A lie gets halfway around the world before the truth has a chance to get its pants on - Winston Churchill
India's election season has seen apologists of the ruling party turn to statistical massaging, which does not err on the side of factual accuracies, but rather thrives on half-truths and cherry-picked data, and weaves them together to form a deceptive tapestry of lies and deceit. Recently, we encountered an article "It's the economy, stupid: How the Modi, Manmohan and Vajpayee years compare on growth front"exemplifying such atrocious distortion of data, a testament to the perilous depths to which manipulative agendas can sink in the realm of discourse. Here, we present a counter perspective on whose tenure -- NDA's or UPA's -- witnessed superior economic performance in India.
At the very outset, let us address the most germane question: Did India's economy outperform the global economy?
Without a doubt, yes. However, a nuanced examination unveils an intriguing pattern: India's relative growth superiority was more pronounced in the 2004-2013 era compared to 2014-2022.
One effective metric to assess this is by computing India's excess growth vis-à-vis the annual global growth rate. Surprisingly, India's surplus growth rate surpassed the world's rate by a greater margin during 2004-2013 than in the subsequent period, despite global growth decelerating from 2014 to 2022 when juxtaposed with the earlier span (See Figure 1 below).
This should neither be a surprise nor a matter of astonishment for economists given that the decadal growth rate of India was higher in UPA's tenure, notwithstanding the absurd level of optimism one hears now through frequent propaganda channels. However, the ultimate measure of a government's capability is not determined during periods of comfort or convenience, but rather when it is confronted with formidable challenges.
Assessing the comparative efficacy of the UPA and NDA administrations presents a formidable challenge, chiefly owing to the disparate challenges each encountered.
The UPA grappled with the tumultuous fallout of the 2008 Global Financial Crisis, while the NDA navigated the unprecedented complexities brought forth by a once-in-a-century pandemic. Each crisis precipitated unique ramifications, and the efficacy of national responses was contingent upon the intricacies and dimensions of the respective economic landscapes.
To discern India's comparative performance when it came to its annual growth trajectory, we juxtapose it with major economies such as the United States, the United Kingdom, Japan, Russia, and Germany. All economies faltered during both these crises, however India performed better as compared to these major economies during the 2008 crisis.
India, on the other hand, miserably failed and attained the ignominious status of being the worst-hit in the world during the Covid pandemic.
Suffice it to add that India's secular decline in its annual growth rate began much before the pandemic. Moreover, the humongous loss of human lives, estimated to be a staggering 4.7 million deaths by the WHO, stands in stark contrast to the officially announced 0.5 million deaths by a government celebrated for its luminous opacity.
The illustration in Figure 2 incontrovertibly refutes the fallacious narrative suggesting that India surpassed some advanced economies during the pandemic. In glaring contrast, India's economy nosedived into the ground and even went below those of the economies of the USA, UK and Russia.
At the core of every economy lie four critical pillars: private consumption, investment, government expenditure, and net exports, each playing a pivotal role in steering its trajectory. Throughout the NDA-II's administration, the substantial decline in private consumption growth underscored a concerning trend, wherein economic expansion became heavily reliant on fiscal stimulus measures. Private Final Consumption Expenditure stood at 68.6% in 2014 as against 60.3% in 2022-23. This dependency is glaringly evident in the escalating fiscal deficit and the debt-to-GDP ratio during NDA-II's tenure.
In fact, the investment landscape has deteriorated markedly since 2014, with Gross Fixed Capital Formation as a percentage of GDP witnessing a perceptible decline since the advent of so-called 'Ache Din'. Despite the NDA regime's largesse in the form of substantial tax cuts for corporations, notably in 2019 which led to tax revenue of approximately Rs 1,45,000 crore per annum being foregone, these measures have spectacularly failed to spur meaningful investment.
During the UPA era, the investment environment was predominantly conducive, serving as a significant catalyst for driving economic growth. In that period, export performance reflected a degree of resilience and growth momentum, buoyed by a favorable global economic environment and proactive trade policies.
However, under the NDA administration, despite sporadic efforts to stimulate export activity, the landscape presents a more precarious picture. Despite the depreciation of the rupee, the desired uptick in export activity has remained elusive. In fact, exports had started to decline from 2014 itself when there were hardly any geopolitical tensions or global headwinds. Even the much-hyped FDI as a percentage of GDP has come down to 0.5%; UPA did better.
The array of facts presented unequivocally paints a damning portrait of the NDA's abysmal performance in contrast to that of the UPA.
A disturbing data that probably appropriately manifests the farmers' protests, escalating joblessness and widening gulf between the haves and the have nots is the abysmal average GDP growth since 2019; it is just 4.2%.
However, if this appears as an overly harsh indictment, it is merely scratching the surface. A particularly ignominious milestone reached during the NDA's tenure is the unprecedented event where Bangladesh's per capita income eclipsed that of India's -- a bitter pill to swallow for a nation once considered a regional economic powerhouse. Despite the laudable decline in population growth rates from 1.69% in 2005 to a meagre 0.81% in 2023, India's per capita income has languished, further underscoring the NDA's woeful mismanagement of the economy.
Even during Vajpayee’s tenure, India's per capita income as a percentage of China's declined from 56% in 1996 to 41.3% in 2004. India'’s household savings have plummeted to their lowest level in 47 years. The inequality within India is alarming, with the top 1% possessing a larger share of income compared to their counterparts in the United States. In the flagrant age of unchecked crony capitalism, inequality in India is worse than during the times of the British Raj.
China achieved a remarkable feat by increasing its GDP from $2 trillion to $10 trillion within a span of 10 years. In contrast, during the NDA regime, India fell woefully short, reaching a sub-par average $3.75 trillion till 2023.This serves as a testament to the profound self-doubt and paucity of aspirational vision among our political leaders.
Statistics is a double-edged weapon; often it boomerangs, and then the jugglery is not funny anymore. It hurts.
(Sanjay Jha is a political analyst and former Congress leader. Co-author Snehasis Mukhopadhyay analyses data of political and economic trends.)
(Views are personal.)
