Inconvenient truth: UPA was better

The report of a committee of the National Statistical Commission, which has developed a back series of GDP statistics, belies some of the claims and narratives of the Modi government about the country’s current and past economic growth. The exercise was necessary to compare past economic growth with the new GDP series. The comparison shows that the country saw higher economic growth during the UPA years than during the Modi period. The differences are striking. The economy registered an average annual growth rate of 8.13% during the Manmohan Singh regime from 2004-5 to 2013-14. The growth rates during the 1999-2004 Vajpayee regime was 5.83% and that during the four years of Modi is 7.22%. The data also shows that GDP growth crossed 10% twice during the UPA period.

An analysis of the series shows that economic growth started accelerating in the first year of the UPA-I regime and peaked between 2007-8 and 2010-11. There was a setback after the global financial crisis of 2008 and the economic slowdown that followed, but the recovery was swift on the back of a stimulus, based on high public spending. The high points of those days have not been touched again. The last two years of the UPA-II regime saw a decline because of high oil prices and deficit levels and a slowdown of the government momentum. The growth in real terms started looking up again during the first few months of the Modi government, aided by an improving global economy and a steep fall in oil prices. But the misadventure of demonetisation and the continuing disaster that’s the GST system set it back. The gains since then have again been threatened by high trade deficit and other adverse factors, both internal and external.

Apart from the GDP, the increase in gross fixed capital formation, which is a measure of public and private investment, was also remarkably high during the UPA years. It was 10.2% during the UPA years against 7.2% during NDA-I and 6.4% during the Modi years. The figures show that growth, investment and job creation were all higher during the UPA years. Union minister Arun Jaitley has said that the UPA government did well because it inherited a high growth economy from the Vajpayee government. A similar logic would make the growth during the Vajpayee years the result of the work of previous governments. Why did it not work after UPA-II? After all, didn’t Modi win by promising high growth and two crore jobs a year. No wonder the government has disowned the data and the report has since disappeared from its website. Truth is inconvenient. But just like political history, economic history also cannot be changed or blacked out retrospectively.