(As the NDA government completes two years in power, The Quint brings for its readers ‘Modi@2’, a special series evaluating the performance of the current regime.)
Two years ago, Narendra Modi was elected to power for his promises of development and economic growth. He promised us free markets, deregulation and cutting down red tape. As his government completes two years, I am underwhelmed by what it has accomplished.
Finance Minister Arun Jaitley talks much about 7-8 percent real GDP growth rate, which he says is an achievement of Modi sarkar. Let us examine his claim closely. Near the end of UPA-II, in 2013, the growth rate was 4.7 percent. Modi and his party were quick to denounce the Manmohan Singh government for its poor performance. On assuming power, the Modi government implemented a new method of calculating real GDP (which is adjusted for change in prices). It shifted the base year from FY-2004 to FY-2012.
In layman’s terms, the government simply took away the effects of eight years of rising prices. If we were to take the base year as FY-2014, the growth rate today would be more than 10 percent, since price rise is much less in one year (from FY-2014 to FY-2015) as opposed to 11 years (FY-2004 to FY-2015).
This means that the 4.7 percent growth Manmohan Singh was lambasted for magically becomes 7 percent under the new method of calculation. This is almost the same as the current growth rate. Which means Modi and Jaitley achieved exactly nothing, apart from some statistical jugglery to mislead voters.