GDP Growth – Its Back To Square One!

It doesn’t really matter as far as people’s welfare is concerned, but GDP growth figures for 2017-18 released by the govt. yesterday show that things are back to where they were  before the present Modi govt. took over. In 2017-18, the economy registered a growth of 6.7%, the lowest in four years under the Achche Din Sarkar. Its now almost the same as in 2013 when it was 6.4%.

Remember – BJP had promised in its 2014 manifesto that they will ensure higher and more inclusive growth. There had been much euphoria and mutual back slapping in the past three years over the higher growth rates, 7.5% in 2014-15, 8% in 2015-16 and 7.1% in 2016-17. All that is over now.

Agriculture grew at a measly 3.4% in 2017-18, down from 6.3% in the previous year. Manufacturing grew at an anaemic 5.7% compared to 7.9% in 2016-17. The only sector that showed some signs of revival was construction, where growth rate picked up from just 1.3% in 2016-17 to 5.7% in 2017-18.

GDP growth rates, as Indians well know, are not reflective of any tangible benefits for common people. During a decade of UPA rule (2004 to 2014) average growth rate of the economy was about 8% but jobs grew at just about 2%. That’s why it was called “jobless growth”. In fact it was this that propelled Modi to power since he promised at least 1 crore jobs per year during his energetic 2013-14 election campaign.

But in his four years in power, the story has been the same – and now sliding to worse. Job growth is estimated at less than 1%, and there have been significant job losses in several sectors. Despite two consecutive good monsoons, agriculture growth is very low and farmers have been agitating against mounting debt and unremunerative harvest prices.

Govt. data shows that private consumption spending is slowing down, the growth rate slipping from 7.3% last year to 6.6% this year. Meanwhile investment by industry, as reflected in gross fixed capital formation, too has slipped from a growth of 10.1% in 2016-17 to 7.6% in 2017-18. RBI figures confirm that bank credit to industry has shown the lowest growth in 60 years.

The twin blows of demonetisation and GST have some contribution to make to this slow down, although BJP apologists have been endlessly claiming that these are historic measures with far reaching positive changes.

Be that as it may, for now, Modi sarkar’s achche din and sabka saath, sabka vikas have turned out to be brutally empty promises.