- India's invisible PM resurfaces to address a news conference, only his 3rd in 10 years. His tenure's real asset? BJP as a "dream" opposition
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Subramanian Swamy @MMS only contribution: he refused to resign so therefore Buddhu could not become PM. - The only good news from PM's conference. He is retiring after 2014 elections. #TheekHai
Brahma Chellaney 
R Jagannathan - | Friday , January 3 , 2014 |
Inflation a concern, but India heading for better times: PM
New Delhi, Jan 3 (PTI): Prime Minister Manmohan Singh on Friday admitted the government's failure to contain inflation but said high prices have helped farmers and the country was heading for better times.”“…we have also not been as successful in controlling persistent inflation as we would have wished. This is primarily because food inflation has increased. However, we should remember that our inclusive policies have put more money in the hands of the weaker sections”, Singh said while addressing a press conference, his third as Prime Minister.The worry about inflation, he added, “is legitimate but we should also recognise that incomes for most people have increased faster than inflation.”While making a case for increasing supplies and improving marketing and logistics to contain food prices, especially of perishables like fruits and vegetables, he stressed “much of this work lies in the domain of the states.”As regards growth, which has slipped to a decade's low of 5 per cent in 2012-13, the Prime Minister attributed the slowdown to global factors but exuded confidence that the growth momentum would revive in the coming years.“We are set for better times. The cycle of global economic growth is turning for the better. Many of the steps we have taken to address our domestic constraints are coming into play. India’s own growth momentum will revive”, he added.He said that during the term of United Progressive Alliance, India for the first time in its recorded history witnessed a sudden acceleration of economic growth to 9 per cent.“This exceptional performance was followed by a slowdown initiated by the global financial crisis. Over the past couple of years, all emerging economies have experienced a slowdown. India was no exception”, he added.Singh further added that it was not just the acceleration of growth that “gives me satisfaction. Equally important is the fact that we made the growth process more socially inclusive than it has ever been.”According to a report card captioned “10 Years of Progress and Growth” released Friday, India's average economic growth rose to 7.7 per cent in the 10-year regime of the UPA government as compared to 6.2 per cent recorded in the previous decade.“Average GDP growth rate during the period of UPA government (2004-05 to 2013-14) has been 7.7 per cent despite two global slowdown in this period,” the report card said.Agriculture growth rate, it said, has been rising consistently and the sector expanded by 2.5 per cent and 3.7 per cent during the 10th and 11th Five Year Plans, respectively, and expected to touch 4 per cent in the ongoing 12th Plan period.It said the country's GDP at current sprice has increased almost three times to Rs 100.28 lakh crore during the last nine years from Rs 32.42 lakh crore in 2004-05.Similarly, per capita income has risen almost three-fold during the period.The per capita income has gone up to Rs 68,747 in 2012 from Rs 24,143 in 2004, the report card said.“Per capita income has increased at an annual average of nearly 20 per cent during the last nine years, well above the consumer price index during the same period,” it said.On rural wages, the document said it has tripled in the last year and thus improving the purchasing power of majority of people in villages.Referring to large projects, it said the UPA government has expedited and cleared as many 293 projects involving investment of Rs 5.7 lakh crore in 2013.To fast-track stalled projects, the government has set up Cabinet Committee on Investment (CCI) and Project Monitoring Group (PMG).The document said credit flow to Micro, Small and Medium Enterprises (MSMEs) has grown nearly seven times in the last seven years. The outstanding loan to the MSME sector was at Rs 5.27 lakh crore in 2012 as against Rs 83,498 crore in 2005.In the last two years, the Prime Minister’s Employment Generation Programme has supported 80,000 micro enterprises and so created job opportunities for 9.23 lakh people.Towards financial inclusion, the document said more people are now using bank facilities. The number of bank accounts has increased from 43.97 crore in 2004 to 77.32 crore as of last year.The report also said the poverty ratio has fallen steeply during the UPA regime to 21.9 per cent in 2012 from 37.2 per cent in 2004.“Under the UPA government, poverty in India has declined in an unprecedented manner. Average decline in poverty was 2 per cent per annum during 2004-2012, almost twice the rate of the preceding decade,” said the report card.It said the number of poor people came down to 26.93 crore, which was 21.9 per cent of the total population in 2012, from 40.71 crore in 2004 when the UPA government came to power. Analysis: Singh Tweets His Economic Record
By Raymond Zhong
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- Agence France-Presse/Getty Images
- Prime Minister Manmohan Singh at the G20 summit in Russia, Sept. 6, 2013.
Even before announcing he would not run for a third term as prime minister on Friday, Manmohan Singh was already getting nostalgic about his time in 7 Race Course Road.
For the past two weeks India’s prime minister has been blasting his nearly one million followers on Twitter with charts showing the country’s economic progress during his 10 years in office.
The blue-turbaned leader of the world’s largest democracy may be stepping down after general elections but his party needs voters to appreciate India’s recent economic achievements if it hopes to stay in power beyond polls this spring.
The biggest threat to the Congress party and its allies will be the opposition Bharatiya Janata Party, whose prime ministerial candidate, Narendra Modi, has a reputation for skillful economic management as Gujarat’s chief minister. Opinion polls show that Mr. Modi and the BJP are viewed as better for business and the economy.
Mr. Singh has tried to set the record straight in his recent tweets, which show the last 10 years’ growth in everything from personal bank accounts to air traffic.
While economists, executives and fund managers agree that on average it has been a great decade for India, they say Mr. Singh’s #humblebrags may exaggerate his impact.
India Takes Flight
Air traffic on Indian carriers has soared to more than 75 million in recent years from less than 25 million just a decade ago.
“Aviation has changed completely in India since 2004,” said Kapil Kaul, the South Asia head of aviation-research firm CAPA. “Prior to 2004, [the sector] was overregulated and undermanaged, resulting in very little innovation.”
Although the roadmap for fixing aviation was written before he came to office, Mr. Singh took up the reform mantle during his first term: Privately owned carriers were allowed to operate international routes, and the government spent lavishly to build new airports and modernize existing ones.
Still, most of the surge in traffic didn’t come from Air India.
Well-managed private airlines—and some badly managed ones that went out of business—brought prices down and flew to new destinations, allowing millions of Indians to upgrade their “AC 2-tier sleeper” train tickets to economy-class air tickets.
World-Beating Growth
Though it failed to overtake China, India had the second-highest growth rate of any major economy over the past 10 years. Many economists, however, would say the rapid expansion was in spite of India’s economic policies, not because of them.
“Having been prime minister during India’s record growth era, Singh can obviously claim some credit for it,” said Swaminathan Aiyar, a research fellow at the Cato Institute, a Washington-based libertarian think tank. “But the whole developing world, including once-blighted Africa, boomed at the same time. Clearly there was a global tide lifting all boats.”
Some credit should also go to Mr. Singh’s predecessor, the BJP’s Atal Bihari Vajpayee, who was prime minister from 1998-2004.
“Vajpayee laid part of the foundation for the Indian boom,” Mr. Aiyar said.
Bank Accounts Bloom
Hundreds of millions of previously unbanked citizens have opened new accounts in the past decade.
While India’s state-run banks have been reaching farther and farther into India’s hinterlands, the private sector—both big private banks such as ICICI Bank and microlenders such as SKS Microfinance—also deserves credit for helping bring more people into the formal banking system.
There’s no denying the country has made progress on financial inclusion, or access to banking and credit for a broader range of consumers. But India needs to go further.
“This is fairly standard messaging from government,” said Subir Gokarn—a former deputy governor of the Reserve Bank of India and currently director of research for Brookings India, an arm of the Washington-based Brookings Institution—when asked about Mr. Singh’s tweets.
In a 2011 speech, Mr. Gokarn noted that banking services still weren’t reaching households with yearly income below 50,000 rupees, and that bank products were still underused in the smallest villages.
Rural Road Rush
India has spent billions to build roads and highways over the past 10 years. Yet despite it being a major issue debated by politicians across the country, India has still failed to untangle land-acquisition rules in a way that would end drawn-out disputes between developers and local landowners and encourage more building.
The government’s new land-acquisition law, which came into effect Wednesday, might help, said Arpita Mukherjee, a professor at the Indian Council for Research and International Economic Relations.
Meanwhile, India also isn’t doing enough to make existing roads more efficient. There are regular traffic jams along national highways. Trucks are required to undergo inspection at state borders, where checkpoints are only manned for a few hours each day. Major expressways still aren’t well-connected with state roads, which aren’t well-connected with district roads.
Higher Education
The explosive growth in higher education in India over the last decade has been a byproduct of fast economic growth, said Eswaran Sridharan, the academic director of the University of Pennsylvania Institute for the Advanced Study of India.
But as enrollment has swelled, quality has dipped, Mr. Sridharan said. Fast-growing universities are finding themselves perpetually short of faculty to teach the flood of new students.
“There has to be much greater attention to quality—which means faculty quality,” Mr. Sridharan said.
The real value at universities lies in professional programs such as law, medicine and management, which can maintain high tuition fees because they enable graduates to get high-paying jobs.
At Indian universities, Mr. Sridharan said, these programs are currently “bare-bone.”