The state of the Indian economy today and its prospects have to be based on mathematics and statistics. We can get a reality check on the economic growth rate by examining the three conclusions that emerge today based on data published by the National Statistical Office. This helps us analyse the Modi government’s economic performance as disclosed in Parliament and subsequently published in the media.
What the data say
First, India’s GDP growth rate declined annually from 2016-17, and fell below 3.5% in the fourth quarter of 2019-20. This four-year continuous decline from a 7% growth rate to 3.5% rate has never been acknowledged by the government. Second, it is essential to recognise that since 2020, Prime Minister Narendra Modi’s widely publicised ‘vikas’ or development model in reality achieved the so-called “Hindu rate of growth” in GDP, which had been “achieved” during the Congress’s socialist period of 1950-77. Third, in P.V. Narasimha Rao’s and Manmohan Singh’s tenures as Prime Minister, India departed from the socialist path and the GDP growth rates rose for the first time to 6%-8% per year and over a 15-year period i.e., between 1991-96 and 2004-2014 (with the usual cyclical ups and downs). That is, it took Rao and Dr. Singh to understand and reform the Indian economic system, reduce state participation, and increase incentives for capital and labour providers, and achieve a higher and faster growth rate.
