The National Statistical Office recently released provisional estimates for the fiscal year 2022-23 (FY23) that pegged the country’s GDP growth at 7.2 per cent. This has given a boost to the Modi government, as India’s growth surpasses all other G20 countries. Moreover, the Reserve Bank of India (RBI) has expressed optimism that even in FY24, India’s GDP is likely to grow at 6.5 per cent, once again outperforming other G20 nations.
As the Modi government marks the completion of nine years, a lot has been written about its achievements and failures in various fora. We feel that any performance evaluation has to be done on at least three parameters that have significant implications for the welfare of the people on a sustainable basis. We evaluate the macro-economic performance in terms of overall GDP growth, performance in agriculture and implementation of the welfare schemes for the poor. We compare the nine years of the Modi government (2014-15 to 2022-23) to the 10 years average performance of the Manmohan Singh government (2004-05 to 2013-14).
At a macroeconomic level, GDP growth and inflation are fundamental indicators to judge any government’s performance. We would add to this foreign exchange reserves, which are critical in providing financial resilience to the economy in the event of any external shock. This indicator needs to be given due recognition given what is happening to countries in our neighbourhood (Pakistan and Sri Lanka) when they don’t have enough foreign exchange reserves.
The infographic shows that the average annual GDP growth rate during the nine years of the Modi government (2014-15 to 2022-23) stands at 5.7 per cent. In contrast, the UPA period (2004-05 to 2013-14) recorded an average growth rate of 6.8 per cent (as per the latest revised series data with 2011-12 base). However, it is worth noting that in the older series (with 2004-05 base at factor cost), the UPA’s average GDP growth rate was 7.7 per cent for the 10-year period, a whopping 2 percentage points higher than the Modi period. When the older series was revised in 2018, the growth in the UPA period got pulled down by 0.9 percentage points. This created controversy, which we don’t get into, except noting that even in the revised series, the UPA’s performance in terms of GDP growth was higher than that in the nine-years of the Modi government period.
But in terms of taming CPI inflation, the Modi government has surely done a much better job by holding the inflation rate at 5.1 per cent vis-à-vis Manmohan Singh’s period when it averaged at 8.1 per cent. Higher inflation generally is not considered good for the poor as it inflicts a hidden tax on their incomes. In terms of foreign exchange reserves too, the Modi government’s performance has been commendable, as reserves increased from US $313 billion on May 23, 2014, to US $589 billion as of May 26, 2023. This gives a lot of financial stability and resilience to the economy.
However, the quality of growth has to be judged by how inclusive it is. This, in turn, depends on the performance of the sector that engages the largest workforce — agriculture, which engages 45.6 per cent of the workforce. In this case, both governments have achieved almost similar outcomes. Despite facing two successive years of drought, 2014-15 and 2015-16, the Modi government achieved an average agri-GDP growth of 3.7 per cent vis-à-vis the 3.5 per cent during Manmohan Singh’s period, which also faced a drought in 2009-10 (see infographics).
But when it comes to the social sector welfare schemes (safety nets), the Modi government appears to have surpassed the achievements of the Singh government. The World Bank estimated India’s extreme poverty rate at 23 per cent in 2011, according to the international definition of extreme poverty (at $2.15 per capita per day, 2017 PPP). This declined to 10 per cent in 2019. Meanwhile, the Gini index, a measure of income inequality, remained constant at 36 per cent during the same period.
To further assess progress in the social sector, we have considered three parameters: One, the average annual person-days generated under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) since its inception. From 2006 to 2014 under the UPA government, it was 208 crore, which increased to 248 crore during the nine years of the NDA government. Two, the average annual number of houses completed under the Indira Awaas Yojana (IAY) and Pradhan Mantri Awaas Yojana-Gramin (PMAY-G), rose from 22 lakh houses to 34 lakh houses per year.
Three, the achievement of open defecation-free (ODF) status: From 38.7 per cent on October 2, 2014, to 100 per cent on October 2, 2019. To sustain this status, the second phase, ODF plus, was introduced. As of June 5, 2023, 55 per cent of India’s inhabited villages have declared themselves ODF plus.
However, there is one more critical factor that deserves mention, if people have to move to higher productivity jobs. And that is the issue of skill development. The PM Kaushal Vikas Yojana has played a significant role in this aspect by providing skill training to over 1.37 crore young individuals, enhancing their employment opportunities.
It may also be noted that the Modi government has focused on fostering entrepreneurship and empowering youth to become job creators. The Startup India programme has been instrumental in this regard, leading to a remarkable increase in the number of recognised start-ups — they have witnessed a 100-fold jump since 2016.
Overall, while the Modi government’s performance in terms of GDP growth has been somewhat subdued, it has succeeded in taming inflation, keeping agri-growth respectable, and doing a much better job on welfare schemes than UPA.
Gulati is Distinguished Professor and Thangaraj is a Research Associate at ICRIER. Views are personal
