Modinomics
How the economic balance sheet of five years of the NDA government stacks up.
- Apr 1, 2019,
- Updated Apr 3, 2019 8:04 PM IST
When the 2014 elections were fought, there were a number of factors that gave Candidate Modi and the BJP an overwhelming edge.
One was the sagging economic record of the incumbent administration, the UPA2 government's inability to suggest any solution for that - and of course, the political paralysis. There were scandals and corruption allegations in key economic ministries.
Job creation had slowed, petrol and diesel prices had shot up, and inflation remained stubbornly high. Fiscal deficit was also high, as was the current account deficit, though the then Finance Minister P. Chidambaram was trying to tame it.
Apart from the BJP's ideology and grassroots army, Candidate Modi had a simple message that resonated with large sections of the electorate - the promise of Acche Din. Candidate Modi talked of development, creating jobs on priority, and stamping out corruption.
Now, as India prepares to vote again for the General Elections, how does Prime Minister Modi's economic scorecard read. What are the tasks that were achieved and which were not?
First, in terms of macro-economic indicators and stability, the Modi government's record has been largely enviable. With a little help from dropping crude oil prices in the first three years of his term, the Prime Minister and his Finance Minister Arun Jaitley brought down fiscal deficit (though the Fiscal Responsibility and Budget Management target was relaxed a bit last year). Not only has it brought inflation - both WPI and CPI - down, the CAD has also reached a more comfortable level.
The icing on the cake is the GDP growth. Despite the controversy over the revised methodology (and the back series recalculations), the majority of economists agree that India is easily one of the fastest growing major economies.
The big disappointment in the macro numbers is the rising unemployment. Despite the government's multiple moves to keep inconvenient data out (the NSSO report has still not officially been released at the time this magazine went to press, but the leaked report shows unemployment at a 45-year high), the fact is that multiple surveys, including CMIE's, have shown that unemployment is rising. The government's defence has been to tout the rising EPFO enrolment numbers, though that doesn't hold because of numerous problems with equating EPFO enrolment with jobs.
Among other achievements, the Modi government passed two economically significant laws - the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code (IBC). The government can also take credit for pushing forward infrastructure development, and for sorting out many problems in ministries as varied as coal and railways.
When the 2014 elections were fought, there were a number of factors that gave Candidate Modi and the BJP an overwhelming edge.
One was the sagging economic record of the incumbent administration, the UPA2 government's inability to suggest any solution for that - and of course, the political paralysis. There were scandals and corruption allegations in key economic ministries.
Job creation had slowed, petrol and diesel prices had shot up, and inflation remained stubbornly high. Fiscal deficit was also high, as was the current account deficit, though the then Finance Minister P. Chidambaram was trying to tame it.
Apart from the BJP's ideology and grassroots army, Candidate Modi had a simple message that resonated with large sections of the electorate - the promise of Acche Din. Candidate Modi talked of development, creating jobs on priority, and stamping out corruption.
Now, as India prepares to vote again for the General Elections, how does Prime Minister Modi's economic scorecard read. What are the tasks that were achieved and which were not?
First, in terms of macro-economic indicators and stability, the Modi government's record has been largely enviable. With a little help from dropping crude oil prices in the first three years of his term, the Prime Minister and his Finance Minister Arun Jaitley brought down fiscal deficit (though the Fiscal Responsibility and Budget Management target was relaxed a bit last year). Not only has it brought inflation - both WPI and CPI - down, the CAD has also reached a more comfortable level.
The icing on the cake is the GDP growth. Despite the controversy over the revised methodology (and the back series recalculations), the majority of economists agree that India is easily one of the fastest growing major economies.
The big disappointment in the macro numbers is the rising unemployment. Despite the government's multiple moves to keep inconvenient data out (the NSSO report has still not officially been released at the time this magazine went to press, but the leaked report shows unemployment at a 45-year high), the fact is that multiple surveys, including CMIE's, have shown that unemployment is rising. The government's defence has been to tout the rising EPFO enrolment numbers, though that doesn't hold because of numerous problems with equating EPFO enrolment with jobs.
Among other achievements, the Modi government passed two economically significant laws - the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code (IBC). The government can also take credit for pushing forward infrastructure development, and for sorting out many problems in ministries as varied as coal and railways.