Commenting on the perception that Modi did not do as well at the Centre as he did in Gujarat, Sharma said project management in states is much easier than at the Central level.
India’s gross domestic product (GDP) growth rates don’t pass the basic smell test and are out of sync with other leading indicators, eroding the credibility of its data globally, noted economist and author Ruchir Sharma said on Friday.
“Earlier India’s data quality was not questioned, although people complained about consistency and promptness. Now, India and China are in the same bracket (in data quality),” Sharma said at the Indian Express Group’s Idea Exchange programme. Sharma’s book, titled ‘Democracy on the Road: A 25 Year Journey through India’, was recently released.
Sharma added that in the boom years under the UPA, auto and two-wheeler sales used to record growth rates of 20-30%; now these rates of expansion are in single digits and yet GDP growth is comparable. The GDP data raised eyebrows recently when the Central Statistics Organisation effected a sharp spike in growth rate for 2016-17, the year that saw demonetisation, from 7.1% to 8.2%, the highest in the current NDA regime.
In November last year, the data were revised to show the average annual growth rate between 2005-06 and 2013-14 stood at just 6.7%, against 7.7% recorded in the first four years of the NDA. According to the old series data, the UPA’s average growth rate was 7.7% in its ten years through FY14.
Sharma rued that privatisation has become almost a dead issue in India. While public-sector lenders need to be privatised (they account for two-thirds of the banking system, compared with an average of one-third in other emerging markets), the government may refrain from doing so on ground it needs to implement assorted state-run schemes like Mudra and Jan Dhan through them.
Reforms, however, are taking place more at the state level than the central level, he added. There is competition among states to project themselves as investment destinations and chief ministers are hard-selling states to global audience.
Prime Minister Narendra Modi, too, was much more interactive with businesses as the chief minister of Gujarat than as the Prime minister now, Sharma said.
“Industry expected to have much more from the Modi government, but it doesn’t openly talk about it. Unlike in the US, where industrialists are open about their political affiliations/leaning, in India, there is a strong fear factor (when it comes to criticising politicians). No businessman will ever speak against the incumbent government,” he said.
Commenting on the perception that Modi did not do as well at the Centre as he did in Gujarat, Sharma said project management in states is much easier than at the Central level. What works at the states may not work at the centre.