Government in denial, economy in distress

Economists have pointed out that private investment, private consumption and exports have stalled. There are ways and means to accelerate exports, stimulate private investment and encourage more consumption. As long as the government is in denial of the weaknesses and threats it cannot find the strengths and the opportunities

THERE ARE ECONOMISTS and economists. There are also bank economists. If you believe some economists, nothing is wrong with India's economy or its management and, even better, nothing can go wrong ever. If you believe bank economists, RBI is in heaven and all is well with India's economy (until the RBI drops a hint to the contrary). I wish they were as true as they are loyal.

On October 1, 2023, we stepped into the last half year of the present government that will complete 10 years on May 30,2024.April and May 2024 will be a virtual holiday for governance. It is therefore a good time to review the state of the economy. In a developing country like India, the GDP growth rate is the one number, more than any other metric, that reflects the state of the economy. Let me therefore begin with the growth rate in the ten years of BJP's rule.According to NSO's figures, in the first nine years the average growth rate was 5.7%. Adding the growth rate projected by the government of 6.5% in 2023-24, the average for the ten years will be 5.8%. Compare this to the growth rates achieved under UPA-I and UPA-II. The average of the five years of UPA-I was 8.5% and the average of the ten years of UPA-I and UPA-II was 7.5%.

Some economists may dismiss the decline of 1.8% as inconsequential. That would be completely wrong.