and the lives of the people of Bihar will be greatly enriched. As in every election, this time too, caste and employment are emerging as key issues. Every party is unrolling its bundle of promises. But amidst this electoral noise, there are stories that are deliberately kept 'quiet'—because both the ruling party and the opposition benefit from their silence. One such story is the death of four Musahar children.

Creative destruction? The myth of ‘better capitalism’ behind the 2025 Economics Nobel

By Bhabani Shankar Nayak * The Royal Swedish Academy of Sciences has awarded the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Joel Mokyr , Philippe Aghion , and Peter Howitt “for having explained innovation-driven economic growth .” According to the Nobel announcement on October 13 , one half of the prize goes to Professor Joel Mokyr “for having identified the prerequisites for sustained growth through technological progress ,” while the other half is shared by Professors Philippe Aghion and Peter Howitt “for the theory of sustained growth through creative destruction .”

Search This Blog