Friday, July 10, 2020
Home Economy and Finance The Print uses year old data to predict doomsday for BJP in assembly elections

The Print uses year old data to predict doomsday for BJP in assembly elections

The entire analysis is just wishful thinking on the part of Shivam Vij as he picked up the data point from at least a year ago when we were just witnessing the revival of the rural economic activity post the initial transition period of demonetization and GST.

Also Read

Karan Bhasin
Karan Bhasin is a political economist by training and has diversified research interests in the field of economics. He tweets @karanbhasin95.

It has become a routine for commentators to talk about a “rural distress” and base it as the sole basis of an electoral forecast. It is hilariously amusing as well as concerning to note the growing divide between the fate of Rural India and what the commentators sitting in Delhi make of it.

An article published by The Print, authored by Shivam Vij, talks about why Prime Minister Modi may lose the election due to a prevalent “rural-distress” which may dampen the electoral spirits of NDA in 2019 just as it did in 2004.

The entire analysis is just wishful thinking on the part of Shivam Vij as he picked up the data point from at least a year ago when we were just witnessing the revival of the rural economic activity post the initial transition period of demonetization and GST.

It’s almost hilarious to pick up a data value from a year ago and construct an analysis for the coming year and base the outcome of the State Elections as an indicator of the existence of a “rural-distress” or the absence of it.

As far as the electoral contest is concerned, I believe the outcome on 11th December would invariably give a sound answer to these commentators as the rural sweep is well on the cards across the three states that were mentioned by the author. But the issue is not about whether there will be a rural sweep or not, but the issue is on this ill-founded pessimism on the Indian Economy at a time when our fundamentals are strong. In a separate article I will certainly provide my projections for the Financial Year (FY) 2018-19 but let me provide a very brief response to the article.

The article in question talks about an economic slowdown that is being projected for the year ahead. Will there be a slow-down in the economy? Compared to the GDP growth rate of 6.7% in FY 2017-18, growth will only accelerate in FY 2018-19. Q1 FY 2018-19 estimates were at 8.2% which clearly shows that there’s no case to argue for an Economic Slowdown in the year FY 2018-19.

Yes, global growth will slow-down in this fiscal but then, the last couple of years saw a marginal increase in exports so the impact of a global slowdown may not be as severe as being projected. The reason behind this is the strong growth in demand that India has witnessed this fiscal and a bulk of this demand has come from the rural areas. The article also cites Increasing Oil Prices to be a downside risk to India’s growth, but it conveniently ignores the moderation in the international oil prices and the impact of India’s treaty to purchase Oil from Iran along with the waiver from sanctions that the US has provided to India.

Clearly, the author does not understand macroeconomics and has failed to provide an argument so as to why a slowdown is possible in this fiscal. In fact, the projected forecast for the FY2018-19 is of 7.2-7.5% GDP growth rate which is considerably higher than the 6.7% FY 2017-18estimates, so the entire argument of a slowdown is façade and should not be taken too seriously.

Another issue he highlighted was on the rural wage growth rate using the CMIE data. Let us debunk this myth. The real rural wage growth for men and women has been positive which means that even after inflation adjustment, the incomes increased between January 2017 and January 2018. With an increase in nominal wages and low inflation, real wages are bound to increase compared to the year before.

Even though the growth rate slowed a bit in January 2018 from January 2017, given that it’s still positive it shows that the wages are growing. Another thing worth noting is that PM-ASHA has come into effect so the growth rate in real rural wages have started to accelerate since the last month. This in itself represents the fact that the data point considered in Shivam Vij’s article published in The Print does not take due cognizance of such facts and latest available data. As a result, it would be unwise to draw any inference based upon the data point used by the author in their original article.

Besides, another important issue is of low inflation, as highlighted in the original article. Without due consideration of why there is low inflation, he has made an assessment on rural distress. The price realization and farm income have gone up in this Kharif season due to PM-ASHA which means that food inflation should have gone up. Despite that, the reason why the key inflation indicators remain is due to the fact that GST has reduced the effective tax rates on most commodities.

It is this fact along with the structural transformation that the Indian Economy is undergoing which is ensuring that the inflation figures continue to remain consistent within the 5% mark. The increase in the sale of tractors along with the strong rural demand further indicates the absence of a rural distress.

The entire narrative of rural distress is a convenient illusion of those who are trying to speculate a repeat of 2004 like outcome in 2019, but what they seem to undermine is the impact that schemes like Ujjwala, Swachh Bharat, Saubhagya electrification scheme, PM Awas Yojna and Ayushman Bharat are going to have in transforming the lives of the poor who reside in Rural India.

I may not be surprised if, on the 11th December, we witness a strong rural sweep, a trend which may very well continue in 2019. For all the wishful thinking of such analysts, it is about time they go to the ground and see what the pulse of the people is, for Delhi gives a very wrong idea of what people of India feel.

  Support Us  

Whether NDTV or 'The Wire', they never have to worry about funds. In name of saving democracy, they get money from various sources. We need your support to fight them. Please contribute whatever you can afford

Karan Bhasin
Karan Bhasin is a political economist by training and has diversified research interests in the field of economics. He tweets @karanbhasin95.

Trending now

Delhi anti-Hindu riots: Sahil’s father Parvez died 3 times, in 3 different ways, in 3 separate locations. 16 Hindus named in the FIR

Sahil Parvez had stated that his father was shot in front of their house in his statement to the media. His complaint letter to the police several weeks later suddenly shifts the location, identifies 16 'attackers' by name and makes a lot of contradictory claims, read details.

The Wire issues half-hearted correction after being called out by NCPCR for their blatantly fake news about ‘eight-fold increase in complaints post lockdown

The Wire retracted it after the author of the article said that she had no evidence to support her stunning claim.

The Wire accused Yogi Adityanath of being ‘casteist’ for not killing Vikas Dubey hours before the encounter of the gangster

Notorious gangster, Vikas Dubey, who was arrested from Ujjain, Madhya Pradesh was killed in an encounter in the wee hours of the morning on Friday

Vikas Dubey killed in an encounter after he attempts to flee from police custody: Here is what happened

The encounter broke out between Vikas Dubey and the Uttar Pradesh Special Task Force (STF) after the gangster tried to flee upon reaching Kanpur.

Delhi Riots Chargesheets: Before murdering Ratan Lal, the Islamist mob had held 2 other police constables hostage

The chargesheet filed by Special Investigation Team of Delhi Police in the murder of Ratan Lal and deadly attacks by rioters on IPS Amit Sharma and IPS Anuj Kumar mentions at least 17 accused.

The curious case of ‘Drone Boy’ who has made 600 drones using broken mixer grinders and televisions. A fact-check

While 'drone boy' Prathap NM has claimed to have made 600 drones using e-waste, not a single photo or video of them exist

Recently Popular

Netizens ask Netflix to cancel comedian Kenny Sebastian’s special show after he hurls obscene abuses

Social media users are demanding that Netflix reconsiders special show of Indian comic Kenny Sebastian after he was allegedly found hurling obscene abuses to people on his Instagram page.

The curious case of ‘Drone Boy’ who has made 600 drones using broken mixer grinders and televisions. A fact-check

While 'drone boy' Prathap NM has claimed to have made 600 drones using e-waste, not a single photo or video of them exist

Jyoti Basu is the mass murderer India forgot

Please don’t feel bad about speaking ill of the Late Jyoti Basu. If there is another world, be certain that there are (at least) 28,000 voices from the other side backing you up.

Only Muslims go to heaven, Ravish Kumar-like non-Muslims can only hope for a mild level of hell: Dr Zakir Naik explains

Naik said that virtues like honesty and charity cannot ensure qualifying marks for heaven or Jannah. Only Muslims can go to heaven and non-Muslims will go to hell by default, he says.

After obscene comments, clip of comedian Kenneth Sebastian calling Sanskrit ‘most useless language ever’ goes viral. Watch video

In the video titled "Journey to the centre of my brain", Sebastian is seen thanking God because 'all the people who spoke Sanskrit are dead'.

From Vikas Dubey has reached Nepal to he may be encountered ‘because he knows dirty secrets’: Read how conspiracy theorists spun yarns

As Vikas Dubey was on the run, the journalists kept themselves busy conjuring up various conspiracy theories.

Delhi anti-Hindu riots: Sahil’s father Parvez died 3 times, in 3 different ways, in 3 separate locations. 16 Hindus named in the FIR

Sahil Parvez had stated that his father was shot in front of their house in his statement to the media. His complaint letter to the police several weeks later suddenly shifts the location, identifies 16 'attackers' by name and makes a lot of contradictory claims, read details.

“I am proud of UP police”, says the father of a martyred UP police officer after Vikas Dubey was killed in an encounter

Urmila Verma, the wife of deceased constable Sultan Singh, said that the death of Vikas Dubey had brought relief to her soul.

The Wire issues half-hearted correction after being called out by NCPCR for their blatantly fake news about ‘eight-fold increase in complaints post lockdown

The Wire retracted it after the author of the article said that she had no evidence to support her stunning claim.

1 lakh km of road built with plastic waste, Modi govt saves Rs 30,000 per km: Read about the revolution in road construction

In 2016, Union minister Nitin Gadkari had announced the usage of plastic waste in road construction

Hours before Vikas Dubey was killed in encounter, a petition was filed in Supreme Court seeking protection for the gangster

Before Vikas Dubey’s encounter, one Mumbai-based petitioner had filed petition in SC to prevent UP police from encountering him

Police recover seven crude bombs from properties connected to Vikash Dubey, some from house taken care of by the gangster’s driver

Vikas Dubey, who was arrested yesterday from Ujjain, was killed in an encounter in Kanpur on early morning on Friday

Police personnel injured in Vikas Dubey encounter did suffer bullet injuries: Here is what the doctor said

The doctor who treated policemen injured during the Vikas Dubey encounter confirm that they were hit by bullets

Congress leader Udit Raj’s organisation makes derogatory comments against Brahmins, compares the community to ‘pigs’

Dalit organsation All India Parisangh run by Congress leader Udit Raj insults Brahmins by comparing with pigs

Nepal: Lawmaker removed from House of Representatives for pro-India stand, had blamed China for the new map

Sarita Giri of the Samajwadi Party Nepal has been removed from her position of a member of the House of Representatives.

Nizamuddin Markaz: Delhi Court sets 60 Tablighi Jamaat members from Malaysia free for a ₹7000 fine

60 Malaysian nationals who had attended Nizamuddin Markaz violating visa norms freed by Delhi court on fine of Rs 7000 each

Connect with us

235,314FansLike
402,568FollowersFollow
272,000SubscribersSubscribe