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The Hindu published an interesting bit of news yesterday. The headline was provocative : UPA set manufacturing job growth record. The report has triggered off discussion on social media. I was asked to give my opinion on the report on Quora. Here is what I feel. Two comments on the report itself.

  1. It is not a report in a journal but a working paper on the ICRIER site.
  2. I am not sure that it has been peer reviewed. If it has it would add enormously to the validity of the findings and conclusions.

The table on page 10 of the report shows more data than the Hindu article reports.

When I look at the table, I am struck by three  observations

  1. the growth rate was negative in the Atal Bihari Vajpayee years. It was also negative in the pre-liberalisation years but then we must remember that the decade saw a lot of political turmoil – Indira Gandhi returning to power, being assassinated, Rajiv Gandhi’s spectacular majority and even more spectacular fall, VP Singh and assorted opportunists at the helm before P V Narasimha Rao brought in some sanity. 
  2. The growth rate for 2003-4 to 2011-12 looks spectacular especially coming on the back of the previous period.
  3. The researcher has parsed data in different time intervals. I am not sure why. What was the logic of using a ten year frame in some places and a 5 year frame in others? Was it to overlap with the government in place? Is there, therefore, a political motivation inherent in the report? Who knows? It is possible.

My impressions

  • The growth rates probably reflect reality. That they have not received attention is because (1) Poor communication has been a characteristic of the UPA I and II governments and the PM especially. This is one of the many areas where they did well but failed to communicate and (2) nothing could survive the voice and volume of propaganda unleashed by Narendra Modi and his team in the run up to the 2014 elections. The propaganda drowned the reality that India had grown every year, at rates higher than most of the rest of the world.
  • The growth rates built on negative growth of previous five years. The low base makes it look even more impressive that it would have been otherwise. After all the rate is 2 points above the growth rate in the decade which included emergency in India.
  • These type of indicators often show a lag between implementation of policy and impact. It is possible that some of the policies kicked off in 1998-2004 by the NDA government, started showing results only later. Remember that India Shining was the battle cry of the NDA government in the 2004 elections and it was not entirely baseless. UPA II must have gained cumulatively from NDA and UPA I. Most of these type of successes are built on cumulative achievements.

It is often very difficult, if not impossible, to directly correlate macroeconomic indicators and specific policies. It is also futile to do so. Everything in these periods is different. Chaos theory tells us that minor changes in one parameter has the potential to completely change the outcome.

From India’s point of view, the numbers are good and that is all there is to it.  That is all the discussion that is needed.

Makarand


PS:

Unfortunately, this report is going to get a political hue.

I foresee all sorts of claims by the UPA especially saying that they were good for the country but could not communicate. It makes no difference now. They had their chance and muffed it.

I see the BJP (in reality the bhakts more rather than the leaders) going ballistic in tearing the report to pieces. The will play the man (the report writer) and the ball (the report itself). They will question the credentials of ICRIER and the people who lead the agency. Watch out Mr. Vashist. Your life is going to be miserable in the near future.

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