The Hindu Business Line : Tempering the shine

PREDICTABLY, the third quarter figures for the economy have been snapped up by the "India Shining" enthusiasts and cited as further proof of the claim that the republic "is poised for explosive growth". On the face of it, the news is good indeed.

How can it be otherwise when the third quarter (October-December) growth rate of 10.4 per cent has been the highest quarterly growth rate notched up in the past eight years? Even the "cynics and doubters" will readily agree that the performance has been extremely creditable. But having said that, the "shine" enthusiasts need to be put in their place if only for the reason that too much crowing now may be followed by frowns on hitherto beaming faces if the rain-god decides to choke off the tap a bit, more as matter of whim than one of policy.

This is primarily because the record quarterly growth in eight years is the direct result of a bountiful monsoon last year, the agricultural growth rate in the October-December 2003 period having increased by a substantial 16.9 per cent compared with an abject decline of 9.8 per cent in the corresponding quarter of 2002-2003.

The "shinewallahs" will argue that there is no need to look down on agricultural growth compared to other sectors, particularly because the farm sector comprises so large a part of the gross domestic product. This is wholly acceptable, but would it not have been far better had such sectors as mining, manufacturing, power, construction, insurance, or real estate registered equally impressive growth rates?

True, the sector "Trade, Hotels, Transport and Communications" grew by 13.1 per cent in the October-December 2003 period against just 6.5 per cent in the same quarter in 2002-2003. But Manufacturing rose by just 7.4 per cent against 6.9 per cent and Electricity, Gas, Water Supply by 5.2 per cent (4.8 per cent) while Mining registered a decline at only 4.2 per cent (7.6 per cent), Construction 5.1 per cent (7.4 per cent), Financing, Insurance, Real Estate and Business Services 7.7 per cent (8.6 per cent) and Community, Social and Personal Services by 2.8 per cent (5.6 per cent).

Since there was no monsoon to help these other sectors, can it then be said that the "Shining India" campaign as far as the latest growth figures are concerned is founded on water, which is a happy thought no doubt because water is the source of all life, but worrisome as well because one cannot claim to stand on it for long without the fear of drowning sooner rather than later!

This is not to suggest that the economy is not looking up — whether because of agriculture, automobile exports, the controversial business process outsourcing activity, or the travel trade.

It is, and this thanks as much to the NDA Government of Mr Atal Bihari Vajpayee, now, as to the Congress regime of Mr P. V. Narasimha Rao in the first half of the 1990s.

But to trumpet the "Shining India" message based on this and, for good measure, take a swipe at the so-called "cynics and doubters" (as the Union Finance Minister has had occasion to do recently) is to declare to the world loud and clear that a Lok Sabha election is round the corner and an economic propaganda campaign is on. Which really, quite undeservedly, robs Shining India of a lot of its pristine sheen.

Ranabir Ray Choudhury