The recovery of Indian economy due to the shock of the pandemic has been completed, declared the first chapter of this year’s Economic Survey.
Finance Minister Nirmala Sitharaman could have changed Jawaharlal Nehru’s words slightly and could said, when the whole world is sinking into the black hole of economic uncertainty, India is waking up with life and economic prosperity.
A number of questions may be raised as to the character of that awakening, of that recovery. But before that, there is a different question: Are the statistics used in the survey to paint a picture of economic recovery, are they complete?
For example, the survey claims that demand for consumer goods has rebounded—but does not mention that consumer demand has been on the decline since 2014.
December figures suggest that employment is not a concern. But, what is the character or quality of that employment? It is not mentioned.
Unemployment in both rural and urban areas, which has been a cause of deep concern for the past one year, is also absent from the survey.
However, given the government’s reputation for information transparency, there is little reason to call the survey’s pick statistics exceptional.
Rather, let us discuss the character of the economic recovery. India has weathered the shock of Covid, the Economic Survey explains this claim: GDP accounts have crossed the pre-Covid level.
If India’s gross domestic product was Rs 100 in the fiscal year 2019-20, i.e., the last full financial year before the pandemic, today, after three years of ups and downs, the figure has come to Rs 108. What is the economic recovery?
Had there been no inflation, if the Indian economy had grown at an average rate of 6 percent per year, then the growth of Rs 100 in 2019-20 would have been a little over Rs 119 today.
And, if the 9 percent growth rate required to reach the Prime Minister’s vision of ‘Five Trillion Dollar Economy’ in the pre-Covid stage, Rs 100 in 2019-20 would be Rs 130 today.
That is, what economic surveys claim today as recovery, that GDP figure is far from the Prime Minister’s vision, far behind India’s natural growth trajectory.
If to say that this is the recovery , than have to ask the question in the manner of Mullah Nasiruddin, but where is the crisis?
If GDP returns to the pre-Covid levels, are its internal hinges the same? With growing financial inequality, backwardness in education, virtually no training for a large part of the labor force—can India revisit its dream of becoming a leader on the world stage?