In hundreds and thousands of companies across the country, the following conversation is going on:
HR boss: Welcome to this performance appraisal meeting. It’s increment time again. I really appreciate your working so hard. I sincerely want you to know we value your contribution. Unfortunately, as you know, times are very hard. Business is bad. The economy is doing terribly. So, as usual, it’s extremely difficult to …
Employee: But boss, the economy is doing very well, we’re growing faster than China. In 2014-15, economic growth was a huge 7.4%.
HR: Says who?
Employee: Says the Central Statistics Office.
HR: Well, you know what they say about lies, damn lies and statistics. My friend, there are all kinds of ways to massage economic growth numbers. Did you know that if people smoke more and then fall ill and spend money on treatment, all that results in higher gross domestic product?
Employee: Sir, the CSO explained the jump in growth by pointing out they used the modified effective LI method, which as you know is: GVA = Effective LI (Rural) x GVAPEW (Rural Establishments) + Effective LI (Urban) x GVAPEW (Urban Directory Establishments)
Employee: You understand that, don’t you, sir?
HR: Yes, yes, of course.
Employee: I quote them in full, ‘The existing study results on NPIs, could be used to enhance the coverage of NPISHs after blowing up for adequate coverage of NPIs. The results based on survey on NPISH would be used to work out the contribution of NPISH in PFCE’. I don’t quite understand what they’re trying to say or why growth is being revised upwards such a lot, but there must be something to it.
Employee: The World Bank says we’re doing great.
Employee: The IMF said we’re the fastest-growing large economy. Surely the fastest-growing large economy needs the fastest-growing large pay hikes?
HR: But our industry is having a difficult time ...
Employee: Sir, I notice the company’s stock has gone up by leaps and bounds.
HR: But there are uncertainties ahead.
Employee: Boss, Moody’s has recently raised India’s outlook to positive. The Economic Survey said growth will be between 8.1% and 8.5% in the current fiscal year, say 8.5%. Add to that 5.8% inflation, according to the RBI. That adds up to nominal growth of 14.3%, say at least a 15% increment? And performers will obviously get more?
Employee: Add to that economic reforms, increased productivity, the demographic dividend and the government’s sustained hard work and we should get a really big raise, right? Surely you agree the government reforms will raise growth?
HR: Yes, yes.
Employee: And the PM has said we’ll soon have ‘achche din’. Surely you agree that includes higher pay? Or are you questioning Modiji?
HR: Of course not, not at all. Oh, I suddenly remembered an appointment, have to rush. Talk to you later. Bye.
Manas Chakravarty is Consulting Editor, Mint
The views expressed by the author are personal