In recent months, New Delhi did not lose any opportunity to talk up the economy. Led by PM Modi himself, almost the entire Cabinet has assiduously taken to addressing webinars on a daily basis, highlighting the economic opportunities that are opening up. The GDP growth in the third quarter (October-December) of 2020-21 not only saw India climb out of a recession, but also put it on a par with select countries like China and Vietnam that recorded positive growth. This growth of 0.4 per cent provides a scaffolding of realism to the Centre’s cheery assessments by substantiating its claim of prioritising infrastructure expansion — real gross fixed capital formation (GFCF) bucked by over 100 per cent in October and November.
But the margin of 0.4 per cent is too close for comfort. The National Statistical Office’s second revised estimates revealed that GDP will decline by 8 per cent in 2020-21; revising its first ballpark figure by 0.3 per cent. The agrarian unrest has become too noticeable to be fobbed off with schemes especially after PM-KISAN was found misdirected. The engine of the economy — consumer spending — fell in Q3 that had coincided with the festive season. And, the simmering social disquiet the country is witnessing rarely has a positive correlation with economic growth, as former PM Manmohan Singh has repeatedly stated. Covid-19 has reappeared in several states and the election season in another five will require the undiluted attention of corona warriors.
None of these amber lights along India’s economic highway account for the Modi government’s announcement about the biggest-ever revamp of the economy. The scale and the sweep — from banks to MSP — overshadow the 1991 efforts by a mile. The revenues from the large-scale sale of PSUs and land will fuel the government’s expenditure on welfare and infrastructure modernisation. These ambitions have a long gestation period, while it is near and the immediate that seek equal attention. Foreign Minister S Jaishankar pointed out at the Asia Economic Dialogue last week that India can no longer afford jobless growth. The government also needs to address the societal disquiet for the V-shaped recovery to be equitable.