Skip to main content

India enters quagmire of 'mistrust economy', as GDP growth officially slips to 4.5%

Subramanian Swamy with Modi
By Rajiv Shah
I have had a special liking for GDP, and it isn’t new, either. During my Times of India days in Gandhinagar (1997-2012), I remember, how as chief minister, Narendra Modi, post-2002 Gujarat riots, kept harping on the state’s double digit rate of growth rate continuously for three or four years, but got a little puzzled when, during a press conference, I asked him how was it that an official document talked of just 5.1% growth rate.
Perplexed, he kept quiet for a little more than a minute, looked around for an answer, and finally got one from the then finance secretary, who, sitting behind him, murmured something in his ear. “It so happens that when your GDP rate is very high for several years, it reaches a plateau, and then the possibility of as big a rise becomes difficult”, he told the media.
A good explanation, I thought, but wondered, why was it that he continued harping on the double rate of growth for so long, when it wasn’t the case. During those years, data wasn’t easily accessible. There was no internet, so comparisons too were not easy. Documents, especially the official ones, weren’t easy to get either. If not experts, at least reporters would rely heavily on whatever higher ups would dished out.
Thanks to a senior Gujarat government bureaucrat, who brought the figure of 5.1% state GDP growth rate to my notice, I could get the official report, which clearly mentioned the “slip”. There was reason to wonder: Was Modi trying to showcase a higher rate of growth only showcase Gujarat’s growth story at a time when he was under heavy criticism for “mishandling” the post-Godhra anti-minority communal flareup in 2002?
Two plus decades later, one is tempted to ask: Has Modi learned a lesson? It doesn’t seem so, lest even those who have been supporting his economic policies wouldn’t begin expressing doubts in what is happening with the economy. Indeed, his effort to put political considerations higher than economic ones appears to have added confusion around the country’s latest GDP figure for the second quarter of the current financial year, 4.5%, the lowest in the last six years.
While the deceleration is there for all to see, the government continues to claim that things would now surely improve. However, nobody seems to believe in the explanations being offered – not even those who loudly call themselves liberal right. Of course, the other brand of liberals, left, centre-left or centre-centre, whatever you may call them, are expectedly critical.
Ironically, as far as GDP figures are concerned, the critical remarks are strikingly similar – both from the right and the left. One of them from the left of the centre, for instance, doubting that it is not even 4.5% rate of growth, says that there is something amiss, as the manufacturing growth is -1% industry growth is -0.46%, and agricultural growth is 2%.
“Remember that the government has manipulated data, real growth might be around 1-2% only”, is a left-liberal comment. Citing manipulation which the Modi government previously resorted to by revising the base year for calculating GDP to 2011-12, another commentator said, “As per the old series the actual GDP growth is 0.7%.”
Nobody seems to believe in the explanations being offered – not even those who loudly call themselves liberal right
Agrees BJP Rajya Sabha MP, Subramanain Swamy, a confirmed rightist; he is being loudly proclaimed by left-liberals as a “Harvard economist” for saying, “Do you know what the real growth rate today is? They are saying that it is coming down to 4.8%. I’m saying it is 1.5%.” He adds, “Prime Minister Narendra Modi has surrounded himself with yes-men while the Indian economy heads for a tailspin followed by a collapse.”
Then there is Sadanand Dhume, a US-based right liberal, remarks, with an obvious reference to Arvind Subramanian, says, “If sceptics about India's GDP data are right, the actual growth rate may be even lower – 2.0% to 2.5%.
Another right-liberal Minhaz Merchant, doesn’t seem to dispute the figure, even says that the “average GDP growth over last 6 quarters is 6.2%”, adds, however, that things have turned “bad” and may be “growing worse” unless there are “reforms on GST, personal tax, land, labour and agriculture.
Amidst these comments, news has come that the Government of India is considering to revise the base year to calculate GDP growth rate – the Advisory Committee on National Accounts Statistics has recommended 2020-21 as next base year for GDP calculation, while earlier a seemed that the base year would be revised to 2017-18.
Meanwhile, critics have begun saying, just as previously the base year to calculate GDP was revised to 2011-12 by the Modi government in order to showcase a higher growth rate, the same would happen now. I am tempted to quote here from the heading of an article by Prof Kaushik Basu, a prominent economist at Cornell, US, in the New York Times (November 6), who says India has entered the quagmire of “mistrust economy" (more on this in my next blog). 

Comments

Umesh Joshi said…
Transparent analysis of present scenario of Indian economy.

TRENDING

North Gujarat gram panchayat bars villagers from dealing with Muslim hawkers, traders

By Our Representative  A gram panchayat in North Gujarat has barred its residents not to buy anything from Muslim traders and hawkers. An order of the Waghasan group gram panchayat of Tharad taluka of Banaskantha district dated June 30 states that the decision has been taken in the wake of beheading of a Hindu tailor after he posted a derogatory writeup on Prophet Mohammad in Udaipur. The gram panchayat resolution says, anyone seen buying or selling any commodity from a Muslim hawker or trader would be fined Rs 5,100. Bringing this to light, Mujahid Nafees, convener, Minority Coordination Committee, in a letter to Gujarat chief minister Bhupendra Patel, says, the state government should take legal action against the panchayat chief who has signed the “unjust” order. The letter says, the act of the sarpanch and other signatories is a violation of rule of law of the state and threat to peace, pointing out, the move is in violation of Article 15 of the Constitution, which says that none

Technocratic globalism, tyranny? Health Ministry warned: bill to 'enslave' Indians

Sandeep Pandey, Tushar Gandhi By Rosamma Thomas*  Union of Concerned Citizens, a group comprising Magsaysay Award winner Prof Sandeep Pandey, human rights activist Tushar Gandhi, former judge of the Bombay High Court BG Kolse Patil, pediatrician Dr Jacob Puliyel and several renowned Indian citizens have written to the Union Health Minister cautioning him against tabling the draft Public Health Bill in the Monsoon Session of Parliament. “The Public Health (Prevention, Control And Management Of Epidemics, Bio-Terrorism And Disasters) Bill, 2017 and a Prospective Bill of 2022 as discussed in news articles, is straightforwardly violative of Fundamental Rights of the citizens of India and therefore, Ultra Vires of the Indian Constitution. It contravenes several International Treaties and Conventions including the Nuremberg Treaty of 1947 which was enacted to ensure that no country would repeat such inhuman medical atrocities on fellow human beings”, the 12-page letter reads. “Strangely, t

Unlike Soviet Union, Russia is no friend to India: Ukrainian scholar tells 'Indian friends'

Counterview Desk In an open letter to "dear Indian friends", Anastasia Piliavsky, born in Odessa, Ukraine, studied at Boston and Oxford Universities (on a Rhodes Scholarship), and now teaches at King’s College, London, has said that she faces "deep moral dilemma", personally and professionally, over the "astonishingly unified Indian response to the war in Ukraine." Based on her interaction with a "number of thoughtful and caring Indian friends", in this letter, she says, she is "reeling at the ubiquitous silence at, justifications of or outright support for Putin’s terror, which now prevails in India, at the ubiquitous #IStandWithPutin and #istandwithrussia hashtags." She insists, India must understand, "Unlike the Soviet Union, Russia is no friend to India. Soviet leaders, beginning with (the Ukrainian) Nikita Khrushchev – who declared hindi rusi bhai bhai – built up deep political and cultural exchange with India." Text : I

PLFS data: Is rising employment good news? Deeper analysis suggests contrary results

By Ishwar Chandra Awasthi, Puneet Kumar Shrivastav*  Results of the Periodic Labour Force Survey (PLFS), 2020-21 , released by the Ministry of Statistics and Programme Implementation, Government of India (GoI) on June 14, 2022, show improvement in work force participation rate (WPR) and labour force participation rate (LFPR) and declining unemployment rate. Four rounds of data have been released from 2017-18 to 2020-21 based on PLFS. The general trend in the last four rounds clearly shows consistent increase in WPR and LFPR and falling unemployment rates by usual status (PS+SS). Though increase in WPR and LFPR is reported highest in 2019-20 over 2018-19, yet rising trend in these two key indicators continues throughout, and similarly fall in unemployment is registered highest in 2019-20 over 2018-19. Clearly, the recent results give some solace and relief after unprecedented Covid-19 pandemic that has entailed enormous loss of human lives and livelihoods and crippled economic activit

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".

'Drop all falsed charges': 150 citizens demand early release of AltNews co-founder

Counterview Desk  About 150 concerned citizens have demanded the release of Mohammed Zubair, co-founder of the fact-checkng newsportal AltNews, arrested over a 2018 tweet which allegedly hurt religious sentiments, even as booking for criminal conspiracy and having received foreign funds in violation of the Foreign Contribution Regulation Act (FCRA). Denied bail last weekend and sent to 14-day judicial custody, the concerned citizens, in a statement, regretted that while the Delhi High Court issued notice to the Delhi police on a petition filed on behalf of Zubair challenging the legality and propriety of his police remand and the seizure of his electronic devices, the “frivolous case” continues. Excerpts: The illegal arrest of Mr. Mohammed Zubair happened on June 27, 2022, by the Delhi Police for allegedly hurting religious sentiments and promoting enmity over a tweet from 2018. The IPC Sections included 153(a) (Promoting enmity between different groups on grounds of religion, race,

Chennai residents 'suffering': Faulty design, implementation of storm water project

By NS Venkataraman*  The Greater Chennai Corporation is now implementing storm water drainage project in 559 roads, covering a distance of 1033 kilometres, which cost around Rs 4,070 crore. For this massive project, which is targeted to be completed between April and September this year, huge loan has been availed from World Bank, Asian Development Bank and others. Several technocrats have pointed out that the project has been designed with outdated technology and quality of the implementation is so poor that the residents have been put to great hardships. As part of the project, digging of the road has been done to around 5 to 6 feet deep and width of around 4 to 5 feet. The drains are being constructed using steel reinforced cement concrete with two walls on either side with provisions for manhole, chute etc. This has been done in front of several houses leaving little space between the gate of the house and that of the drainage structure. As the work has been going on for mor

Prime Minister's 'affordable' housing policy fails to help Gujarat slum dwellers: Study

By Rajiv Shah  A new study on the implementation of one of the major policy initiatives for the urban poor by the Narendra Modi government after it came to power, Pradhan Mantri Awas Yojana (PMAY), has said that in Gujarat, which happens to be the Prime Minister’s home state, has quoted state officials as “confirming” that no progress towards tenure regularization, a key requirement for providing housing to the state’s slum dwellers. Stating that this particularly true of smaller town, the study, carried out by the non-profit Homes in the City (HIC), which is based in Bhuj, district headquarter of Kutch that saw a devastating earthquake in 2001, says, the failure to provide affordable housing is there despite the fact that there has been “significant demand” in all the 83 out of 153 Gujarat municipalities studied by experts involved in the study. According to the study, out f a total of 1.41 lakh demands for housing under the Beneficiary Led Construction (BLC) category, 94,232 (66.7%)

'Contractor-official nexus led to RTI activist's murder': Fact-finding team seeks probe

Courtyard inside of PWD office where Ranjeet Soni was killed Counterview Desk  A fact-finding team* visited Vidisha, Madhya Pradesh (MP) on June 19, 2022 to meet with the family of Ranjeet Soni, who was shot dead on June 2, 2022 inside the premises of the PWD office in Vidisha. The objective was to gather information about the circumstances surrounding the death of Ranjeet Soni and his work on exposing corruption through the use of the Right to Information (RTI) Act. A report prepared by the team members says that Ranjeet had been extensively using the RTI Act to access information from the government, and upon receiving documents showing misuse of public funds or corruption, he was filing complaints to various authorities including the Lokyukta, Publi Works Department (PWD) and the Chief Minister’s Office. It notes, Ranjeet used to work as a contractor and often undertook government works in collaboration with other contractors, including those being investigated for his murder. A f

Electricity Bill: Centre's reform measures contain 'carrot and stick package' for states

Counterview Desk  The Peoples’ Commission on Public Sector and Public Services (PCPSPS), claiming to be a network of eminent academics, jurists, erstwhile administrators, trade unionists and social activists, seeking consultations with stakeholders with those who are against the government’s decision to monetise, disinvest and privatise public assets/enterprises, has said that the proposed Electricity (Amendment) Bill-2022 will have far-reaching impacts on the finances of states. Insisting that the proposed Bill would lead to “assault on India’s federal structure”, in a statement, it says, it would weaken the finances of states’ power distribution companies, have adverse impact on utility employees, cripple the states' finances, impose a heavy cost burden on the smaller subsidized consumers (especially farmers), and benefit only corporate business houses. “States cannot afford to ignore the far-reaching implications of the Bill on their economy, finances, agricultural and industria