India’s Modi has Mixed Record of Economic Management

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New Delhi: Indian Prime Minister Narendra Modi has a mixed record of managing the economy, which started faltering following his overnight ban of high-value currency notes in November 2016.

A year after the shock move, output started declining in Asia’s third-largest economy, before the coronavirus pandemic pushed GDP towards its worst levels.

The Modi government’s record of managing inflation over the last seven years of his tenure has been better than that of the previous government, but it has been challenged after supply chain disruptions in the wake of COVID-19 drove up prices for households and businesses.

Here are some graphics showing how his government has fared in managing some key economic indicators.

Economic Output

India’s annual gross domestic product (GDP) fell to a decade low of 4% in 2019/20, a year before the pandemic pushed it further to register a record fall in economic output.

Rising Retail Inflation

Indian households are grappling with rising costs of living at a time when jobs and incomes have taken a hit from the pandemic, but economists are not hopeful that the annual budget, due next week, will provide much relief. read more

Unemployment

The economic slowdown has pushed India’s unemployment rate above the global figure in five of the last six years, yet the bigger problem is a fall in labour participation rate as disheartened job seekers look to move overseas instead. read more

Fiscal Deficit

India’s fiscal deficit shot up to a record 9.3% as the Modi government spent on fertiliser and food subsidies in providing free food for its 800 million poor during the pandemic. Now the government aims to rein this back to 6.8% in the current fiscal year, which ends on March 31.

Privatisation

Modi’s government has made little headway on its bold promises to reform state-run firms by divesting minority stakes and outright privatisation of some of them.

It was able to sell national carrier Air India to Tata Group, a tea-to-telecoms conglomerate, after years of trying, but failed to deliver on promises to sell some banks, refiners and insurance firms. (Reuters)