A quick look at economic growth under Modi and Manmohan

- The Conundrum of Economics - Dhawal Mehta

- Inflation is a hidden tax levied on the people which reduces purchasing power

India's economy grew at a rate of 7.2 percent in the financial year 2022-2023 that ended on March 31, 2023, and the Reserve Bank estimates that India's economy will grow at a rate of 6.5 percent during the year 2023-2024 that ends on March 31, 2024. During the nine years of the Modi government's rule, the economy has performed well as India's economic growth rate is higher than that of all major developed countries in the world. Then what was the growth rate of economy in Manmohan Singh's ten years of Congress rule? The government's economic performance is commendable as under his leadership India's GDP rose from $313 billion on 23 May 2014 to $589 billion on 26 May 2023. But it has to be compared with the performance of ten years of Congress before him. During the 9 years of the current government under Shri Narendra Modi, India's average annual growth rate was 5.7 percent while under the ten years of Manmohan Singh's government, India's average economic growth was 7.7 percent. But when the old statistical series was revised in 2018 under the Modi government, the Manmohan Singh government's ten-year average economic growth had to be reduced by .9 percent to 6.8 percent instead of 7.7 percent. Despite this decline, Manmohan Singh's improved government economic growth rate of 6.8 percent takes the number one spot compared to the Modi government's nine-year average economic growth rate of 5.7 percent, but this is not straightforward or easy. Even though the Congress achieved the first position in the economic growth rate but in doing so this Congress government reduced or increased the inflation rate. In this regard, the Modi government gets number one as the average annual rate of inflation (Consumer Prime Index) in the nine years under Manmohan Singh's government was a whopping 8.1 percent as against 5.1 percent in the nine-year Modi era. Inflation is actually a hidden tax on the people and it reduces the purchasing power of the people. Modi government's overall control of inflation is its plus point. Also, 45.6 percent of the total work force in India is directly or indirectly involved in the agricultural sector, so agriculture plays a very important role in the employment sector. During the nine years of the Congress, the average growth rate of the agricultural sector was 3.5 percent, while the growth rate of the agricultural sector was 3.7 percent during the nine years of the Narendra Modi government. Since 2009-2010 was a drought year for India and there is a slight difference between the two governments in this regard, both can be given the first number equally. The Modi government has admirably reduced the percentage of people living below the poverty line in India. In 2011, under the World Bank's definition of poverty, people with an income of $2.15 or less per day were considered poor, and for that, their income was calculated according to the purchasing power parity in 2017. In 2011, when Manmohan Singh's government was in power, 23 percent of people in India were living under poverty under the above definition of poverty in India. In 2019, when the Modi government was in power, this percentage dropped dramatically from 23 percent to 10 percent. But what about income and wealth inequality? If five percent of a country has five percent of the country's income, ten percent has ten percent of the country's income, 50 percent has 50 percent of the country's total income, 90 percent has 90 percent of the country's income, then the income per percent of the population is also 4 percent. Otherwise, income inequality in the country can be considered almost zero.