Here's a quick look at the numbers at the end of each quarter starting with March 2009 through March 2012, right after UPA-II came to power. The numbers, while not yet alarming, still tell a story of an economy that is now in urgent need of jumpstarting.
Gross Domestic Product
The Reserve Bank of India’s key priority is to manage inflation as well as liquidity. In the Indian scenario, however, it is a highly challenging job to manage growth while keeping inflation in check. Given the large number of poor in the country, the RBI’s mandate to keep prices down is particularly tough. In the past, the central bank has said that India’s sustainable rate of growth without stoking inflation is 7 per cent. Here is how India’s inflation has grown during Mr. Mukherjee’s term. The highs also reflect a period when FII money was pouring into India, which was then a safe haven for investors.
Economists have pointed out that one of the biggest hurdles to India’s growth story remains the fiscal deficit, or the gap between the government’s income and its expenditure. In the first year of UPA-II, it was 6.8 per cent, almost one percent less than the 7.8 per cent in fiscal 2009-09. Since then, it has been steadily downhill. In FY2012, Mr. Mukherjee overshot his stated target of 4.76 per cent of GDP to 5.9 per cent. He has projected 5.1 per cent for the current fiscal.
The rupee has been plagued by global as well as domestic concerns as the dollar has been appreciating against a whole basket of currencies. The Indian currency hit its lowest level of 57.33 to the dollar on May 22, in its worst week which saw a fall of over 3 per cent. The rupee has now fallen over 21 per cent in the last one year and nearly 7 per cent in 2012. The depreciation in the Indian currency means that the import bill has risen steeply, contributing to the fiscal deficit. To be fair, there is little that Mr. Mukherjee could have done to stem the rupee’s fall, as managing currency volatility is largely the domain of the central bank.
The stock markets are usually an accurate barometer of the economic climate, and reflect the mood of industry as well as investors. The chart show the initial euphoria of the markets after UPA-II came to power and managed to ring-fence the Indian economy from the financial meltdown that was going on in the West. Since then, however, it has been largely downhill with only a slight uptick this year in the run-up to the Budget.