MIXED SENTIMENTS

The Centre may have won the perception war on handling the Indian economy, but jobs and price rise remain issues of huge concern

- M.G. ARUN

When it comes to the economy, the Narendra Modi government has had a rough three years since 2020. First, there were was Covid-19, which led to lockdowns that crippled businesses and threw millions out of jobs. Then, when it seemed as though the pandemic had receded, Russia’s invasion of Ukraine in February 2022 sparked global geopolitical tensions, resulting in high inflation and food shortage in several parts of the world. Fuel and commodity prices skyrocketed, especially in the initial months of the war, and India’s import bill ballooned. Though oil prices have cooled since as a recessionary threat looms in the US and parts of Europe, India’s fiscal deficit, or the difference between the country’s in come and expenditure, has widened. The trade deficit (difference in the value of exports and imports) widened as well, to $23.89 billion (Rs 1.94 lakh crore) in December compared to the same month a year ago, as the rupee weakened and exports fell. The rupee breached the 80 to a dollar mark in July for the first time and hasn’t recovered since, while exports contracted 12.2 per cent y-o-y in December.

These then serve as a report card of the Modi government’s performance in the economic sphere. The recent advance estimates of GDP growth for the current financial year peg it at 7 per cent, led mostly by the post-pandemic resumption of the services sector. India remains the world’s fastest-growing economy, but has to grow at 8 per cent or more to create enough jobs to absorb the millions who enter the labour market every year.