With its five-year term drawing to a close, the outgoing government under Narendra Modi will be known for the economic decisions it took, for better or worse. Demonetisation, Goods and Services Tax, Insolvency and Bankruptcy Code, India rising among its peers in terms of economy, and much more happened during the past five years of the Modi government.
But PM Modi's predecessor, Manmohan Singh, is regarded as a capable economist. India's GDP growth rate in 2010-11, which falls during his second term as the Prime Minister, is the highest recorded, even after the recalibrated GDP data. Recalculated data shows Indian economy growing faster under the Modi government, though. On the question of which of the two Prime Ministers, Narendra Modi or Manmohan Singh, guided the Indian economy better, here is what the numbers reveal:
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Jobs
Job creation has been a longstanding challenge for the Modi government despite several initiatives to tackle it. Available data shows that unemployment rate has maintained an upward trend between June 2017 and December 2018. Notably, CMIE started collecting job data extensively only a couple of years back and EPFO payroll data started from September 2017, which means there are no concrete numbers depicting job creation during the Manmohan Singh era.
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Gross Domestic Product
Recalculated GDP data shows Indian economy growing 0.6 per cent faster under PM Modi as opposed to time during the UPA-II government, but it is still a long way from attaining double digit growth. Manmohan Singh did achieve this milestone during his tenure, crossing the 10 per cent-mark during 2010-11, followed by a substantial decline in the next fiscal. While recalculated data brought it down to 8.5.
Fiscal Deficit
Numbers show that Modi govt substantially more fiscally prudent. The average fiscal deficit growth rate under PM Modi has been 1.7% lower than what was reported during Manmohan Singh's tenure. This can be attributed to the spike in fiscal deficit during the third year of UPA-II government.
Bad Loans
During the Narendra Modi era, bad loans have remained a thorn in the side of Indian banking industry, something the ruling BJP has openly blamed the Manmohan Singh government for. The fact remains, though, that Non Performing Assets (NPAs) have skyrocketed 321 per cent between 2014-15, when Modi government came into power, and 2017-18. The total advances, meanwhile, have grown by a little over 12 per cent during this period.
Foreign Portfolio Investment and Foreign Direct Investment
Narendra Modi government was able to bring in 50 per cent more foreign direct investment during only four years of its tenure as compared to the five of UPA-II government under Manmohan Singh. The FDI inflow, which started strong in the initial days of the Modi government, had reached a plateau in its second and third year and taken a downward trend by the fourth year. The FDI numbers for the fifth year have not been released yet. Meanwhile, Indian economy saw 40 per cent more foreign portfolio investment during Singh's second term. However, FPI numbers for the fifth year of Modi government are still awaited. Given the upward trend FPI has maintained since Modi's second year in office, it will be interesting to see whether it can match the level during the Manmohan Singh government.
Exports and Imports
While goods exports have remained flat under the Modi government, services exports have increased 50 per cent. By its fourth year, the incumbent government has managed to gain some ground in terms of exports as compared to the previous regime. On the other hand, while moderate crude oil prices have helped Narendra Modi keep the import bill under control, it has overstepped the numbers posted by the UPA-II government.
New Projects, Stalled Projects, and Completed Projects
Numbers denote that new project announcements have fallen by 12 per cent under the Modi government, whereas stalled projects have increased 34 per cent. The silver lining is that completed projects have increased 38 per cent under the incumbent government. Weighed down by factors including policy uncertainties and increasing bad loans, the investments have taken a hit across the board during the previous quarter of current fiscal, according to a report by CMIE.
National Debt
There is good news and bad news for the Modi government on the front of national debt. The present regime has reported national debt growing 3% slower as opposed to the Manmohan Singh government from 2009-2014. However, the Modi government is paying 0.3 per cent higher rate of interest.
Edited by Vivek Punj
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