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Journalism of Courage
Sometimes, just sometimes, happier trends fill the frame. We now have it on the authority of the Central Statistical Organisation (CSO) that India’s gross domestic product (GDP) has registered a robust second quarter (Q2) growth of 5.8 per cent, following a first quarter (Q1) figure of 6 per cent.
The two back-to-back quarters of healthy growth is in fact the best sign that a turnaround is in prospect for the Indian economy. What is particularly heartening is that almost every sector, with the exception of agriculture in a drought year, did well, with the services sector notching particularly significant gains. Interestingly, the recent Mid Year Review of the Economy (MYRE) was not so sanguine. It talked about a weakened growth momentum in the second quarter (Q2) of this fiscal when compared to the continued upswing in the first quarter (Q1).
The MYRE forecast was based largely on what it termed as the ‘most telling monsoon deficiency in two decades’. With this dampener on India’s GDP growth, the remaining factors like the high international oil prices, uncertainty about recovery in world growth and trade, a tense border situation and war jitters in the Gulf further ‘compounded this weakness’.
Which only goes to show that predicting economic growth is a bit like writing on water. There is, however, a generally optimistic note in the air currently, and it would be eminently sensible to make full use of it. Not only is telecommunication getting cheaper by the minute — the uniform mobile-to-mobile STD rate of Rs 2.99 per minute that has just been announced should assure much greater pan-Indian connectivity — and market buoyancy, but the manufacturing sector has grown at a healthy clip of 6.4 per cent, a huge improvement over the 3.8 per cent Q1 growth.
And, of course, services like trade, hotels, transport, communication, financing, real estate and business services have been the spearhead of this process.
What makes for a cautious optimism is the commitment the NDA government appears to be showing over taking its reform agenda forward. The recent induction of Arun Shourie — national mascot for disinvestment, if ever there was one — in seven of the newly-reconstituted Group of Ministers, well before the Budget making process was completed, is particularly significant in this regard.
It signals the top leadership’s interest in incorporating the reform process in sectors that have hitherto proved greatly impervious to change, like labour, for instance. Certainly, the Union government has little choice in the matter. If current growth trends are to continue and register greater highs over the next few months, India has to witness bold reform measures and a steady hand on the tiller.
