The Hindu Business Line : Jaswant's digital speak

ONE day it is the S&P lauding our `very positive story', and the next day, it's Moody's talking about `vibrant growth outlook'. And if you were to add what Jaswant said - that economy is poised for higher growth - we have a hat trick of sorts. For those who keep watching the dwindling water level in reservoirs, all these good conduct certificates may not mean much. Yet, lay readers want to know more about the mood swings of the raters.

Is there a fight on percentages?

There are at least three numbers that are floating around: 10.4, 8.1 and 6.5.

In the third quarter of 2003-2004, that is, three months ending December 2003, economy meter ran like that of rigged-up rickshaw, and showed a `scorching' 10.4. "Is that April 10 or Oct 4?" you want to ask, but no, it is the GDP growth percentage which overtook China's. For the year just ended, that is 2003-04, experts say our economy grew at 8.1 per cent. But rating agencies use a different calculator, so when they punch the numbers, it shows 6.5.

Are we good, better, or best?

We may like to think we are the best, as each political party claims, but a conservative statement is what Moody's has said: That the country's economy is proving to be stronger than its peers enjoying the similar Baa3 foreign currency rating. However, at 8.1, if that turns true, we may clock the best speed.

Can we ask for re-totalling of our score?

Oh, this is not like vote counting, where you can ask for recounts. When giving us 6.5, even as Jassie has been liberally valuing our scripts, Moody's says: This would mean a slight slowing down from the growth in the current fiscal, but it would nevertheless be a `respectable' rate.

Isn't our rupee getting stronger day by day?

In the forex lingo, yes, even if it is not getting you more fuel or food here. So, why is the domestic currency rated only Ba2, two notches below the foreign currency rating? Moody's blames that on the weak fiscal situation. Jassie has promised to work on that immediately after the elections, results, government formation and taking charge again as the FM. Which means, you should vote for you-know-whom.

Why is fiscal deficit so harmful?

Key to Budget documents explains that fiscal deficit is the difference between total revenue and expenditure of the government. While individuals cannot pull on for long in such a situation, governments can and do.

At present, the combined fiscal deficit of the Centre and States dangerously exceeds 10 per cent of the country's GDP. Inability to rein in fiscal deficit, and "the loss-making electricity sector" are shown as reasons by many rating agencies when they place our sovereign rating on `junk' status. You can't cut electricity losses merely through load-shedding; nor achieve fiscal health till expenses are disciplined and revenue collection made effective. As a joke cautions, if you party too much, celebrating `we're back in the black', it is quite likely you get back to red.

Any memorable one-liners?

"GDP growth rate is not a figment of my imagination," is an FM-speak, and you should note that he doesn't sing poetry. Here's one more: "The country will reach double-digit growth in single-digit years."

SayCheek@TheHindu.co.in