What the media is not telling you about our ‘booming economy’

Let's look at the official statistics.

 |  4-minute read |   22-10-2016
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The media is less gung-ho now about the growing Indian economy. Which is why there is so little discussion about it. The fabled "surgical strike" against Pakistan elicits more discussion than the ups and downs of (Prime Minister Narendra) Modi capitalism.

Let's look at official statistics. The wholesale price index, which was down to -5.1 per cent in August 2015, rose to a 23-month high of 3.7 per cent in August 2016. Within this, the index for primary articles increased sharply from -4.2 per cent in August 2015 to a high of 7.5 per cent in August 2016, with index food articles rising sharply by 8.2 per cent in August 2016 compared to -1.2 per cent the previous August.

Despite the sharp decline in the cost of fuel, the index for fuel and power increased by 1.6 per cent in August 2016 after declining for 21 months in a row against -16.2 per cent in August 2015. The index for manufactured products rose by 2.4 per cent in August 2016, against a -2.0 per cent decline in August the previous year.

The record of the consumer price index (CPI) was also poor. The CPI inflation rate was 5.1 per cent in August 2016, higher than 3.7 per cent in August 2015. Consumer food price inflation was higher at 5.9 per cent in August 2016, up from 2.2 per cent in the same period last year.

Rural and urban inflation rates grew by 5.9 per cent and 4.2 per cent respectively in August 2016, compared to 4.5 per cent and 2.8 per cent in the same period last year.

Labour Bureau data shows CPI inflation rate for agricultural labour and industrial workers increased sharply to 6.7 per cent and 6.5 per cent respectively in July 2016, up from 2.9 per cent and 4.4 per cent respectively in July 2015.

money-embed_102216095041.jpg Rural and urban inflation rates grew by 5.9 per cent and 4.2 per cent respectively in August 2016. (Photo credit: India Today)  

Merchandise trade for exports/imports, August 2016

Exports which were $21.5 billion fell by -3 per cent compared to April-August 2015. Imports which were $29.2 billion fell sharply by -15.9 per cent in April-August 2016, in contrast to the previous year. The overall trade deficit was $7.7 billion or down -40.6 per cent in contrast to April-August 2015-16. 

These figures give lie to media and party propaganda that exports are doing well. These are official statistics which are recognised internationally.

Industry growth: sector-wise, July 2016 (per cent)

General Index: latest production figures record a decline of -2.4 per cent over financial year 2014-2015. Mining: production figures are up by just 0.8 per cent over the last financial year, 2014-2015. Manufacturing is down by -3.4 per cent in the last financial year.

Electricity is up by only 1.6 per cent over the last financial year, 2014-2015. Capital goods which grew by 6.4 per cent in 2014-15, slumped to -2.9 per cent in 2015-2016 - that is a relative decline of -29.6 per cent between the two years.

Index of industrial production, July 2016

The growth rate of the IIP declined to -2.4 per cent in July 2016 compared to 4.3 per cent in July 2015. Similarly, manufacturing segment production fell by -3.4 per cent in July 2016 compared to 4.8 per cent in July 2015.

Consumer goods rose marginally to 1.3 per cent in July 2016 compared to 1.1 per cent the previous year. The capital goods segment had a substantial contraction, with a steep fall of -29.6 per cent in July 2016 against growth of 10.1 per cent in July 2015.

Conclusion

Using official data and estimates, it is clear that our economy is not doing well. This detailed data is not reported in the media or statistics provided to the legislature or the public. Why?

Because a spin on official statistics is sought to hide existing realities. This, if anything, will not diminish poverty, illiteracy or unemployment, but will instead lead to priority in funding to the relatively privileged.

Also read: How India should see Moody's forecast on its banking sector

Writer

Kamal Mitra Chenoy Kamal Mitra Chenoy @kamaichenoy

The writer is an academic and activist.

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