Economy

Modi’s ‘India Shining’ Moment is Here

There is a striking similarity in the economic performance of  both NDA governments – and their neglect of agrarian and rural distress.

President Ram Nath Kovind recently claimed that inequalities have reduced in the last few years. How true is this? Credit: PTI, Reuters.

President Ram Nath Kovind recently claimed that inequalities have reduced in the last few years. How true is this? Credit: PTI, Reuters.

President Ram Nath Kovind’s address to Parliament yesterday, which was essentially the Centre’s assessment of various policies, seems to have provided the ‘India Shining moment’ for the Narendra Modi government as it enters the final leg of its five year tenure. The broad message from the president’s address was that the Modi regime had delivered inclusive growth by deepening “economic democracy”.

In particular, he claimed that inequalities have reduced in the last few years, despite a recent Oxfam report that showed wealth concentration got skewed even more in favour of the rich in 2017, with 1% cornering 73% of all newly created wealth that year. The president also cited the opening of 31 crore Jan Dhan bank accounts as proof of economic inclusion and decentralisation.

However, moments after Kovind’s speech, came the Economic Survey which spoke some home truths, even contradicting claims made by the government. The survey candidly put out data showing how farmer’s real incomes were stagnant over the past four years and how rural wages had turned negative in real terms for a good portion of 2016. This clearly did not square with the claims made in the President’s address about reduced inequalities under the Modi regime. How can inequalities reduce if farm incomes and rural wages in general have remained the same over the last few years? You don’t have to be an economist to understand this.

And, all praise for Chief Economic Adviser Arvind Subramanian for not making huge leaps of interpretation on the current jobs scenario. In an indirect reference to recent data and a controversial debate kicked up by the number of additional organised sector workers registered in 2017-18 under the EPFO/NPS/ESIC schemes, the survey (which also uses GST data) merely argues that formal sector employment is possibly being under-counted in this country. Subramanian, however, is careful not to endorse the prime minister’s stupendous claim that 7 million new formal jobs were created in the organised sector in 2017-18 after the devastations caused in the small and micro sector by demonetisation and a messy GST.

By not mentioning any figure for new employment in 2017-18, the chief economic adviser smartly steers clear of the current controversy. He does this simply because he can’t compromise his own professional reputation at the altar of hyperbolic claims by Modi. It is these hyperbolic claims, some of which were made in the President’s address, that makes one wonder whether Modi’s “India shining moment” has arrived.

I choose the term “India shining moment” carefully because economic data during the five years of NDA I (1999-00 to 2003-04) as outlined by the Planning Commission, shows uncanny similarities in the broad macro numbers between then and now. The-then NDA government began with a GDP growth of 8% in its first full year of governance (1999-00). In the subsequent three financial years (2000-01 to 2002-03) there was a sharp decline in GDP growth rates to about 5% or less. This fall in GDP growth was mainly caused by a collapse in agriculture growth rate to zero in this period which is what is also happening with the NDA-II government now.

However, in the final year of NDA-I, GDP growth came back to 8%, giving rise in part to the “India Shining” campaign. Subramanian’s latest Economic Survey also predicts a sunny outlook for India now, projecting 7%-7.5% growth for the coming fiscal.

The India Shining campaign – launched back then by L.K. Advani and Pramod Mahajan and also characterised by improved stock market performance and general contentment amongst the well-off  – completely disregarded the distress in the rural and agriculture sector experienced for most of the five years of NDA-I.

One fears a repeat of history may be happening now.

The president’s address clearly indicates that the Modi government is entering the India Shining bubble a year before the start of 2019 Lok Sabha election campaign.

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  • Anjan Basu

    One hopes the electoral verdict that welcomed the champions of ‘India Shining’ in 2004 is waiting in the wings for Modi and his entourage as well. May,2019 is not really not far off from here.

    • Ek Aur India

      I hope so too but that welcome thrusted India into this coalition politics that has hurt India a lot. I was skeptic of Modi, have always been, but had hoped other sane voices within BJP would keep him in check. Sadly, those voices have been silenced. I don’t want another coalition but seems like thats what we are heading for. Our only option seems to be either Modi or Rahul and its not a good state to be in.

      • Anjan Basu

        True. Our choices are so limited!

  • Manish Kulkarni

    Sounds like a fantasy of 2004! So that modi government topple 🙂 Pessimism in hope mode to see something similar happens and it falls….

  • Anjan Basu

    Yes, that seems a distinct possibility now, and all this grand talk about ‘one nation one election’ is aimed at that only. Another massive fraud about to be perpetrated in the name of good governance and, as always, the nation stands yet again to be short-changed.

  • Amitabha Basu

    The previous NDA government of Vajpayee ignored the distress in the rural and agricultural sector and brazenly went forth with the slogan “India Shining”. The present Modi government is also doing the same thing, claiming a bright future for India in spite of the stagnation and decline in the rural, agricultural and informal sector incomes and absence of job creation. It is up to the people of India to give these jumlebaaz propagandists of ‘Acchey Din’ the reply that they deserve.

  • Ek Aur India

    so, now one can’t call a chaddi a chaddi? Btw, do check Gujarat results and that should tell you how your savior Modi won that election.

  • Ek Aur India

    It will be a mistake to compare India with China for a very simple reason. China has been a communist state for the majority of these 60 years. India was doing just fine until the 1980s but divisive politics has made us suffer a lot.

    About development, we have to understand one thing and that is infrastructure for the schemes you are referring to wasn’t built overnight. Credit should be given where its due, just like we call congress out for corruption. Point to one original scheme that Modi started in his time that has resulted in even mild level of success. Modi does have a lot of good ideas and he’s very good at promoting them but lack the skills to implement those ideas. Another way to look at it could be that BJP doesn’t have good administrators. If your own party members are point out something is wrong then one got to take a look inside rather than trying to spin it as Modi vs Rest. I would rather have Suresh Prabhu or Mrs. Sushma Swaraj as PM than Modi. Sure, they don’t beat the drum as loud as Modi but they do get the work done.

  • Ek Aur India

    Pretty sane and balanced comment. However, i’m afraid bhakts are going to jump all over you because of your name. Such a shame.

  • Ek Aur India

    May be its me getting older and having seen a Govt. or two. in the last 1980s there was politics of Aazad and VP Singh that relied on reservation and then came a string of Govts. that were stitched together at the seam. What i learnt from those experiences is that its the people that bring the change. If Modi was sincere there would have been less casualty in Godhara riots. I’m unsure why you think my wish is from Modi, its not. My hope is from citizens of India who do see Modi’s politics clearly but it will take time for them to reject it. Indians are very patient people, they are giving BJP a chance since India hasn’t seen such a strong salesman in politics in recent times.

  • Ek Aur India

    You are talking to a wall mate. Such folks don’t care about India. To them whats happening in India is about Congress Vs BJP and with their hate for Congress they are dragging the country down back to stone age. Bhakts don’t understand BJP’s think-tank on economy is made-up of traders. The very same traders that opposed FDI and liberalization because they were not ready to tackle competition from outside then in the name of disinvestment, when India was growing, PSUs were sold in front of everyone’s eyes for way less than they were worth and now we see in the name of development a select few have access to PMO and through it access to global Govts. Like you said, every view should be heard and debated but that can only happen when facts don’t change at the whim of a bhakt’s (BJP and Congress included) fancy.

    If we need any meaningful development we have to breakaway from this party mentality and Modi/Gandhi worship. Let’s hope that happens soon before we become a Siriya or Iraq.

  • Ek Aur India

    Yes, i have wondered what would it have been like to have a muslim or a dalit name in India and it does scare me. We certainly have made a lot of progress in last 70 years, despite claims by BJP that development really started in last 3 years, India still has that mindset that looks at muslims with doubts and at dalits with vengeance and for the lack of a better word low life. Yes, the seeds that have been sowed in the last few years will take decades to reverse.

    And, no gur shakkar for me please.