It is important to analyse the GDP growth and the inflation data relatable to various governments, under various Prime Ministers, post liberalization (post-1991). The data is given in the Featured Image. While analyzing the chart, two important facts have to be kept in mind:
Firstly, that the average GDP growth of 7.3% during the five years of PM Narendra Modi is on a much larger base than that of his predecessors. The growth rates are higher. A higher growth rate on a larger base is not only more difficult, but also has a multiplier effect.
Secondly, during the five years of UPA-2, inflation varied between 12.2% and 8.4%. In 2013-14, the UPA Government left behind an unacceptable annual inflation figure of 9.4%. It took time for this high inflation figure to be moderated. In the five years of PM Modi, the inflation figure has been 5.9%, 4.9%, 4.5%, 3.6% and 3.9%. Once it moderated in the first year of the present NDA Government, it has consistently been kept in check, averaging well below 5%, and the lowest in the last 28 years.
When PM Modi came to power, India was the tenth largest economy in GDP terms in the world. Presently, the fifth and sixth economies, namely United Kingdom and India, are within a very narrow range. A marginal fluctuation of currency values alters the size of the economies. India is projected to grow at 7.5% in 2019-20. This will conclusively ensure that India, at the end of the next Financial Year, will become the fifth largest economy in the world.
The McKinsey Global Institute reports that the size of India’s middle-class is growing very fast – from 14% in 2005, it has doubled to 29% in 2015. It is estimated to go all the way to 44% in 2025.
With the kind of transfer of resources to rural India which have been made in the past five years, a huge aspirational class is emerging even in rural areas. This is an indication of what the social profile, purchasing power and the quality of life of Indians are going to have, in the decades to come. To ensure that this happens as projected, it is a pre-requisite that India needs a decisive leadership, consistency in policy direction and a strong and stable government. An unworkable alliance (such as the numerous political Gathbandhans now in the making) with maverick leadership, whose longevity is a suspect, can never achieve this.
Who should be India’s Prime Minister from 2019 to 2024, perhaps the most important period in post-independence India? I say this because, with a 7.5-8.0% growth rate, we can become the world’s fourth largest economy by 2026 – within the next seven years – with a GDP of $4.8 – 5.0 trillion. Germany – currently the world’s fourth largest economy – will (AT BEST) have a GDP of $$4.88 trillion by 2026.
Which individual can deliver this growth, without compromising on inflation? Should s/he be constrained by his/her rival aspirants who have reluctantly supported him/her out of mere dislike for a common opponent, or does India need a PM with a clear mandate as in 2014. Only such a PM can deliver growth and satisfy the Nation’s aspirations.
Unfortunately, as I have predicted in my book 1914 NaMo or MoNa – written in Feb 2018 and published in Apr 2018, MODI WILL NOT BECOME PM FOR A SECOND TERM. Whosoever becomes the next PM will undoubtedly implement populist measures, which is never good for any economy.
To find out why, get your own copy of the book 1914 NaMo or MoNa or from Amazon, Flipkart, or Infibeam.