The Wall Street Journal has found that India, under the leadership of Prime Minister Narendra Modi, with $92 billion in corporate deals has moved ahead of China as a favoured target.
This is even more impressive when you think in terms of the fraction of GDP. Remember that China’s GDP is almost five times that of India’s. Despite such a huge gap, if India is able to beat the Chinese in terms of absolute numbers, it tells a story of the strength of the Indian economy under Modi.
The Wall Street Journal goes on to mention that:
Don’t miss the part about the “better bankruptcy system”, a reference to Modi’s Insolvency and Bankruptcy Code (IBC), that has made defaulters address Rs 3 lakh crore of stressed assets out of fear of losing control over their companies.
Also, do not miss the part about how India was once seen as “bureaucratically sclerotic”. Wonder who pioneered the system that made India seem that way? Hint: some of our “visionary” Prime Ministers who awarded themselves Bharat Ratnas might be to blame.
The numbers in the Wall Street Journal also tell a story that is quite opposite to the narrative that some people with an agenda have been feeding the public for a while now. This applies in particular to JNU type economists, some “public intellectuals” who were expecting favours from the Modi government but didn’t get any and of course one very handsome ex-RBI governor.
The distinction of India being the “fastest growing (major) economy in the world” is Modi’s crown jewel which India has held for four straight years under Modi.
In comparison, India achieved the “fastest growing economy” status just twice in the 10 years of Dr Manmohan Singh. The first was in 2007-08, right before the crash. The second time was in 2009-10, just after the crash, when Dr Singh gave a massive stimulus package that boosted the economy for exactly one year before sending it spiralling downwards. Let’s just hope this is not the kind of “economics” they teach at Cambridge.
In contrast, Modi’s India has been unshakable at the top of the global GDP growth table. This achievement is even more remarkable when you consider the fact that this was achieved despite implementing a complete overhaul of the tax system with GST.
A lot of noise has been made over “faulty GST implementation”. Of course, there are going to be glitches when a $2.8 trillion economy of 125 crore people switch to a new tax system. But “faulty” compared to what? Which country has ever done a better job of GST implementation?
A quick comparison with GST implementation around the world shows just how spectacularly well GST was pulled off. Here is the chart that shows the effect of GST implementation in Australia.
See that giant drop of 2% in GDP growth rate as Australia adjusted to GST? Now think of a developed country like Australia implementing GST with a population of just 2 crore people and a fully formalized economy. Imagine the challenges before India with its 125 crore people and massive informal sector.
And here is how Canada fared when they implemented GST:
Watch! Canada went hurtling into an actual recession… with the economy shrinking by 2.1%.
And yet, India remained the world’s fastest growing economy as it implemented GST. Modi’s India did a better job of implementing GST with 125 crore people than developed Western countries like Australia or Canada could do with their 2-3 crore people!
The world over it is understood that GST is a near-term growth depressant that is an investment in the country’s future. Modi made this investment and he kept India secure from the worst that could have happened.
At the time when GST was implemented, anyone with sense would have given Modi a break as the whole of India adjusted to a radically new tax system, slowing down growth. But not those with an agenda. They wanted to make the most of the interim, blaming Modi for the near term slowing of growth.
But the world didn’t fail to notice that India remained the fastest growing economy. That it implemented GST and reined in defaulters with a new Bankruptcy Code. We have all heard how India jumped to No. 77 in the World Bank’s Ease of Doing Business rankings, up from Rank 142 of the Manmohan Singh years.
Now take a look at this
Look at the depressing picture of global markets for the year 2018:
Wishing there were some bright spots somewhere in the world? Modi’s India is one and really the only one!
The Indian market has gained 4.1% since the beginning of the year, making it #1 in the Asia Pacific Region. In fact, the last column shows that India is one of just 2 countries to give a positive return for the year 2018, the other being New Zealand, whose economy is tiny compared to ours.
Just look at Europe! Everything down in the deep red for the year 2018:
The “best” performer seems to be a small Hungarian market that is up by a mild 0.5%. Everything else in Europe seems to be down by almost double digits!
This is the story that they will not tell you. In a year when markets have sunk across the world, Modi’s India shines.
Why? Because we are the fastest growing economy in the world. Let’s not forget that. Don’t let “mahaul” win over “data”.