In economic analysis, a decade is a long enough period to fit a trend. The jury is still out on how historians would judge the UPA decade of 2004-14. However, some statistics stand out.
India’s gross domestic product (GDP) grew at an annual average of 7.6% during the period, including the two latest years that have been characterised by a crippling slowdown. It is an enviable achievement by any standard, particularly at a time when the US and the European Union were reeling in recession.
India’s national income is within striking distance of crossing the $2 trillion mark joining the elite group of globe’s richest economies. The world has been peering curiously at the stuff bubbling in the Indian manufacturing laboratory with top companies jostling against each other to own a slice of the market that should triple its size in the next decade, if not earlier.
India’s per capita is nearly Rs70,000 a year. The figure gives an idea of the standard of living of the people, although it hides a truism: the richest Indians may have driven much of the growth in income. Besides, adjusted against inflation, the jump in average income may not have been as scorching over the last decade.
As per government data, even during the rosiest years of growth, between 2004-05 to 2009-10 when growth averaged 8.43%, the economy generated no more than 2 million jobs for the 55 million people who joined the workforce.
Prime Minister Manmohan Singh, in his press conference on Friday, acknowledged low employment generation is an aspect of performance, which the government is working hard to correct.
Yet, the regime led by an economist PM has achieved a substantial body of work to demonstrate its intent to dispel India’s image as a ‘welfare laggard’. If the first term of the UPA government was about proof of concept — growth with equity, the next has been about proof of delivery. India still has a long way to go before it can get food into every mouth that needs it.
The Food Security Act, promises to achieve that. Fertiliser and fuel prices are in the process of being fully decontrolled; the Centre is in the last stage of discussions with states for a unified goods and services tax, and a direct tax code is nearly frozen. In the final analysis, profit maximisation, policy reforms and politics should cease to be mutually exclusive objectives.
There were signs that the UPA sought to strike this equilibrium, although a lot remain unanswered on its many methods of administrative arbitrariness.