No, ‘Achche din’ haven’t arrived yet
There’s an article in the newspaper today, about how number of CPI and WPI don’t tally, and IIP being down but GVA is up.
Then I started reasearching about the topic. I understand that we don’t have a good clarity about many things, our economy is very disorganized and not many people pay taxes, Modi is trying to improve income disclosure and the number of people who pay taxes, but still there’s a lot of things that are not accounted properly. Hopefully once UPI is implemented completely and cash transactions are either banned or forced to bring down, we should see a better data representation of what’s actually happening at ground level.
Once you realise how chaotic our system is, then you wonder, how come we never bothered about these things before, I mean did we just took it for granted, that you cannot improve this nation or is it that there’s so much corruption and other disturbing scandals were rampant in the previous government that made us consider these things negligeble? Only when we start to take these things seriously do we understand the mess we have created over decades after Independence!
In Modi’s first year by changing the base year for calculating the GDP rate to 2011–12, the goverment anounced that we were growing at rate 7.2%. And goverment anounced that we will be growing at a much higher rate of 8 and 9 in the coming years. This gave the country a moral boost and also helped the Modi’s ‘achche din’ campaign. In reality though, it didn’t happen and we didn’t cross 8 or 9. Analysts, economists who were skeptical about these growth figures calling that these numbers don’t reflect the ground reality were correct when they said future predictions by government are incorrect.
So what happened? Is the hype created by growth figures just because of the shift in base year? There definately was a hype in public, people were buying stocks and stock brokers were selling more stocks using the Modi’s brand. But if you take look at the stock market from 2014 to 2016, it went up at the end of 2014 at it’s peak, in 2015 it’s turbulent, going up and down and finally crashing a lowest point. Sure there were reasons, if GST has been passed earlier and easy of making business is improved in all the states at a higher rate than, we might have seen a more structural growth.
Interestingly, when everyone celebrated in 2014, that we are finally growing. After years of despair and anger towards politics we were seeing something positive. But no one asked the government what happened to the tall claims of 8 and 9 percent GDPs and the govt quietly swept it under the rug because it had more serious issues in hand to deal with. And you can not even expect the opposition to make such points, they are most happy with irrelavent issues they can shout out at and make a fuss.
What do we need for improvement then? Is everything going down, is there any hope?
As much as there are problems, they are plenty of good things Modi’s govt did, and is doing. Though infrastructure is much less than what companies expect, it is improving. The problem is expectation has not met reality. Economic issues are not given priority in mainstream politics as the politicians are too busy arguing about the communal issues.
We still have a long way to go ahead. If you look at the good countries index, it makes more sense. We are doing better in sectors like International Peace and secturity, Health and well being but very poorly in World order, Planet and climate, prosperity and equality.
India is still very conservative compared to many other nations. Social changes are hard and I’d like to think we are in the middle of social shitstorm created by Globalisation. We understand how things happen in western developed countries, when we go there we behave like them and we enjoy all the fun. But when we are at home we aren’t able to change things because of the conscience of the common man in India.
At the same time our Infrastructure is not that great, common middle class family struggles to get through their daily life. Yes change is happening but it’s not going to happen overnight. Improving transport is still at it early stage, railways and roads are still being constructed. Unemployment is still huge. Educational institutions just doesn’t provide enough skills for employment.
We may claim to be world’s fastest growing large economies. We may claim that we will grow better than China, we are currently under major economic reforms. But to compare ourselves with other Major economies, China, EU, USA we still have to do a lot more and it takes decades of social, economic, infrastructural changes.
No, ‘Achche din’ haven’t arrived yet, but they are, in the next decade.