The latest set of gross domestic product (GDP) numbers were released yesterday.
The Indian economy grew by 6.7 per cent during 2017-2018 and 7.7 per cent during the period January to March 2018. GDP growth is a representation of economic growth.
Soon after the GDP growth was declared, the official handle of the Bharatiya Janata Party (BJP) tweeted this:
After dark days of UPA, India story is rocking again… #SahiVikas pic.twitter.com/pBgQiacBqd
— BJP (@BJP4India) May 31, 2018
This is a classic example of cherry-picking data. The chart in the above tweet has only four data points, representing the economic growth or GDP growth, in the four quarters of 2017-2018, the last financial year.
Between April to June 2017, the GDP growth was at 5.6 per cent. Between July to September 2017, it was at 6.3 per cent. Between October to December 2017, the growth was at seven per cent and finally between January to March 2018, the growth was at 7.7 per cent.
This basically means that the rate of economic growth of the Indian economy has been improving over the last one year. And that is clearly good news.
But by taking data from April to June 2017 onwards, the BJP chart does not tell us how we got to a low growth rate of 5.6 per cent, in the first place. Let’s look at GDP growth data starting from April to June 2014, onwards, in Figure 1. Narendra Modi was sworn in as prime minister on May 26, 2014.
Figure 1:
By publishing data from April to June 2017 onwards, the BJP essentially manages to show a rate of economic growth (that is, GDP growth), which has been going up.
But if we look at data over the longer range of Modi’s tenure as prime minister that has clearly not been the case.
The economy grew by more than nine per cent during the period January to March 2016. After that, the growth slowed down dramatically. This slowdown was accentuated by the harebrained decision of demonetisation, in November 2016. The economic growth fell to a low of 5.6 per cent in April to June 2017.
All this did not happen during the United Progressive Alliance government, but pretty much while the Modi led-BJP was governing.
In fact, the situation was even worse, if we look at just the non-government part of the GDP, which forms close to 90 per cent of the economy. Take a look at Figure 2, which plots the non-government GDP growth from April to June 2014, onwards.
Source: Author calculations on data from Ministry of Statistics and Programme Implementation.
As can be seen from Figure 2, the non-government GDP growth fell from a high of 9.5 per cent during the period January to March 2016 to a low of 4.2 per cent during the period April to June 2017. Basically, the non-government GDP growth more than halved, in a period of less than 15 months and demonetisation was a major reason for it. Of course, the chart in the BJP tweet avoids this totally.
That is not something they want to tell the people of this country. What the BJP tweet also does not tell us is that the economic growth of 6.7 per cent during 2017-2018, was the slowest in the last four years, since Narendra Modi came to power.
Now let’s look at Figure 3, which basically plots the Indian GDP growth from April to June 2012, onwards. India moved to a new GDP series in January 2015 and this series has data only from April to June 2011, onwards. Hence, economic growth can be calculated only from April to June 2012, onwards.
Figure 3 makes it very clear that GDP growth after 2014 has been much better. This leads us to conclude that economic growth during the Modi years has been better than it was in the last few years of Manmohan Singh.
The trouble is that the new GDP series has data starting from April to June 2011 onwards. Hence, we cannot compare the economic growth during the full tenure of Manmohan Singh (May 2004 onwards) with that of the Modi years. Now only if the new GDP series had data going back to 2004, we could make a full comparison of the Manmohan Singh years, with that of Modi.
The data, as it is available right now, allows us only to compare the worst Manmohan Singh years, with the Modi years. And that is not a fair comparison.
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