“No dream is too big. No challenge is too great. Nothing we want for our future is beyond our reach.”
– Donald Trump
The new data on GDP growth, published last week, have predictably set off a political storm. The data computed by the Central Statistics Office (CSO) and released by the Niti Aayog show that India never really grew in double-digits in 2010-11 and economy grew at an average of 6.7 per cent between 2005-06 to 2008-09 as well as between 2009-10 to 2013-14. It so happens that this period covers the two terms of the Congress-led United Progressive Alliance (UPA) government. The data shows sharp revisions, especially in 2007-08 and 2010-11, with the growth rate being scaled down from a high of 10.3 per cent in 2010-11 to 8.5 per cent. This trashed the UPA claim of a 10.3 per cent growth during the Manmohan Singh government. With months to go before the 2019 Lok Sabha elections, this downgrading of growth figures has angered the Congress which has often claimed credit for the stewardship of the economy during those high growth years. The Congress that led the previous government sees a “malicious and fraudulent jugglery of figures” by the present government to reduce the shine of economic growth claimed by its predecessor. Gross Domestic Product (GDP) is the total value of goods and services produced in a country in a year. GDP is cited as the “best aggregate measure of economic activity,” a nation has.
The new back series data show two things – (a) India never remained unaffected by the slide in global economy during the years of the financial crisis (2008-10), unlike what was earlier believed, (b) The country recorded a much lower growth rate than what was publicised. Although former Finance Minister P Chidambaram has downplayed the whole exercise and dubbed the new data a bad joke, Congress has to accept the reality. But both NDA and UPA need remember that growth alone does not testify to good economic management — GDP’s stress is exclusively on quantity, with no regard to quality.
At a time when the country’s politicians from Prime Minister to Opposition leader are sweating out in view of the assembly elections in some states and are raising economic issues in their speeches, there are two good news which would make the powers-that-be proud of. Firstly, the Indian rupee, which has been continuously sliding vis-a-vis US dollar for past some months, has made some recovery and secondly, the price of petroleum products, especially petrol and diesel, has softened and has touched the lowest level in the past three months. The direct impact of these two developments are that there fewer chances of a price-hike across commodities and inflation going up. Amid the rising oil prices, there were renewed concerns that the inflation will go up. Thanks to timely intervention of the RBI the inflation has remained tamed at below 4 per cent.