Prime Minister Narendra Modi has come out all guns blazing – slapping multiple data points on the faces of critics who are questioning India’s economic growth prospects under his government. Addressing Company Secretaries at the inauguration of the Golden Jubilee Year of ICSI, PM Modi slammed those who “spread the feeling of pessimism” and recounted instances in the past when GDP growth rate had fallen below the 5.7% mark that was recorded in Q1 of this fiscal year. While promising that his government would reverse the current slowdown, Modi said that 87 reforms have been carried out in 21 sectors in the last 3 years. In a presentation, PM Modi showed several data points and indicators to silence the economic doomsayers.
1. The real GDP growth rate at constant prices fell from 6.6% in 2011-12 to 5.5% in 2012-13 and then rose to 6.4% in 2013-14. In 2014-15 it was recorded at 7.5% and rose to as high as 8% in 2015-16 before the recent fall to 7.1% in 2016-17.
2. CPI inflation, according to government data, rose to as high as 9.9% in 2012-13 and remained above 9% in 2013-14 as well. In 2014-15 a sharp decline was witnessed with CPI inflation hitting 5.9% and then steadily declining from there on to as low as 4.5% in 2016-17. CPI inflation for 2017-18 is projected at 2.5%.
3. Fiscal deficit as a percentage of GDP was as high as 5.9% in 2011-12 and remained above 4.5% till 2014-15, while witnessing a decline. For 2016-17 it was at 3.5% as per the target of the government.
4. Foreign exchange reserves ranged between $290 billion to $300 billion during 2011 to 2014 FY end. At present they stand at $402 billion (figures up to September 2017).
5. The first quarter of the current financial year may have seen a dip in GPP growth numbers, but several indicators suggest that the second quarter is likely to be better. From 12% increase in sale of passenger cars and 23% rise in sale of commercial vehicles to 14% increase in domestic air traffic and 14% rise in telephone subscribers, PM Modi listed out multiple indicators that signal recovery.
6. From an annual railway construction of 1,475 kms in 2011-2012, the track construction has now risen to 2,855 kms in 2016-2017. The total length of new lines added in 2016-17 stands at 953 kms, more than double of what was added in 2011-12 (400 kms). Gauge conversion too has seen a big rise from 675 kms in 2011-12 to 1,020 kms in 2016-17.
7. Similarly, construction of national highways has gone up from 4,439 kms in 2010-11 to 8,231 in 2016-17. Not only that, the average road length constructed per day in rural areas has gone up substantially from 69 kms in 2013-14 to 130 kms in 2016-17. The government data also points to the fact the this parameter had actually seen a decline under UPA-II – from 85 kms in 2011-12 to 69 kms in 2013-14. The total length of roads constructed in rural areas has also gone up from 24,161 kms in 2012-13 to 47,447 kms in 2016-17, says the government.
Interestingly, the total funds released to states for construction of roads in rural areas fell substantially during the UPA-II regime – from Rs 15,809 crore in 2011-12 to Rs 4,389 crore in 2012-13, before rising marginally to Rs 5,360 crore in 2013-14. Under the NDA regime, the total funds released under Pradhan Mantri Gram Sadak Yojana rose from Rs 9,960 crore in 2014-15 to Rs 16,508 crore in 2016-17 – a growth of 65.7%.
8. Pointing to huge growth in investment for housing construction, the government has claimed that under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) only Rs 15,209 crore was invested in projects. This figure has risen massively to Rs 1,53,494 crore under Pradhan Mantri Awas Yojana Urban (PMAY Urban), says the government data. Yet another figure that stands out is that the number of units of houses approved for construction increased from 6,77,610 under JNNURM to 26,14,398 under PMAY (Urban).
10. Yet another indicator that has been cited is the number of loans disbursed to new entrepreneurs. The total number of new entrepreneurs added stands at 2,63,40,752, according to the government.
Data, they say speaks louder than rhetoric, and that goes for both the government and those in Opposition. The Narendra Modi government’s best weapon in the quarters to come would be a rise in GDP growth from its current low of 5.7%, so that it is able to validate its own belief that the present slowdown is only transient in nature.
In a presentation, PM Modi showed several data points and indicators to silence the economic doomsayers.
