How is Indian economy today under Mr.Modi?

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Modi Govt. completes 10 year term and India will go to polls shortly. There were lot of claims about Indian economic miracle under Mr.Modi in the last 10 years. Mr.Modi himself appears on screens and claims those economic growth rates as his achievement.

As neutral observer we need to do a reality check on the economic growth rate by examining the three conclusions that emerge today based on data published by the Indian National Statistical Office. This helps us to analyse the Modi government’s economic performance as disclosed in Parliament and subsequently published in the media.

Before going into detail we can consider the plus points of Modi Government in the last 10 years.

There are many plus points in Modi Govt. It has showcased that it is not policy paralysed regime that was marked in the last stages of previous Congress Government. It is decisive Govt., right or wrong, policies are taken quickly. We dont talk here about legitimacy or correct decisions. Just taking fast decisions: examples are overnight demonetisation, GST implementation, signing of defence treaties with many Governments , abrogation of article 370, the recent navy actions to rescue foreign merchant ships from pirates, BRICS currency initiatives, the success of efforts to isolate Pakistan from World Countries.

To put it in proper perspective – some of the above decisions are total failures. One example is Demonetisation . A transparent Govt. would have discussed neutrally about the good and bad of the decisions and explained to the Public the circumstances and reasons for taking that decision and the lessons learnt and what are the alternatives that it is doing now. The complaint that Prime Minister never faces any interview from neutral media is highlighted to show him as Autocrat, who comes out and talks just one sided as normal autocrats do. In western counties democracy means, anybody can question even the top in govt.

Reality of Economic Data

Now Let us consider economics alone. Modi Govt took charge in 2014. As per the data, India’s GDP growth rate declined annually from 2016-17, and fell below 3.5% in the fourth quarter of 2019-20. Financial heavy weights in Mr.Modi’s own party including Dr.Swamy acknowledge the realities of Four-year continuous decline from a 7% growth rate to 3.5% rate. But this has never been acknowledged by the government. A 6%-8% per year growth rate over a 15-year period of 1991-96 to 2004-2014 (with the usual cyclical ups and downs)came through mainly because of Mr.Modi’s opposition party Congress’s Prime mInisters’ Rao and Dr. Singh – they reduced state participation, and increased incentives for capital and labour providers, and achieved a higher and faster growth rate.

Did Modinomics continue with the growth rate of Congress regimes?

Since Mr. Modi assumed office statistics show serious and continuous decline in the GDP growth rate. The decline had began in 2016 and continues even today. The Modi government’s propaganda and reality as per statistics are two entirely opposite spectrum showing the failure of Modinomics to structure economic policy coherently. Dr. Swamy writes to say “Incoherence prevailed during the 2014-2023 period and will perhaps continue in the future as well.”

While GDP growth rate is in decline from 2016, the announcements of rosy predictions and claims are consistently made by Mr. Modi. Former Harvard Economic Professor and former Indian Finance Minister from Modi’s own party has this to say: “A claim made in 2019 was that India will become a $5 trillion economy by 2024. This implied a doubling of the GDP in five years or, in other words, a 15% annual growth rate of GDP. There has been no policy structuring presented to achieve this aim nor has anyone in the government shown willingness to debate it on public fora.”

The GDP growth rate between 2019-20 and 2022-23, in two normal years, works out to less than 4% per year.

Success or failure of Modinomics?

It seems, the announced macroeconomic goal/s have NOT been achieved by the government till date. “Modinomics” experts even call as an unstructured flop.

In an ideal market system with minimal regulation and transparency, that provides incentives for domestic savings if directed towards innovation and productivity GDP can grow at good rates. Govt’s affirmative action, provision of social security and safety nets are essential for equally growing economy. Skewed and distorted growth happens when large masses in the lower rung in the system are ignored without a level playing field. Govt should aim at creation of hope, accountability, trusteeship [philanthropy] as well as corporate governance to legitimise profit-making that will drive the market system. But Modi Govt failed to recognise this fact in its entire 10 year term. The genuine struggling farmers’ agitations and the Modi Govt’s attitude to be stubborn is unheard of in Indias politics. Modi Govt fails to intervene to provide for safety nets with affirmative action hence market failures happen thus creating a level-playing field. So even otherwise active Government model but with hands off attitude to the marginalised can be disastrous as proven in the last 10 years.

History of democracy change to Autocracy

There is also a consideration necesary to look back how historically Dictatorships started for Russia, Germany or China at the time of Economic declines and when Govts. could not think about the whole of the country and constrained themselves to the top creamy sections.

Dictatorships enforce deprival of human rights and democratic values. The current situation of a)economic decline in GDP terms b)heavy expenditure on Defence c)oppression of opposition parties using govt agencies, d)religious politics, e) gubernarorials political opportunism by forcing opposition ruled state legislators into inaction (by not signing off legislative bills and other means) f) Repeated and mostly successful attempts for executive branch to take control of all independent agencies including Election Commission g) Govt wresting control of appointments to Supreme Court that already diluted Judicial arms’ autonomy is making India vulnerable to slide to autocracy so what has happened in Russia/Germany/China – all these may have already started the slide of India from democracy to dictatorship . But the Modi Government surely is concerned about India but erred in its focus on retaining power, that weakened its cause of making India stronger in the long term. We believe that Mr.Modi’s stated objective of India first is genuine – So for the benefit of India, for saving India from falling into dictatorship and chaos Modi Govt should change its style of operation and focus and strengthening Democratic institutions and neutral agencies and remove fear element forced on everyone by use of Government agencies. Open up discussion on public fora on all Government actions and have listening ears to Media and Social Media to correct their decisions and actions. A formal acknowledgement on the failure of Demonetisation decision is a starting point for the change of heart regime. Promise of more openness in Government and fair discussion before taking decisions can follow it up. To boost his image Mr. Modi can give 10 or 20 Neutral Media interviews – not just talking about what my Govt did, please he needs to just listen to the questions and answer straightforward.

The views in this article are that of the author – Natarajan S

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