Vajpayee, Manmohan to Modi: Interesting numbers behind GDP slugfest

While the Congress and the BJP continue to fight over India's GDP numbers, new official data throw some interesting numbers on India's economic growth rate. As per a comparison of growth rates based on constant prices between the old series (2004-05) and new back series (2011-12) by Committee on Real Sector Statistics, formed by the National Statistical Commission, Indian economy clocked the highest growth rate of 10.08 per cent in 2006-07 under the first UPA government led by then Prime Minister Manmohan Singh. This was as per the new back series. 

Earlier, the highest growth rate recorded since independence was 10.2 per cent in 1988-89 during Rajiv Gandhi's rule. 

The data, which is available on the website of the Ministry of Statistics and Programme Implementation (MOSPI), say that as per the old series based on 2004-o5 prices, India's GDP growth was recorded at 8 per cent, 4.15 per cent, 5.39 per cent, 3.88 per cent and 7.93 per cent in 1999-00, 2000-01, 2001-02, 2002-03, 2003-04 respectively when late Atal Bihari Vajpayee was the prime minister. If calculated on the basis of the new series, the GDP rates for these years were 7.28 per cent, 3.93 per cent, 5.26 per cent and 8.22 per cent respectively. 

Vajpayee, who was cremated with full state honours on Friday, had left a very high GDP for his successor Manmohan Singh of the Congress. During the UPA years between 2004-2014, GDP numbers were initially high but slumped drastically towards the end of its tenure. 

The data show that GDP growth between 2004-05 and 2011-12 were at 7.05 per cent, 9.48 per cent, 9.57 per cent, 9.32 per cent, 6.72 per cent, 8.59 per cent, 8.91 per cent and 6.69 per cent for the respective financial years (according to old series). As per the new back series, the GDP growth for these years were at 7.43 per cent, 9.83 per cent, 10.08 per cent, 9.79 per cent, 7.16 per cent, 8.99 per cent, 9.42 per cent and 7.05 per cent. 

The method of GDP calculation was changed from 2012. In the last two financial years of UPA government, the GDP growth stood at poor 5.42 per cent and 6.05 per cent in 2012-13 and 2013-14 respectively. 

The data show that Singh's successor, Prime Minister Narendra Modi inherited poor GDP numbers after coming to power in 2014. However, the GDP numbers during the NDA rule has been on an upward trend, surviving twin shocks of demonetisation and GST shocks. In 2014-15, the GDP growth was recorded at 7.2 per cent. This increased to 7.6 per cent in 2015-16. This was expected to go beyond 8 per cent in the following year. However, the growth slowed to 7.1 per cent in 2016-17, the year in which around 87 per cent of the currency notes were demonetised.

The GDP seems to be back on the upward trend with several rating agencies predicting it to end up above 7.2 per cent in the current financial year. This will likely further pick up in the next financial year.  In July last, the International Monetary Fund (IMF) had forecast India's growth rate to be 7.3 per cent in the current year and 7.5 per cent in the next financial year.