Thursday, September 29, 2022

Prime Minister Modi’s 8 years, and the economy

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Prime Minister Narendra Modi delivered a comprehensive list of his government’s successes on the social welfare front during a public meeting in Gujarat on Saturday. Modi, who will leave office on May 26 after eight years in government, has proven to be a true leader. There’s no denying that expanding and extending the welfare state has helped him maintain unprecedented levels of support. However, the economic record could have been far better.

In the early years of his presidency, low global crude prices aided him down reining in budget deficits and, as a result, India’s huge public debt, making it an outlier among growing economies. India also took the statistical title of “fastest expanding major economy” from China in 2015-16, clinging to it the next year before surrendering it to the neighbour in 2017-18. The fact that China’s economy is nearly five times that of India is a different story.

India’s economic growth had taken a hit, even before the pandemic wreaked havoc across the globe. The pandemic and external shocks have inflated public debt much further in recent years. Despite the slack in the economy, inflation has tended to rise alarmingly in recent months, as external factors turned unfavourable. In 2014, there were expectations of a double-digit growth, but in 2022, the growth is expected to be around 7%. 

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