How India bettered China’s growth story
India’s Finance Mnister Arun Jaitley forecast exactly a month ago that the country’s GDP growth rate will be 7.5% this year. He attributed this entirely to the dynamism of the government led by Prime Minister Narendra Modi formed after the 2014 parliamentary poll. “During the last few years we had fallen off the radar, our growth had slowed down, our priorities were blurred and the world was accusing us of policy paralysis. Finally people of India decided to bring about a change”, Jaitley said in a thinly veiled condemnation of the previous government led by Prime Minister Manmohan Singh, an acclaimed economist himself, who is credited with piloting the country’s free-market reforms.
“This year we will close at 7.5% GDP growth and next year hopefully higher,” Jaitley predicted. Jaitley is a no-nonsense lawyer by profession and is a successful politician. To be sure, as India’s finance minister, his words carry weight within the country and abroad.
They influence even the IMF, which has since acclaimed that India is poised to “overtake” China in growth. That’s a tongue-in-cheek remark, of course, because who doesn’t know that China’s economy has outstripped India’s by four decades or more already and comparing India with China is no more than a folk tale. But then, perceptions form the stuff of our day-to-day life and most of us Indians are not trained economists.
Unsurprisingly, the widespread perception in India today is that the country has finally caught up with China in growth and development. For a country smitten by a keen sense of envy bordering on rivalry vis-a-vis China, this easily transmutes as the stuff of national pride. And Prime Minister Narendra Modi suddenly looks ten feet tall.
Even President Barack Obama took note, which was only to be expected since the lure of the fastest growing market in the world is there on his mind always. The Indian market is important for boosting U.S. exports and creating jobs in America and it could not have escaped Obama’s highly focused mind.
Obama probably thought it will be a clever move on his part to pen a panegyric on Modi. There couldn’t be a better way of flattering Modi, after all. And, believe it or not, amidst all that ugly, exasperating wrangle with the U.S. Congress over the Iran deal, Obama was quietly writing a panegyric on Modi!
But nothing works well for Obama thse days and the Time magazine’s piece by the US president on Modi, which appeared yesterday, however, turned out to an overkill that might even embarrass Modi, who usually likes flattery.
Obama probably thought it pays to cater to Modi’s vanities, since he knows Modi can take arbitrary decisions and that can be useful for promoting American business interests. But he stepped way out of line by bracketing Modi with Martin Luther King and Mahatma Gandhi. The point is, like what the famous song supposedly about Sophia Loren says, Obama never looked inside Modi’s head.
Obama’s panegyric most certainly inspired Jaitley to exceed his own month-old prophecy. He now believes that India has the potential to make nine to 10 percent growth rate “a new normal.” He made this prophecy at a U.S.-India business conclave organized by a Washington-based think tank.
If Obama gets to hear what Jaitley just announced, maybe, he will now do an oil painting of Modi. Anything is possible. Obama has a focused mind.
To be sure, Jaitley has proved to be a past master in the ancient Indian rope trick. He has done a masterly job in stringing the public opinion and duping Obama by creating the misperception that under Modi’s magical touch, Indian economy has turned the corner and is zipping ahead.
I just read a blog in the Wall Street Journal titled “India’s New GDP Numbers: A Peek Under the Hood.” I won’t tell you its contents except to underscore the fantastic extent of doctoring of statistics going on under the present Indian government to make the economy look larger than life.
Amongst other things, to puff up the GDP figures and to claim growth potential at 7.5%, the government apparently decided to add “the evacuation rate of goats and sheep in the production of organic manure” to the GDP. Got it? India’s GDP growth today shows how much those animals defecate. After all, their shit is a biological output of economic value, isn’t it?
Now, you would already be getting a sense of what I am going to say about Jaitley’s latest prediction about India’s GDP nearing 10% growth rate. Yes, you’re spot on. The Modi government’s most ambitious development program today known as Swachh Bharat is about construction of individual sanitary latrines with government subsidy in private homes. Modi’s dream is to ensure the elimination of open defecation by Indians.
Indeed, if the evacuation rate of 1.3 billion people could be somehow added to the country’s GDP, China’s economy can never catch up with India’s and Jaitley could be right about a ten percent growth rate – provided, of course, Indians make a sustained effort from dawn to dusk. Read the WSJ piece here.
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