Comment by Riaz Haq on October 26, 2019 at 9:09pm

#India is stumbling because of its prime minister #Modi’s failure to curb his darker side - India #Hindutva

https://www.economist.com/special-report/2019/10/24/india-is-stumbl...

Narendra Modi needs to show more of his reformist character and less of the Hindu nationalist, says Max Rodenbeck

Mr Modi’s first five years proved in many ways a wasted opportunity. With some notable exceptions, such as the introduction of a nationwide goods and services tax (gst) and a huge effort to stop “open defecation” by building more toilets, bold reforms were largely postponed in favour of policy tinkering, sops to noisy constituencies and packing the bureaucracy with loyalists. In his latest term, Mr Modi has seemed more intent on following another side of his character, consolidating personal control, punishing political foes and pursuing Hindu-nationalist ideological goals—such as placing 7.5m unhappy Muslims in Kashmir under extended lockdown and direct rule from Delhi—than dealing with more pressing economic issues.

A reckoning
Mr Modi’s government has failed to acknowledge looming dangers to India’s economy and is now struggling to cope with an alarmingly sharp slowdown. In the first half of 2019 new banking credit to businesses crashed by a shocking 88%, and growth fell from 8% in 2018 to just 5% this year. For a large and diverse economy, this remains a respectable figure. But demographic pressures mean that India must sustain growth of 7.5% just to keep unemployment in check—and needs to do even better if it hopes ever to catch up with China. “Anything less than 6% feels like a recession in India,” says Pranjul Bhandari, chief India economist at hsbc in Mumbai. And some of the troubling domestic indicators—such as this year’s sudden plunge in car sales, lingering debts in banking, property and power-distribution companies, and long-term declines in consumer spending, household saving and industrial investment—could soon meet strengthening global headwinds to create a nasty storm.

India’s current economic challenges are not due to some big outside cause. The country has the resources and talent to grow strongly for decades to come. This special report will argue that its troubles stem largely from policy failures, albeit more by omission than commission. Successive governments—at state as well as national level—have failed to pursue sensible, consistent policies to promote growth. Mr Modi, too, for all his promise, is failing in this regard, as he follows more his nationalist, rather than his reformist, instincts.

India is not easy to govern. What other country has nearly 800 spoken languages, 22 of them languages of state? And what other society is fragmented into more than 3,000 castes, each with its own proud creation myth? Some caste rigidities have softened over time, but the structure is remarkably robust: even now only one in 20 marriages crosses barriers of caste. India’s large Muslim, Christian, Sikh, Buddhist and Jain minorities often claim to be free of caste. In practice they are nearly as compartmentalised as the 80% Hindu majority. Economic divisions coexist with social ones. When introduced in 2017, the gst replaced a web of local taxes stretched over 29 states and seven territories. Goods move faster now, but they still cross radically different economies. Residents of Goa on India’s west coast enjoy incomes per person 12 times those in Bihar, a rural state to the north-east. Levels of fertility, literacy and life expectancy in the southern states of Kerala and Tamil Nadu approach those of Thailand or Turkey; in parts of the Gangetic plain in the north they are nearer to those of sub-Saharan Africa. Banks in Maharashtra, home to India’s commercial capital, Mumbai, boast loan-to-deposit ratios of 100%, as in advanced economies. In India’s most populous state, Uttar Pradesh, they are stuck at 40%, reflecting slim pickings and high barriers to enterprise.

Comment by Riaz Haq on February 11, 2020 at 7:37am

#India’s Sickest Economy In 40 Years Faces ‘Incompetent’ Cure. #Modi’s govt has broken the economic equivalent of the Hippocratic oath. #Unemployment is 45-year high, while official gross domestic product #GDP figures are at 11-year lows #BJP #Hindutva https://www.forbes.com/sites/williampesek/2020/02/11/indias-sickest...

The budget Modi’s team detailed proposed tax cuts for individuals and increased fiscal deficits. It offered few concrete steps to fix a financial sector in disarray or create good-paying jobs. Modi’s ambitious infrastructure plans are all well and good. But achieving his “Make in India” vision requires liberalizing industry and increasing productivity to raise wages across the nation.

Hence Chidambaram charges the government is “living in denial” as trade-war headwinds intensify. “The only way to revive demand is to put money in the hands of people and not in the hands of corporates,” Chidambaram said. He told India Today TV that he grades Modi’s budget between between 0 and 1.

Unemployment, for example, is at 45-year highs, while official gross domestic product figures are at 11-year lows. Why, oh why, would Modi’s team think now is the time to cut by 12% funding for programs aimed at helping lower-income Indians find gainful employment? Economist Priyanka Kishore of Oxford Economics speaks for many when she concludes Modi’s budget is “far from being a game-changer.”

All this may surprise those who thought Modi would indeed be an economic game-changer. That hope was predicated on his 14 years running Gujarat, a period of relative economic outperformance by the western state.

True, India’s corruption ranking by Transparency International improved since 2015. Its standing in the World Bank’s ease-of-doing-business grades also improved. What hasn’t, though, are the barriers that keep rapid growth from trickling down from the elites to hundreds of millions of India’s struggling to progress up the economic latter.

Modi remains too focused on the overall. One preoccupation: getting growth back above 7%. Another: joining the ranks of Group of Seven economies as soon as possible. That means raising annual output toward $10 trillion (from about $2.9 trillion now). To what end, though, if India isn’t moving upmarket innovation-wise in sync with its rising share of global GDP?

There are still four years to get Modinomics back on track. But it’s not going to happen with budgets like this. Or without a better team of doctors to revive an economy trying to avoid the ICU.

Comment by Riaz Haq on June 1, 2022 at 7:47am

Aakar Patel
@Aakar__Patel
chief economic advisors a thread

first one (2014-2018) concluded gdp growth was off by 2%. that meant that before pandemic, after slowing for 9 consecutive quarters (2 years and 3 months starting jan 2018) india gdp was growing at only 2%

govt shrugged


https://twitter.com/Aakar__Patel/status/1531851911854714880?s=20&am...

India's GDP growth overestimated by 2.5%, says former chief economic advisor


A new study by former chief economic advisor Arvind Subramaniam says the expansion was overestimated between 2011 and 2017

Rather than growing at about 7% a year in that period, growth was about 4.5%, according to the research paper

Read more at:
http://timesofindia.indiatimes.com/articleshow/69738363.cms?utm_sou...

----------------



Aakar Patel
@Aakar__Patel
his successor (2018-21) asked govt to release its own survey which showed indians were consuming less (incl on food) in 2018 than they were in 2012.

govt has not released survey


https://twitter.com/Aakar__Patel/status/1531852392399900672?s=20&am...

Economic adviser prod to release consumer expenditure survey report
After the demand was made by Subramanian, the government is at present considering its release

https://www.telegraphindia.com/india/economic-adviser-prod-to-relea...

A year after the NDA government withheld the release of a consumer expenditure survey for suspected discomfort over unfavourable findings, its chief economic adviser Krishnamurthy Subramanian has demanded its release, a minister has informed Parliament.

In response to a question in the Rajya Sabha by Congress members L. Hanumanthaiah and G.C. Chandrasekhar who wanted to know if the chief economic advisor had demanded to make the survey report public, minister of state for statistics and programme implementation Rao Inderjit Singh said in a written reply: “Yes Sir”.


The National Statistics Office (NSO) under the ministry of statistics and programme implementation had conducted an all-India survey on household consumer expenditure from the period July 2017 to June 2018. But the ministry decided not to release the report citing a higher divergence with the administrative data. According to a report in Business Standard, the survey found a fall in consumer spending for the first time in more than four decades.

After the demand was made by Subramanian, the government is at present considering to release the report.

“The ministry has followed a rigorous procedure for vetting of data and reports which are produced through surveys. The results of this survey were examined and it was observed that there was a significant variation in the levels in the consumption pattern as well as in the direction of the change while comparing with other administrative data sources. The matter is being looked into and finalisation of the results of the Consumer Expenditure Survey 2017-18 is under consideration,” the minister said.

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