The government has been making tall claims about India becoming a $5 trillion economy in the coming years. But the reality is that these claims are built on a foundation of lies and fabricated data. A deep dive into the numbers reveals a disturbing pattern of systematic manipulation of economic statistics to artificially inflate India's growth story.
Let's start with the changing GDP growth rates over the years. Soon after coming to power in 2014, the Modi government changed the base year and methodology for calculating GDP, which magically pushed up the growth rate by 2 percentage points. This made India the "world's fastest-growing major economy" overnight.
But the tinkering with the data didn't stop there. In 2016, the government released another set of estimates further boosting the growth figures for the BJP years. Strangely, the "back series" data for the previous years was not immediately released, raising suspicions.
When the back series was finally published in 2018, it showed that economic growth was actually higher during the UPA years compared to the BJP years. Unsurprisingly, the government forced the National Statistical Commission to trash this report and come up with a new back series showing lower growth under UPA.
The numbers kept getting massaged - just a day before the last budget of Modi's first term in 2019, the growth rate for 2016-17 was further bumped up to 8.2%, making the BJP years look even stronger.
Arvind Subramanian, the Modi government's own former Chief Economic Advisor, has admitted that India's GDP was overestimated by 2.5 percentage points per year from 2012-13 to 2016-17. Instead of the reported 6.9% average growth, the actual growth rate was around 4.4%.
There are serious flaws in the GDP calculation methodology, which fails to adequately capture the unorganized sector that accounts for 45% of the economy. Experts estimate that this sector contracted by 70-80% during the pandemic, but this collapse is not reflected in the official GDP numbers.
Even the recent high growth rates being touted are suspect. Economist Ashoka Mody has pointed out that there is a huge discrepancy between GDP growth calculated using output data versus expenditure data. Using the internationally accepted practice of averaging the two, the growth rate for Q1 2023-24 falls from 7.8% to just 4.5%.
The stagnation in real wages, elevated MGNREGA demand, and sluggish consumption growth further belie the government's claims of a booming economy. Economist Pronab Sen has argued that the GDP growth of 7.6% projected for 2023-24 is grossly overestimated, as consumption growth should be at least 6.6% if the GDP is truly growing at that pace.
The evidence is clear - the Modi government is brazenly manipulating India's economic data to manufacture a false narrative of rapid growth. This is not just an academic exercise, but a deliberate attempt to mislead the public and project an image of an economy that is doing much better than the ground realities suggest.
It's high time the people saw through this façade of lies and demanded honest, transparent reporting of India's economic health. The future of the country depends on the government providing credible data, not cooking the books to serve its political agenda.
* Summarized from an article titled Is India Becoming a $5 Trillion Economy Soon? by Neeraj Jain published in countercurrents.org
