In terms of economic growth, the NDA has a distinct edge over UPA. This reality cannot be camouflaged by sheer window-dressing of numbers
In 2015, the Narendra Modi Government switched over to generate data on growth in GDP at factor cost using 2011-12 as the base year (instead of the extant practice of base year 2004-05). Under this methodology, growth for the first four years of its stint was 7.4 per cent for 2014-15; 8.2 per cent for 2015-16; 7.1 per cent for 2016-17; 6.7 per cent for 2017-18. Meanwhile, a committee on Real Sector Statistics under Sudipto Mundle, set up by the National Statistical Commission (NSC), has come out with data for the past period (new series) using the new base year 2011-12. Under this, the projected growth during 2004-05 to 2013-14 was marginally higher than the growth under the previous base year 2004-05. The NSC has not yet accepted the report. Yet, senior Congress leader P Chidambaram jumped in to argue that the average GDP growth during UPA-I and II stood at 8.3 and 7.6 per cent, which was higher than the average growth during NDA-I at 5.7 per cent and during the first four years of NDA-II at 7.3 per cent.
Above statistics are amenable to multiple interpretations. Chidambaram appears to have used the figures to the hilt in trying to demonstrate that the economy under a decade of the UPA regime had done much better than under the NDA I and II. It was an unfruitful attempt. To gauge the economy merely by looking at the average growth in GDP over a period of time can be misleading. To get a realistic picture, it is necessary to look at yearly growth. Other crucial parameters, such as inflation, fiscal deficit (FD), current account deficit (CAD) and creation of jobs cannot be brushed aside. The NDA-I under Vajpayee ended its term with a GDP growth of 8.3 per cent during 2003-04. Inflation was in single digit (less than five per cent) and the twin deficits (FD/CAD) within prudential limits (during 2001-02 to 2003-04, it ran CA surplus even as FD in 2003-04 was 4.7 per cent). This despite an external hostile environment viz the US-led sanctions following the Pokhran-II nuclear test in 1998, the dotcom bust in 2000 and effect of the East Asian financial crisis of 1997-98.
The best thing Vajpayee did was to introduce structural reforms, which laid the foundation for rapid growth in the times to come. These reforms included launching of the Golden Quadrilateral; policies for triggering telecom revolution, rationalisation of fertiliser and petroleum subsidies; strategic sale/disinvestment of public sector undertakings (PSU); passage of the Fiscal Responsibility and Budget Management Act; and the launch of a new exploration and licensing policy which acted as the springboard for a big boost to production of oil and gas. Under the UPA-I, growth was good and stood at 9.5 per cent and 9.6 per cent (10/10.08 per cent as per new series). But the foundation for this was laid during NDA-I, especially the highways and rural road projects boosted demand. Besides, a booming world economy led to a surge in exports. Thereafter, in the wake of global financial crisis, growth started tapering and plunged to 6.7 per cent in 2008-09. Beginning 2008-09, the Government completely abandoned fiscal discipline even as it indulged in reckless spending, including skyrocketing subsidies. As a result, FD rose to a high of 8.9 per cent. Even worse, it goaded banks to lend indiscriminately to industrialists favored by corrupt politicians. The loans given during 2008-2014 were more than twice the cumulative amount lent till 2008. A good slice of these turned into non-performing assets (NPA).
The revival during 2009-10/2010-11 to 8.5/9 per cent (8.6/9.5 per cent in the new series) was due to this artificial boost in demand. It was short-lived. The following three years saw deceleration in growth to six per cent in 2011-12 and further to less than five per cent in 2012-13/2013-14 (around six per cent in the new series). Inflation was in double digit — greater than 10 per cent high CAD of 4.8 per cent. In regards to jobs, during 1999-2000 to 2003-04, around 60 million new jobs were created. Against this, during 2004-05 to 2011-12, only 14.6 million jobs were created. This translates to 1.8 million per annum under the UPA against 12 million per annum under the NDA-I.
Under NDA-II, GDP growth was 7.4 per cent IN 2014-15; 8.2 per cent IN2015-16; 7.1 per cent IN 2016-17; 6.7 per cent in 2017-18 (during current year, this is expected to be 7.5 per cent). This is a splendid achievement considering that Modi inherited a fragile economy and was confronted with a global slowdown. Much ado has been about the alleged detrimental effect of demonetisation and the implementation of GST. Doomsayers have been proved wrong. The last two years when their impact ought to have been felt the most have recorded growth of around seven per cent. With this short-term disruptive effect (albeit marginal) overall, the economy is well-poised on a sustainable growth path. During the first four years of NDA-II, inflation has consistently remained below five per cent and FD was in sync with the target for first three years. In 2017-18, this was 3.5 per cent — a slight deviation from the target 3.2 per cent. CAD has remained well below two per cent. Even in regards to jobs, as amply demonstrated with full facts by Modi during his reply to a debate on no-confidence motion on July 20, — over 10 million jobs were added during 2017-18 alone as against about 14 million under the UPA. All through, the NDA had a distinct edge over the UPA. This reality cannot be camouflaged by sheer window-dressing of numbers. The Congress has made a failed attempt to hoodwink the public.
(The writer is a freelance journalist)