Farmers, salaried are losers despite Modi govt's faster dash on GDP track

The central government and the opposition have locked horns over the past two days after back-series estimates for India's GDP  showed a lower rate of growth during the UPA years than what was estimated using the earlier methodology.

The new numbers show India's economic growth rate averaged 6.7 per cent during the Congress-led UPA regime as compared to 7.3 per cent under the present government. Previous numbers had put the average growth rate during the 10-year UPA rule at 7.75 per cent.

On a day farmers gathered in the national capital to protest against government policies of the face of distress in the agriculture sector, Sanjeeb Mukherjee reports that new numbers fail to change the perception that farm growth during UPA regime was better than the last four years. 

The revised data shows that in the first four years of UPA-II, i.e. from 2009-10 to 2012-13, the average annual growth rate in agriculture and allied activities was around 3.9 per cent, while the average annual growth rate in the first four years of the NDA-II regime lead by Prime Minister Narendra Modi was 2.52 per cent.

The data also shows that in 2010-11, just after one of the worst droughts, India clocked perhaps one of its best growth rates in agriculture at 8.8 per cent.

Even as the BJP-led Centre and the Congress quarrel over GDP data, the average person’s income hasn’t grown as fast as the country’s GDP is said to have done, writes Sachin Mampatta.

Average income grew slower than per capita gross domestic product in four out of the last five years for which data is available, shows an analysis of income tax data on gross total income and official data on GDP.

Abhishek Waghmare explains how the calculation of GDP data is made more comprehensive through revisions. That said, this does not alter the future of the economy — it would not have any impact on investments, economic growth and job opportunities in the future.

Despite demonetisation and the enactment of GST, the new data suggests that the Indian economy has grown at a faster pace under the Modi government than during UPA era. Andy Mukherjee wonders if official data pass the smell test given the annual earnings growth of 500 of India’s biggest companies averaged 11 per cent between 2006 and 2014, plunging to half that rate in the four years under Modi.

The broader stock market also performed better under nine years of the UPA than in the last four years, reports Krishna Kant. BSE Sensex appreciated 14.7 per cent annually between FY05 and FY14, against 10.2 per cent a year in the last four years.

Gross fixed capital formation (GFCF), which connotes investment in the economy, had touched a high of 35.8 per cent in 2007-08, declining thereafter to 28.5 per cent in 2017-18. Yet, economic growth has risen over this period. Why? What does this say about productivity over this period? Ishan Bakshi tries to find the missing pieces of the productivity puzzle here. 

R Jagannathan believes figuring out data on jobs is more important than figuring out GDP trends, for the link between growth and jobs is now very weak. And probably broken. When it comes to jobs, neither UPA nor NDA comes out smelling of roses.