PM Modi’s brand of economics, popularly known as ‘Modinomics’ withstands the test of time, and PM Modi’s unconventional and often disruptive style of functioning style of functioning stands vindicated. India has retained the tag of fastest growing major economy in the world even as India’s GDP grew at the rate of 7.7 per cent in the last quarter of the fiscal year (January to March). India has beaten China which recorded a growth rate of 6.8 per cent for the same quarter in terms of GDP growth. For the full fiscal year, GDP growth rate has been recorded at 6.7 per cent.
As stated by the Central Statistics Office (CSO), the enhanced growth rate has been fueled by rapid growth in all major sectors. While agriculture sector grew by 4.5 per cent, manufacturing sector recorded a growth rate of 9.1 per cent and construction recorded a growth rate of 11.5 per cent. There has been a constant and rapid spike in economic growth. While GDP growth was recorded at 5.6 per cent in the first quarter, it rose to 6.3 per cent in the second quarter and further picked up to 7 per cent in the third quarter.
Finance secretary Hasmukh Adhia has remarked that the constant increasing trend of GDP numbers over the last four quarters indicates that the structural reforms undertaken by the government is now bringing rich dividends in the form of better GDP growth rate.
The government has succeeded in keeping the growth rates high but it has also managed to keep the fiscal deficit for the fiscal year 2017-18 down to 3.53 per cent of the GDP. This is in line with the fiscal deficit targets. With such healthy indicators, it seems that Indian economy is set to remain on the right track and the future of economic growth in India looks bright. Modi government has decided to keep the growth forecast for the current fiscal year unchanged at 7.5 per cent. There has been strong growth in the infrastructure industries complemented by a pickup in manufacturing and investment. Economic Affairs Secretary Subhash Chandra Garg made it clear that even though there has been some downward revision by Moody’s and other agencies owing to the changing oil prices, there is no one to one relation between oil price and GDP growth. He made it clear that the government is not going to revise its growth forecast for the fiscal year 2018-19. Therefore, it seems that India’s glorious growth story is here to stay and GDP growth rate is going to remain on the higher side. Even the CII Director General Chandrajit Banerjee opined that the economy is back on track and set for a strong recovery after natural contractions during the implementation of Demonetisation and GST.
This is the highest GDP growth rate after the historic economic reforms, Demonetisation and introduction of GST. This record growth rate has, therefore, shattered the myth that Demonetisation and GST were introduced in haste and that it will irreparably damage the economy. With a year to go into the 2019 elections, it is clear that the Modi government has successfully carried out two humongous reforms without any collateral damage to economic growth. This must be taken as a testimony to the fact that Modi govenment has strengthened the foundations of Indian economy. Unlike the UPA era, when the economy was in tatters, Modi government has ensured that the economy progresses on the right path.