The growth figures for the tenth and last year of the Narendra Modi government ahead of the results of the Lok Sabha poll, which most likely would usher in its third straight five-year term, came rather late for these to impact the voting in the seventh and last phase of polling. In any case, it is anyone’s guess whether in a poll narrative dominated by caste, communal, reservations and other such considerations growth would directly concern a vast majority of voters. Those who take keen interest in economic growth might have already voted in the earlier phases. Nonetheless, it is good to know that the growth in 2023-24 was an impressive 8.2% due to a higher- than- expected increase of 7.8% in the last quarter. The data released by the National Statistical Office last Friday shows that the growth numbers exceeded the projections made by the NSO itself and a number of independent economists. In fact, the expansion is higher than the RBI’s earlier forecast of 7%. This is the ninth time since 1961-62 that the economy has recorded over 8% growth. Notably, the two year corona virus interruption adversely impacted the growth record of the Narendra Modi government in the 10 years he has been in the saddle in New Delhi. Reacting to the latest GDP numbers, Modi sounded optimistic of a higher growth in the coming years, saying it was `just a trailer of things to come...’ The NSO data showed that agriculture continues to be a laggard, pulling down the overall numbers. In the third quarter last financial year it grew at a mere 0.4% while it nudged a bit up in the last quarter at 0.6%. Erratic monsoon was cited as one of the factors for slow agri growth. Manufacturing continued to fare well, registering 9.9% growth in 2023-24. Real estate sector too fared well. A big employer, its growth meant a healthier spurt in demand for the steel and cement sectors as well. Services sector saw some moderation due to the slow growth in trade, hotels, travel, communications, etc. Meanwhile, private investment was yet to pick up steam while public spending on infrastructure was going strong. In fact, economists ascribed the higher than expected growth in the last quarter to a sharp increase in tax collections, given the gap between the GDP and gross value added (6.3%). Importantly, the growth numbers by themselves fail to get votes unless there is a real increase in the employment rate. On the other hand, there was good news for the government insofar as despite the plethora of welfare schemes, massive investment in infrastructure, defence, etc. it had managed to keep the fiscal deficit in check.
Against the revised estimate of 5.8%, the gap between income and spending had narrowed down to 5.6%. As per the official data, for the last financial year, the fiscal deficit was Rs.16.54 trillion as against the budgeted figure of Rs.17.86 trillion. The prudent management of the economy despite pressures on spending in an election year was to be commended. RBI has announced a transfer of over 2.11 lakh crore as surplus to the government for the financial year 2023-24. Yet another report in a pink daily said that LIC and central public sector undertakings together would give over Rs 1.26 lakh crore in dividend for the last financial year. The performance of the public sector units has improved tremendously under the Modi Government following a clear-cut hands-off approach adopted by it, leaving it to the professional managements to run them most efficiently. However, the challenge for the next government was to create jobs at a faster rate along with a faster rate of economic growth. A jobless growth relying on a trickle-down effect has proved woefully inadequate to meet the aspirations of the fast growing army of tens of millions of unemployed youth.
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