The Many Economic Guarantees and Promises of the Modi Government

Prime Minister Narendra Modi said that India will "become the world’s third-largest economy" if he is elected for the third term. This is not the first time that this government's goalposts have shifted.

New Delhi: On a day when opposition parties under the ‘INDIA’ banner moved a no-confidence motion against his government, Prime Minister Narendra Modi said that India will “become the world’s third-largest economy” if he is elected for the third term.

“This is Modi’s guarantee,” Modi said, at the inauguration of the renovated India Trade Promotion Organisation complex at the national capital’s Pragati Maidan.

Several have since pointed out that this does not exactly mean that the Modi government will have to work especially hard to fulfil the promise.

“India’s Gross Domestic Product was set to become number three by all predictions in 2022,” journalist Pankaj Pachauri tweeted.

Pachauri has cited a Fortune chart of 2022, which said that by 2030, India’s will be the third largest economy, with China and US in first and second positions respectively.

Citing another projection, by Statista, Pachauri has said that the Indian economy was to have become third largest in 2024 but that Modi’s promise of this occurring in the course of his possible third term pushes the deadline to 2027.

As also pointed out by The Wire‘s founding editor M.K. Venu, India’s is already the third largest GDP in the world in purchasing power parity or PPP terms. This has been in spite of the fact that India has seen “below potential growth” in the last nine years, Venu added.

Both Pachauri and Venu noted, more importantly, that Modi’s latest words reflected the trend of him forever shifting economic goal posts.

‘$5-trillion economy’

A case in point is that in 2019, Modi himself had envisioned that India would become a “$5 trillion economy by 2024-2025.” His promise was featured multiple times as he sought and won a second time in office.

“It is important to know about this because there are some people who doubt the capabilities of Indians. They are saying it is very difficult for India to achieve this goal. However, it would be a matter of courage, of new possibilities, of the sacrificial fire of development, of serving Maa Bharati, and dreaming of New India. These dreams are largely linked to the goal of $5 trillion economy,” Modi had said.

However, in mid-June, 2023, Union finance minister Nirmala Sitharaman’s office tweeted that India’s GDP had touched the $3.75 trillion mark in 2023. This would mean that the government’s $5-trillion figure is still a long way off and quite difficult considering the 2024-25 deadline.

Sitharaman is not the only government figure who has spoken of trillion figures that fall short of Modi’s initial ‘$5-trillion economy’ claim.

While Sitharaman’s tweet mentioned $3.75 trillion, India’s chief economic advisor V. Anantha Nageswaran had earlier in the year said that the Indian economy will be a “$3 trillion one at current prices by the end of the 2022-23 fiscal year”. Nageswaran also said that it is expected to touch the $7-trillion mark “in the next seven years.”

As The Wire has reported earlier, Bibek Debroy, chairman of the Economic Advisory Council to the Prime Minister has said this year that India’s GDP will be close to $20 trillion by 2047.

In December last year, external affairs minister S. Jaishankar said that India will only become a $5 trillion economy – by 2025, echoing what Union home minister Amit Shah had said in November of that year.

Last year saw the likes of Union oil minister Hardeep Singh Puri (‘$10 trillion economy by 2030‘), junior Union minister for Electronics and Information Technology Rajeev Chandrasekhar (‘poised to be a trillion dollar digital economy‘) and Niti Aayog Vice-Chairman Rajiv Kumar all mentioning various trillion figures.

Also read: Jobs, Justice and Smart Cities: The Promises BJP Made in Its 2014 Manifesto

Other promises 

The $5-trillion dollar economy promise is not the only one that Modi has unveiled. From time to time, he has made others in the sector.

In 2017, he promised to end what had then proven to be a crippling economic blockade launched by United Naga Council in Manipur if the Bharatiya Janata Party came to power in the state the assembly election, which it did. The blockade was also lifted in March.

In 2016, Modi had promised to double farmers’ income by 2022, at a rally in Bareilly of Uttar Pradesh. Talk of this has died down now.

Prior to election in 2014, Modi and the BJP had promised that each person’s bank account would be credited with Rs 15 lakh if they came to power. This did not come to pass, with a Ranchi court even opening proceedings by a petitioner who held them culpable for reneging on this promise.

While stressing the government’s resolve to bring food prices under check, Modi, in 2014, had said, “No person should go to bed hungry.”

“We have promised to control inflation. We are determined achieve this target,” he had said. “We will do this (control inflation) not only because it is our election promise but we want every poor to have access to food,” he had said.

However, during his term, India fared worse than other South Asian countries such as Pakistan, Nepal, Bangladesh and Sri Lanka in the global hunger index.

Unemployment climbed to a 45-year high in 2017-18. It hasn’t got any better since. Mahesh Vyas, chief of Centre for Monitoring Indian Economy, had told The Wire that India’s workforce – which is usually understood as the set of people who are employed – is not rising. He added that the quality of jobs in India is very low.

While the Modi government is betting on infrastructure creation to reach the trillion dollar target, many people don’t have access to any toilets, and rising fuel prices have undone the benefits of LPG subsidy.