File photo of PM Narendra Modi | Paul Miller/Bloomberg
File photo of PM Narendra Modi | Paul Miller/Bloomberg
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Five years after Narendra Modi swept to power in a landslide election victory, and as he again faces the voters, we should ask: has he delivered on his campaign promises of Acche Din and “minimum government, maximum governance”?

In 2014, most commentators, and I include myself, didn’t interrogate Modi’s promises carefully enough, allowing him to get away with catchy slogans that may not have had any substance in them. Be that as it may, it’s incumbent on us now to move beyond the marketing, at which this government excels, and examine its record.

Start with the shiny new Gross Domestic Product (GDP) statistics, which would have you believe that the fastest growth under this government happened in the year of the disruptive shock of demonetisation. Serious economists and now even the International Monetary Fund for the first time have questioned this data. Even if we buy them, 7% growth should be seen as a baseline scenario and not a success. Meanwhile, all other indicators point to an economy stuck in the mud.

Consider Modi’s promise of making India a global trade and manufacturing hub. The reality is that the trade to GDP ratio peaked in 2012 in the supposedly bad old days of the United Progressive Alliance (UPA) and has been trending down ever since. It’s now as low as 44%. Likewise, foreign direct investment (FDI) as a share of GDP peaked at 3% in 2008-9 under the UPA and is hovering a little above 2% under Modi. India has actually been de-globalising on Modi’s watch, made worse by the ham-handed return to protectionism and import substitution which was tried for decades and then discarded in 1991.

In the latter days of the UPA, Modi and the Bharatiya Janata Party (BJP) made political hay from the fact that the rupee was going down against the US dollar. Modi even joked that the rupee was in the Intensive Care Unit (ICU). The truth is, even at the height of the “taper crisis” in 2013, the exchange rate stood at 63.6. Today it’s roughly at 69. If the rupee was in the ICU in 2013, it’s now officially dead and buried.


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Before the 2014 election, Modi was widely hailed by the markets for his supposedly pro-business stance. But the reality is that the Modi government has interfered more with business and commerce even than the UPA, exemplified by the cumbersome and botched GST implementation. Consider that the NIFTY 500 corporate profit to GDP ratio has been sliding ever since Modi and the BJP took power, and is at a 15 year low, even worse than under the UPA in 2013.

Likewise, news headlines screaming that the Sensex is hitting record highs misses the fact that annualised average total returns were 8.5% from 2010-2013 and have risen only to 9.1% from 2015-2018, a tiny difference.

As for demonetisation, it utterly failed to achieve its goals to reduce corruption, increase tax compliance and move to a less cash driven economy. The main impact was negative: to cause lasting damage to the large informal sector.

Yet, perhaps the most insidious and long lasting damage wrought by the BJP in the past five years is the degradation of institutions, to the point where they’ve been politicised beyond recognition — everything from the armed forces to the central bank. Institutions in India have always been weak, but far from strengthening them, as his campaign rhetoric suggested he would do, Modi has done more to capture institutions than the UPA ever did.


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With such a bleak record, it is no wonder that the BJP has returned to communal politics like never before, openly pushing a Hindu supremacist agenda.

If the BJP’s 2014 election campaign was marked by a narrative of hope, aspiration and change, its 2019 counterpart has been angry and polarising. Voters have to ask themselves why, and what this ugly campaign foretells for the nation if the BJP wins again.

Rupa Subramanya is an economist based in Mumbai

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9 Comments Share Your Views

9 COMMENTS

  1. Frankly I am disappointed to how this article is written without wetting figures, sad authors here in India mostly wish to write an article mainky based on assumptions and some uninformed persons views…. Hope this could be corrected in future by most of our news writers..

    Also while interviewing anyone, author must ask specific pointed questions on country progress, though they wish to digress your question. GDP growth, deficit, infrastructure, ports, communications, jobs which are growth drivers.

    We don’t have capable leaders who are strong administrators who can make changes visible to majority, mostly political leaders win elections based on swaying poor people to their advantage..

  2. Rupa’s credentials as an economist should be put under a scanner. Her analysis that Sensex growth from 8.5 % to 9.1 % is a small achievement is just laughable. Such growth will be envied by any investor in other parts of the world. Re GST implementation, if anyone is to be criticized, it is the administrative system, not the policymakers. It is to the credit of the Government to have thought of bringing this into force and more people in tax paying net. It took 13 years and three elections for GST to put in place in Australia. When journalists lose their objectivity and present their biased views, .they lose credibility and bring a bad name to the profession. This is happeniing on either side of politics on a large scale in this election environment.

  3. This rant, that is sought to be passed off as ‘analysis’ ignores some telling points. During UPA’s time, there was indiscriminate lending, thanks to which NPAs rose to dizzy heights. When banks were forced to recognize NPAs, they were unable to lend further, leading to a credit squeeze in the market. The economy did suffer, but whose fault was it? Add to this, the first two years of BJP were drought years, and later, the global economy became very tough, affecting exports. Still, exports in 2018-19 were a record, higher than the previous record in 2013-14. As for agriculture, the problem is handsome growth due to easy availability of inputs, like fertilizers (neem coating of urea stopped illegal diversion of subsidized fertilisers to chemical indutries). In a sluggish economy, which was due to reasons stated earlier, the market demand did not rise enough to absorb the higher agricultural output — hence fall in prices (and low food inflation) and farmers distress. Now is the time to correct it and I’m sure the govt will — they are talking of freer exports of agri products. People talk about unemployment in data vacuum, but don’t realize that lot of entrepreneural employment doesn’t get counted as ‘jobs’.
    The author says she is an economist, then she should know that it is very easy to achieve–or ‘buy’ — growth in the short term — by, say, slashing taxes, splurging on subsidies, and flooding the economy with cheap credit. This is what Chidambaram did. But inevitably this will come back and bite you (as now), because when fiscal deficit soars, it affects every corner of the economy. That is the phase we are in.
    The BJP has done an excellent job of turning around the economy, the effect of which will be felt in the next five years. You can’t see a strong foundation, you can only see a nice, tall building. The last five years were spent in laying the foundation. Any intelligent person will be able to see that.
    As for Hindutva, well, elections are not fought on economy, they are fought on the sentiments of people. As for polarisation, it is stupid to believe that only BJP polarises and others don’t. When Manmohan Singh said that the first right on the resources of India is with Muslims, was he not polarising?

  4. rupa is spot on especially when it comes to ham handed sanghi economics about import substitution. Medium businesses and manufacturing has seen no benefits from modi regime. There is huge joblessness, fake statistics, and even as sushma swaraj recently revealed, no casualties in balakot – which is corroborated by all the international observers. You can be sure that indira gandhi would never have faked an embarrasment like balakot, which Modi has faked.

  5. Usual rants from those who are feeling out of place in a regime free of scams, devoid of privileges to mediamen and other ecosyatem. Rupa should tell the readers how better she qould have implemented the GST better than this govt. Demo broke the back of corrupt congress eco system and hence its obvious that Rupa will criticise Modi for it. All the opposition is because a man is honestly trying to steer his country in the right direction. The people who were used to laviah onboard parties and free foreign junkets have now nowhere to go. The money has stopped coming from the establishment and hence the atray dogs are barking.

  6. I think the author has no idea about Indian Economy nor about Indian socio-cultural inheritance. Indian pseudo liberals and half intellectuals have ruined both in past 60-70 years. Real Indian economy stared sprouting only from 2014 when Modi took over reins of power. Can the author tell me was India a economically strong and culturally vibrant country before 2014. In fact before 2014 India was a ignored country . No country even bothered to factor India in any socio-economic engagement. Thanks to advent of Modi , India is now heard and considered seriously. Author seems deeply biased against Modi or has no brains of her own just echoing what her master asked her to do.

  7. Likewise, news headlines screaming that the Sensex is hitting record highs misses the fact that annualised average total returns were 8.5% from 2010-2013 and have risen only to 9.1% from 2015-2018, a tiny difference. Very bad trunketed analysis, the data points taken to fit your arguments. Deplorable.

  8. then why their is no scam till date. Also if Demonitization is wrong step, then suggest what else we can do , to say common man to use CARD or take bill. ?.

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