Growth in January-March was 5.8 per cent, the lowest in 17 quarters. The unemployment rate is the highest in 45 years, a figure previously leaked to the press. Analysts criticise the delay in the publication of the results. ‘Modinomics’ fails to uphold promises.
In the first quarter of 2019, the economy expanded by just 5.8 per cent. This is slowest pace in 17 quarters, falling behind China’s pace for the first time in nearly two years. Overall, In the past financial year – April 2018 to March 2019 – the economy grew by 6.8 per cent.
For Finance Secretary Subhash Chandra Garg, India’s slower growth rate was due to weak consumer demand and lower private investment. Things should start to turn around in July-September with favourable interest rates and an improvement in liquidity.
Meanwhile, unemployment rate was at a four-decade high at 6.1 per cent in 2017-18. This matches data leaked to the Business Standard newspaper in January, based on an assessment carried out by the National Sample Survey Office, which the Modi government had tried to hold back.
As a result, two researchers involved in the study quit in protest for the delay in the publication of such important estimates. Later over 100 of the most authoritative economic experts accused the government of rigging the data in order not to influence public opinion ahead of the general elections that ended last week.
Analysts suspect that the publication of the economic data was delayed so as not to harm the prime minister’s chances at re-election. Nevertheless, they provide ammunitions to critics of what some have been dubbed ‘Modinomics’, i.e. Modi’s model of economic development.
The latter seems to have failed to take off. At the start of his first mandate (2014-2019), the head of the Hindu nationalist Bharatiya Janata Party (BJP) had said that all sectors of the economy would grow.
This included a pledge to create 250 million jobs in ten years, an average of 25 million per year. In reality, the ranks of the employed rose by 1.4 million in2016, and by 1.8 million in 2017.
The worst situation is in the countryside. Youth unemployment stands at 20 per cent. Modi had promised farmers that they would get 50 per cent of farming income and see their revenues double by 2022.
Instead, agriculture grew by an average of 2.51 per cent in 2014-17, much lower under the Modi government compared to the previous decade (2004-17), when growth averaged 3.7 per cent.