MISMANAGEMENT OF ECONOMY

THEN OR NOW?

In the last twenty months, we have often heard, with increasing intensity, the die hards mouthing platitudes, defending, not only the performance of the present Govt, but also blaming the lack of visible change in economy to the disasterous performance of the two previous UPA govts. UPA (Actually Congress) bashing has become fashionable mostly for those who understand nothing of the performance indicators of governance, the historical figures and what is prevalent now.

Speaking of historical figures, the perusal of these over the years, speak for themselves. GDP for the year 1950 - '51, at prices of 2013 - '14 was Rs10,036 crores. In the next 27 yrs, the GDP grew ten fold. the % GDP grew at an average of 3.54. During the next three years of Janata govt saw the growth drop to 2.59. In the next 9 yrs of Congress Rule, the GDP grew nearly three times, with the % growth averaging 5.52. Again during the five years of Narasimha govt, (The formative years of liberisation), the GDP almost doubled, with the % growth averaging 5.23. In comparison, during the next 2 yrs of Opposition govts, the GDP, despite liberisation, grew only at 5.75. During the next 6 yrs of NDA I & II, the % growth averaged 5.5. Despite the world vide severe recession post 2008, when growth rates went negative in most of the Western world and most of them still trying hard to recover from it, the UPA I Govt ensured that GDP almost doubled and % growth averaged 8.43. The post recession 5 yrs of UPA II, the GDP grew 1.71 times and % growth averaged 6.68. In all its 10 yrs, the two UPA govts averaged 7.56.

True to its colours, the NDA III, by taking the prices of 2011-2012, (GDP-wise, the worst year), as the base prices, changed the goal posts and artifcially boosted its own growth figures 2014 - 2015 to 7.3, to make the growth figures of 2012-2013 & 2013-2014, as per the earlier base year of 2004-2005, look poor in comparison. Earlier, the base years were changed every 10 years. As per that norm, the new base year should have been 2014-2015, but the tricksters picked on the year of worst performance, be it GDP, WPI or CPI.

After the damage was done in the minds of the Indian diaspora, the Govt did upgrade the growth figures of these two years to 5.1 & 6.9 from the original figures of 4.5 and 4.7 with the earlier base years.All the improvement that the NDA III, therefore made with the help of sharply falling crude prices is a mere 0.4%, for which they have bragged no end!(http://www.thehindu.com/business/Economy/base-year-change-pushes-201314-gdp-growth-to-69/article6839570.ece).

If recalculate the pre-2012 figures with the prices of 2011-2012 as the base, the average of the 10 yrs of the two UPA Govts would be a whooping 9.93. Compare that with the 6.9 of the NDA IIIs first year in office or, for that matter, with the average growth figure of 7.74 of the NDA II, (Upgraded by change of base year). This despite the world wide recession with effect from 2008, which affected our economy for 6 out the 10 yrs of the two successive UPA Govts.

The two UPA govts were headed by an internationally acknowledged economist. His international stature shall not diminish an iota by UPA/Congress bashing or the canard spread by the members of the Parivar. Whom does the NDA III have? The two Js? Or is it the man himself ?

Let us look at the a few key economic factors during the life times of the NDA II (1999 - 2004) and UPAs I & II, as tabulated below :

Ser No	Item	NDA II (1999-2004)       Av	% Change      in 5 yrs	Values at Biginning of UPA I (2004)	Values at End of UPA I (2009)   Av	% Change in 5 yrs	Values at End of UPA II (2014)    Av	% Change in 5 yrs
1.	GDP(%)	5.74	12.7	6.2	8.48	36.77	7.17	- 15.45
2.	Crude Price $/brl	25.88	54.50	37.66	60.85	61.58	110.00	80.77
3.	CPI Inflation	3.87	723	3.78	14.97	296	5.86	- 60.85
4.	US$-Re Exchange Rate	45.90	4.83	45.13	48.37	- 7.17	61.00	- 26.11
5.	Nifty	Av – 1278          ’04 – 1819   (5 yr Growth-71%)	Av –20  @’04 rate-71.1	1819	3211	76.53	7359	129

Table 1

Ser No	Item	Values at the Biginning of NDA III (2014)	Values at the End of First Year of NDA III (2015)	% Change	Value As on Date (Jan 21, 2016)	% Change Since 01 Apr 2015	% Change Since May 25,  2014	Remarks
1.	GDP(%)	7.17	7.46	4.04	7.40	- 0.08	3.20
2.	Crude Price $/brl	110	50.95	- 53.64	27.88	- 45.27	- 74.65
3.	CPI Inflation	5.86	5.84	- 0.34	5.61	- 3.94	-4.27
4.	US$-Re Exchange Rate	58.41	64.12	- 9.78	67.88	- 5.86	-16.21	Espected to fall further to 70/$ in the next 6 months
5.	Nifty	7359	8586	16.67	7276	-15.26	-1.13

 Table 2

PROVISIONAL OUTCOME FOR 20013 – 2014 & 2014 - 2015

Particulars	Absolute No. (INR in Crores)		Remarks
	2013-2014	2014-2015
Revenue receipts	633,933	693,773	Increase mainly due to – ·    Sale of – ·  PSUs ·  Auction   of resources ·    Excise duty  on POL
Gross tax revenue	743,709	795,686
Capital receipts	529,858	542,615
Total receipts	1,163,791	1,236,388
Revenue deficit	371,242	401,775
Fiscal deficit	516,390	532,381

    

Table 3

Exports declined 3.77% YOY in Dec 2014; it further declined by 14.75% YOY in Dec 2015.

Both Sensex and the Nifty are below the May 2014 levels. Infact, bith are on a 29 month low. Investers have lost billions in the Market with its prolonged bear run, with no sign of revival. 

In addition to the oil import bill having been slashed by about Rs5 lakh crores, the auction of 2G spectrum and the coal blocks, ordered by the SC, has fetched another Rs2 lakh crores to the Govt's coffers. And yet, The GDP still refusing to budge and inflation is threatening to spiral up, specially with the purchasing price of Re having been sharply reduced by over 16%.

Arhar dal prices rose from Rs60/Kg in May 2014 to Rs120/Kg in May 2015, an annual inflation of 100%. It further rose to Rs220/Kg by Dec 2015, a whopping annual inflation (Projected) of 143%.

Tomato prices rose from Rs10/Kg in May 2014 to Rs40/Kg in May 2015 and further skyrocketed to Rs80/Kg by Dec 2015.

Prices of onions, which had gone up to Rs100/Kg, have fortunately come down.

Despite the crude prices having nose dived to 1/4th of the prices prevailing in May 2014, the retail prices of petrol and diesel have been reduced only by about 20%. 

It is cheaper now to be non-veg than be a vegitarian!!!

More profitable to be a Politician than a Professional!!!