When the 2014 elections were fought, there were a number of factors that gave Candidate Modi and the BJP an overwhelming edge.
One was the sagging economic record of the incumbent administration, the UPA2 government's inability to suggest any solution for that - and of course, the political paralysis. There were scandals and corruption allegations in key economic ministries.
Job creation had slowed, petrol and diesel prices had shot up, and inflation remained stubbornly high. Fiscal deficit was also high, as was the current account deficit, though the then Finance Minister P. Chidambaram was trying to tame it.
Apart from the BJP's ideology and grassroots army, Candidate Modi had a simple message that resonated with large sections of the electorate - the promise of Acche Din. Candidate Modi talked of development, creating jobs on priority, and stamping out corruption.
Now, as India prepares to vote again for the General Elections, how does Prime Minister Modi's economic scorecard read. What are the tasks that were achieved and which were not?
First, in terms of macro-economic indicators and stability, the Modi government's record has been largely enviable. With a little help from dropping crude oil prices in the first three years of his term, the Prime Minister and his Finance Minister Arun Jaitley brought down fiscal deficit (though the Fiscal Responsibility and Budget Management target was relaxed a bit last year). Not only has it brought inflation - both WPI and CPI - down, the CAD has also reached a more comfortable level.
The icing on the cake is the GDP growth. Despite the controversy over the revised methodology (and the back series recalculations), the majority of economists agree that India is easily one of the fastest growing major economies.
The big disappointment in the macro numbers is the rising unemployment. Despite the government's multiple moves to keep inconvenient data out (the NSSO report has still not officially been released at the time this magazine went to press, but the leaked report shows unemployment at a 45-year high), the fact is that multiple surveys, including CMIE's, have shown that unemployment is rising. The government's defence has been to tout the rising EPFO enrolment numbers, though that doesn't hold because of numerous problems with equating EPFO enrolment with jobs.
Among other achievements, the Modi government passed two economically significant laws - the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code (IBC). The government can also take credit for pushing forward infrastructure development, and for sorting out many problems in ministries as varied as coal and railways.
However, the problems that have mounted in the past five years are significant. Apart from the lack of employment and the paucity of jobs, wages have barely risen, particularly, real rural wages. Despite good monsoons, agricultural distress has reached record levels - forcing the Modi government to first announce major hikes in minimum support prices (MSPs), and then, taking the unprecedented step of offering direct income transfer in the interim budget leading up to the elections.
The problems in agriculture, even during good monsoons, includes higher production, lack of avenues for getting the right price, and the government's own inability to procure enough produce to make the MSP effective. This shows up in low food inflation as farmers are forced to sell produce at any price they get.
The manufacturing record of the past five years is equally lacklustre. Despite the much hyped Make in India programme, the low growth in Index of Industrial Production (IIP) numbers shows that factory activity is tepid. RBI studies show that there is still over-capacity. It also shows up in the GFCF - the gross fixed capital formation, a measure of fresh private sector investment. Its level in 2018/19 at 32.3 per cent is not even as much as that in the last two years of the previous UPA government, which were considered the worst.
Finally, the twin balance sheet problems of PSU banks with bad assets on their books and corporates with highly leveraged balance sheets are yet to be fully resolved despite the progress of IBC cases.
Trade has been another failure. In 2019, the Modi government finally hopes to reach or just surpass the 2014 levels. To add to the misery are problems it least expected to face in the run up to the elections - slowing GDP growth, lower tax revenues, widening CAD and higher crude oil prices.
In the following pages, we examine in detail the major economic drivers and indicators - agriculture, manufacturing, banking, corporate growth, trade, jobs, infrastructure.