As the PM sees it

Manmohan Singh has always said he leaves it to history to judge his performance. At his press conference on Friday in New Delhi, the first at home in over three years, the Prime Minister repeated this, but he seemed to suggest more. The central message was that his government had succeeded in achieving high economic growth and that the Narendra Modi brand of politics — a mix of Hindutva ideology and free-marketism — was “disastrous” for India.

“In 2004, I committed our government to a new deal for rural India. I believe we have delivered on that promise,” Singh said even as he regretted high inflation, corruption scandals and weak growth in manufacturing output.

Claiming that on average economic growth was “the highest of any nine-year period” since Independence, Singh said, “...we made the growth process more socially inclusive than it has ever been”. These claims assume greater significance as they come after the Congress party suffered a huge debacle in state elections and only months before the general election. But the question is: Has Singh managed to convince the nation about his legacy?

To be sure, the average GDP growth rate during the UPA government (2004-05 to 2013-14) was 7.7 per cent compared with 6.2 per cent in the previous decade. But the growth rate in the last fiscal was 5 per cent, the least in a decade. In the first two quarters of this fiscal, the GDP growth stood at 4.4 per cent and 4.8 per cent, respectively. The high growth of the initial years of the UPA government fell to new lows after the economic crisis and failed to rise again.

Even the quality of the high growth is disputed with critics dubbing it “jobless growth”. According to a study by the Institute of Applied Manpower Research (IAMR), employment in the five-year period ending 2009-10 grew by 2.7 million, while average economic growth over the same period was 8.7 per cent. This means the average number of jobs created annually during this period was 540,000, compared with an estimated 12 million people joining the workforce every year.

Three of these years — 2005-06, 2006-07 and 2007-08 — saw the economy grow by 9.5 per cent, 9.6 per cent and 9.3 per cent, respectively: an average rate of 9.5 per cent. The study shows that economic growth by itself doesn’t generate jobs, and jobless growth doesn’t serve the purpose of the UPA’s inclusive growth promise.

The second term of the UPA has been marred by high inflation, several corruption scandals and weaker growth. It has been unable to bring down prices, leaving inflation-fighting to the RBI, which kept interest rates high, and in turn impacted growth.

If average consumer price inflation was 4.41 per cent in 2005-06, the first full financial year of the UPA government, it ballooned to 10.44 per cent in 2012-13. Wholesale price inflation jumped from 4.5 per cent to 7.4 per cent during the same period. Whether the UPA spin doctors agree or not, India is fighting stagflation — inflation rate is high, economic growth rate has slowed down, and unemployment forever rising.

Like any other leader, the Prime Minister has the right to defend his legacy. But he cannot cover up the contradictions in the growth story and the resulting social tension with simple facts and figures.

History is unlikely to take a kind view of this.

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