For Leftist economists, 20.1% GDP growth is proving to be too tough to digest

Despite the devastating second wave of Covid-19, Indian economic growth touched a milestone in the quarter through June. As per the government data released on Tuesday, India’s Gross domestic product (GDP) has grown at a rate of 20.1% in the first quarter of the fiscal year 2021-2022. However, the so-called leftist economists along with few media outlets are having trouble digesting India’s achievement.

Announcing India’s massive economic growth, the Ministry of Statistics & Programme said “GDP at Constant (2011-12) Prices in Q1 of 2021-22 is estimated at Rs 32.38 lakh crore, as against Rs 26.95 lakh crore in Q1 of 2020-21, showing a growth of 20.1 percent as compared to a contraction of 24.4% in Q1 2020-21. Quarterly GVA at Basic Price at Constant (2011-12) Prices for Q1 of 2021-22 is estimated at Rs 30.48 lakh crore, as against Rs 25.66 lakh crore in Q1 of 2020-21, showing a growth of 18.8%.”

What do leftists have to say?

Just after first-quarter GDP numbers were out, left leaders along with left journalists went down to compare relative numbers of the massive rebound. Arunoday Mukharji, a BBC Journalist, in an effort to mock the government, tweeted, “Be cautious of shiny tweets & click-bait headlines on India’s #GDP numbers. India grew at 20% in the first quarter of this fiscal. Yes, there is recovery, but this is compared to the 24% contraction for the same period last year. It’s all relative and this is why context matters.

Congress leader and former finance minister P Chidambaram also took to Twitter to criticize the government and tweeted, “We are still below the GDP level in the first quarter of the pre-pandemic year 2019-20. We have still some distance to go before the economy can be said to have achieved the pre-pandemic level.”

“Before we ‘celebrate’ the 20.1% GDP growth in Q1 (April-June) of 2021-22, please pause to consider the following. This ‘growth’ is on a low, actually negative, base of (-) 24.4% in Q1 of 2020-21,” he added.

Himanshu, associate professor of economics at Jawaharlal Nehru University, said, “The fact is that the latest GDP numbers show a large sequential contraction and, when compared to June 2019 levels, show the enormity of the economic challenge. Even these numbers could see significant downward revisions as there might have been an overestimation of informal sector activity in these estimates.”

Economic boom despite Covid

If we consider the year-on-year GDP growth rate rather than quarter to quarter, the economy showed impressive growth as it shot up to record a 20.1 per cent rise in the first quarter of the fiscal year 2021-22. In the first two quarters of 2020-21, the growth was -24.4 per cent and -7.4 per cent respectively. Despite the pandemic, the country’s GDP in the April-June quarter of the fiscal year 2021-2022 rose by Rs 51.2 lakh crore.

Chief economic advisor Krishnamurthy V Subramanian, highlighting the growth, said that strong fiscal measures announced in the past year-and-half, and the pace of India’s vaccination drive have helped the faster recovery of the economy. He further said that the growth number “reaffirms the government’s prediction of an imminent V-shaped recovery made last year in August.”

However, it seems to be very convenient for the left-liberals to compare relative numbers when a massive rebound is registered, as the same “context” was not considered when the pandemic hit the country and the growth numbers fell.

Modi Government definitely learned its lesson from last year enormity when the economy was almost shut because of the Covid. Now, the government is aiming at reviving from the economic challenges it has been facing ever since Coronavirus hit the nation.