10 yr average GDP growth joke UPA government

An old saying goes ‘People have drowned trying to cross a river just three feet deep on average.’ Averages could be deceptive. Since they take into account all the datapoints to arrive at a number, even outlier observations included could result in mis – representation affecting the average.

UPA government fig leaf of defense of its poor economic track – record is that over its 10 yr rule the economic growth rate averaged 7.6% vs 5.9% under NDA government. But what UPA conveniently forgets that the people of India had already rewarded them for the stupendous growth achieved under UPA 1, the misery inflicted on the economy in UPA 2 avatar reflects in the economic growth collapsing to just 4.5%. This coupled with runaway inflation ~ 10% p.a over past 5 years will guarantee a hammering of a life for the Congress primarily in the coming elections

S Aiyar has this http://blogs.timesofindia.indiatimes.com/Swaminomics/entry/upa-s-10-year-averages-are-just-statistical-spin on the UPA statistical juggelery. 

“Analysts” and congress spin doctors in their desperation are resorting to the “10 yr average growth” joke.

GDP is a lagged indicator of growth. Meaning work done in a period gets reflected in the GDP figure of a later period. Policies of NDA laid the groundwork of a buoyant economy, the fruits of which started showing in the NDA regime itself with growth of 8%+.This one reading prompted the BJP in pre – mature celebration resulting in the ‘India Shining’ campaign. Since the trickle down effect of its policies were yet to be experienced, people took offense to the blatant show of prosperity wherein in reality it stil was working its way down the pyramid.

Although India did shine, albeit a bit too late for the BJP, the fruits of which were reaped by the Congress. The economy grew at a rapid clip in the 2004 – 2009 period. Rising GDP and the subsequent per capita incomes and poverty alleviation resulted in election windfall for the Congress, whose joy knew no bounds since a robust economy was served to them on a platter by the previous government. As luck would have it, its after effects lasted right till the time they were up for elections in 2009. And voila ! they won that election hands down with Congress powered to a 200 + seats on its own. 

But tables turned since 2009. Within 8-9 months of its re – elections scams started surfacing. Inflation reared its ugly head due to the massive deficits run by the UPA to fund its MNREGA scheme (~ 30000 Cr annually). Robust economic growth and the resultant buoyant tax receipts correctly emboldened the UPA 2 to further its social welfare schemes. But they forgot that they need to have a chair to sit when the music stops in the game of musical chairs. Policies which further economic growth were jettisoned, scams started tumbling out, indecisive prime minister compounded matters. Its image took a beating. Inflation ran amok, GDP growth halved to 4.5%.

Only if the UPA had simply apologised for the mess they have created and promised corrective action then perhaps, things would have been different. But justifying the wrongs by sending lawyers on national TV irritated people even more. 

Hammering royale awaits the Congress come 16th May 2014.  

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