Thursday, July 10, 2008

The Lesser Devil 3

This is a continuation of a series of posts comparing the present Government with the previous Government.


India grew at 5.3% from 1991 to 1996 under the legendary tenure of Dr. Manmohan Singh as Finance Minister. Remember, these years were some of the most turbulent for the Indian Economy. From near bankrutpcy, it grew back to normalcy. In 1996 and 1997, with P Chidambaram as the Finance Minister, the Indian economy grew at the then runaway pace of 6.4%. BJP-led coalition governments were in power at the Centre from 1998 to 2004. The average annual GDP growth during these years was 5.8%. What then, makes the NDA so uniquely different with regard to their handling of the economy? The truth is that they slowed the Indian economy to an extent (the average GDP growth for 2000-2002 was 4.1%!). They could achieve a semblance of an average growth rate only after the reported GDP growth of 8.6% in their last year in office. That was again, due to the low base GDP growth rate reported in the previous year!

2004 onwards, it has been a fairy tale run for the Indian Economy. Under the present Congress-led UPA Government, the average GDP growth achieved from 2004 to 2008 was 8.7%!!! The economy, despite being in a downturn in 2008-2009 is expected to report an annual GDP growth rate of 7-8%, which is still excellent by NDA standards. And significantly, this has not been at the cost of fiscal prudence. The present Government has managed to better their own fiscal and revenue deficit targets for most of these four years. This is in stark contrast to the NDA Government, which failed to keep fiscal deficit in check.

The programmes launched by the present regime have been lauded by many an analyst as programmes intended to develop India as never before. I will discuss them next.

The Annual Economic Review (1998-2008);
'Myth about Economics and Politics in India': Surjeet Bhalla, March 15, 2008, Business Standard;

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