The Narendra Modi government came to power in May 2014 with a historic mandate and promising good days for the economy. Investors hoped for a business-friendly government while 125 crore Indians, one-third of whom is below the poverty line, aspired for more jobs and affordable life. Three years have passed since then. Did Modi deliver on those promises? It is important to look at the numbers and see what they tell us. Here is NDA government's progress on key economic gauges.
GDP:
GDP number is a big relief. On an average, the last three years' growth has been over 7 percent. In fact, over the last few quarters, India has beat China to be the fastest growing. In January 2015, the government changed the way GDP is being calculated, which helped increase the GDP numbers significantly. Now, India's GDP is measured by the gross value added (GVA) approach. Many economists have questioned the said approach and the same can be debatable.
Inflation:
When Modiji took over as prime minister, the retail inflation stood at 8.33 percent. In April 2017, it is just 2.99 percent. Vegetable inflation, meanwhile, declined from 10.72 percent to (-)8.59 percent. And food inflation decelerated to 0.61 percent from 8.89 percent. There are many who think the deep deceleration in inflation is because of the sharp fall in oil prices. They point out that the prime minister has been just lucky. There is a section who says the government too has taken steps like controlling hoarding in food items etc to rein in prices. The big test for Modi will come when the crude oil prices increase.
Sensex:
As exit poll results started coming in during 9, 12 and 13 of May 2014, the Sensex rose 1,500 points. Over the last three years, though there have been patches of disappointments (the index hit a low of 22951 on 11 February 2016), by and large it has been a dream run. Now, the market is again on record breaking spree. On Friday (19 May), the index hit a record high 30,712.35. As it moved from 24,121.74 (on 16 May 2014) to 30,712, rising 27.3 percent, investor wealth swelled 56 percent or by Rs 45 lakh crore. The BSE market capitalisation is now more than $2 trillion.
FDI:
The flow of foreign direct investment (FDI) over the last 3 years is a proof. During the period under PM Modi, the country saw nearly $149 billion (until December 2016) worth of investment from overseas companies. In comparison, under the erstwhile UPA, three years starting 2011-12 witnessed an aggregate flow of $117 billion.
Exports:
What drives exports is mainly the global economic and market situation. But to an extent, the government policies - related to foreign and making the domestic industry export competitive - do impact. In three months ending April 2017, the average growth has been about 21 percent. Prior to that the figures are poor. In fact, from Dec 2014 to May 2016, the export performance of the country saw a crippling decline. Though now they are looking up, emerging protectionist stance of many countries, including the US, which is the biggest export market for India, have the potential to do not offer much hope. Also, along with exports, there is an increase in imports, resulting in a widening of trade deficit to 29-month high of $13.2 billion.
Rupee:
The UPA government came under severe criticism from the BJP and Narendra Modi, then Gujarat chief minister. After Modiji took over, the currency has not been in the pink of health throughout. From 58.78 against the US dollar on 16 May, the rupee fell to the record low of 68.87 on 24 November 2016. Going forward, they expect the rupee to depreciate.
Forex reserves:
Forex reserves are at a record high. From $312.2 billion, the dollar reserves with the RBI has swelled to $370 billion as of March 2017. That is an increase of $57.7 billion or 18.5 percent. This is enough to cover import bills for more than 10 months.
Performance can be measured on many more parameters.
GDP:
GDP number is a big relief. On an average, the last three years' growth has been over 7 percent. In fact, over the last few quarters, India has beat China to be the fastest growing. In January 2015, the government changed the way GDP is being calculated, which helped increase the GDP numbers significantly. Now, India's GDP is measured by the gross value added (GVA) approach. Many economists have questioned the said approach and the same can be debatable.
Inflation:
When Modiji took over as prime minister, the retail inflation stood at 8.33 percent. In April 2017, it is just 2.99 percent. Vegetable inflation, meanwhile, declined from 10.72 percent to (-)8.59 percent. And food inflation decelerated to 0.61 percent from 8.89 percent. There are many who think the deep deceleration in inflation is because of the sharp fall in oil prices. They point out that the prime minister has been just lucky. There is a section who says the government too has taken steps like controlling hoarding in food items etc to rein in prices. The big test for Modi will come when the crude oil prices increase.
Sensex:
As exit poll results started coming in during 9, 12 and 13 of May 2014, the Sensex rose 1,500 points. Over the last three years, though there have been patches of disappointments (the index hit a low of 22951 on 11 February 2016), by and large it has been a dream run. Now, the market is again on record breaking spree. On Friday (19 May), the index hit a record high 30,712.35. As it moved from 24,121.74 (on 16 May 2014) to 30,712, rising 27.3 percent, investor wealth swelled 56 percent or by Rs 45 lakh crore. The BSE market capitalisation is now more than $2 trillion.
FDI:
The flow of foreign direct investment (FDI) over the last 3 years is a proof. During the period under PM Modi, the country saw nearly $149 billion (until December 2016) worth of investment from overseas companies. In comparison, under the erstwhile UPA, three years starting 2011-12 witnessed an aggregate flow of $117 billion.
Exports:
What drives exports is mainly the global economic and market situation. But to an extent, the government policies - related to foreign and making the domestic industry export competitive - do impact. In three months ending April 2017, the average growth has been about 21 percent. Prior to that the figures are poor. In fact, from Dec 2014 to May 2016, the export performance of the country saw a crippling decline. Though now they are looking up, emerging protectionist stance of many countries, including the US, which is the biggest export market for India, have the potential to do not offer much hope. Also, along with exports, there is an increase in imports, resulting in a widening of trade deficit to 29-month high of $13.2 billion.
Rupee:
The UPA government came under severe criticism from the BJP and Narendra Modi, then Gujarat chief minister. After Modiji took over, the currency has not been in the pink of health throughout. From 58.78 against the US dollar on 16 May, the rupee fell to the record low of 68.87 on 24 November 2016. Going forward, they expect the rupee to depreciate.
Forex reserves:
Forex reserves are at a record high. From $312.2 billion, the dollar reserves with the RBI has swelled to $370 billion as of March 2017. That is an increase of $57.7 billion or 18.5 percent. This is enough to cover import bills for more than 10 months.
Performance can be measured on many more parameters.