Home > Uncategorized > Was the dip in State level GSDPs during NDA rule an aberration?

Was the dip in State level GSDPs during NDA rule an aberration?

Was the dip in State level GSDPs during NDA rule an aberration?



To my surprise, some of my friends were greatly upset by my reference to the dip in growth rate of state GSDP under NDA rule in my last article with Shaelja Sharma.  Since UPA is such a mess, how could have I have criticized the NDA, runs this argument.


Criticizing or defending either the NDA or the UPA is not a moral imperative for me.  I think economic and social reforms are critical to India’s growth.  I will support any party or person pushing economic reforms.  Likewise, I would flay anybody hindering them.  So to me the shabby performance of UPA on a number of issues doesn’t make NDA a holy cow.


What happened during the NDA rule?  Well the data below shows that India shining or not, economic growth rate, as captured by national GDP data, slowed down significantly in the years that NDA presided over the Central Government.  Here are the hard numbers:



Period For 5 years before NDA, 1993-94 to 1997-98 as CAGR For 6 years during NDA rule, 1998-99 to 2003-04 as CAGR For 7 years after NDA rule, 2004-05 to 2010-11 as CAGR
GDP growth [%]  6.52  5.93  8.47



Please note we are dealing with averages over 5, 6 and 7 years and these are not subject to as much random variance as annual data.  As you can see, India’s national growth rate of GDP dipped from 6.52% to 5.93% during NDA rule and recovered to 8.47% thereafter.



As Shaelja and I suggested in our article, you can read what you like into these numbers depending on your politics.  But as we have shown, the key determinant of growth has been economic reforms or the absence thereof.



So where does this “golden age of NDA rule” hype come from?  Why do we deride the UPA despite its demonstrable superior performance?  Did NDA really push reforms or did it not?  These are questions that need to be raised and debated.  The numbers show that the distinct antipathy for UPA has more to do with something other than just economic performance.



On the other hand, as the economy slows following UPA’s policy paralysis, it is also clear that if the party doesn’t push reforms it too will head for a sound drubbing at the polls in 2014.


Anyway, the point of this post was to show that the dip in growth rate of states during NDA rule, including that of Gujarat, was no “accident.”  The dip shows up very clearly at the national level as well.




Numbers and ideas shared with Shaelja Sharma.  [@ShaeljaSharma]

Categories: Uncategorized
  1. December 17, 2012 at 2:35 pm

    The dip in GDP growth rate during NDA rule was due to global recession of 1999-2002. The rise in GDP growth rate during UPA rule was due to boom in global stock markets from 2003 to 2007. Will You pl. specify the reforms enacted by UPA from 2004 till date?

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