Puncturing the Myth of India
The country won’t reform without a crisis. Well, according to one of the government’s own former advisers, it’s got one.
Unemployment is the highest it’s been in four decades.
Photographer: Narinder Nanu/AFP/Getty Images
India’s government has long claimed that the country is one of the fastest-growing large economies in the world. That boast was a crucial part of the ruling party’s message in India’s recent election campaign — that, under Prime Minister Narendra Modi, the economy was in safe hands. Competence and sincerity as an economic manager is central to the image Modi has sought to project.
Unfortunately, that claim looks increasingly unsupportable. Earlier this month, official government figures revealed that the economy had been slowing for three quarters. After months of denial, the government also admitted that unemployment is higher than it has been for four decades. Now, Arvind Subramanian, a well-regarded economist who was till last year one of Modi’s most senior advisers, has argued in a Harvard working paper that India’s official figures overestimate growth by several percentage points. While the government claims that India is growing at 7%, Subramanian suggests it’s actually growing at closer to 4.5%.