Fact check: Modi’s speech at the 2019 Vibrant Gujarat summit
The average growth rate of the gross domestic product, or GDP, “over the entire term of our government has been the highest of any Indian government since 1991,” Prime Minister Narendra Modi said at the inauguration ceremony of the Vibrant Gujarat Global Summit’s ninth edition, on 19 January. The prime minister also noted that India is presently one of the top ten global destinations for foreign direct investments. He claimed that under his leadership “there has been an unprecedented focus on manufacturing and infrastructure.” These statements, like several others in his speech, had one thing in common—they were either demonstrably false or obscured the full truth.
Vibrant Gujarat is Modi’s flagship biennial international investors’ summit—he launched it during his tenure as the state’s chief minister—at which he makes his pitch to bring businesses into his home state. This year, with just months to go for the general elections, Modi seemed keen to boast of the achievements under his regime at the centre.
But the prime minister appeared to take some liberties in his efforts to do so. For instance, while claiming that his leadership has led to the highest average GDP growth rate, he neglected to mention that the metric to evaluate the GDP was modified after his own government’s data suggested that GDP growth had been higher under the United Progressive Alliance government than under Modi. For several years, GDP growth was calculated against the GDP in the financial year 2004–05. In July 2018, a committee set up under the National Statistical Commission—a body constituted under the aegis of the Ministry of Statistics and Programme Information—submitted a report that calculated previous GDP growth rates against a more recent base year, the financial year 2011–12. According to the report, the average growth rate under the UPA regime stood at 7.75 percent, while the rate under the first four years of the Modi regime was 7.35 percent. Four months later, the Niti Aayog issued revised GDP data for financial years between 2005 and 2012, projecting the UPA growth rate at 6.7 percent; transforming the rate under Modi to the highest growth rate in almost three decades.
The prime minister’s claim about FDI in India obscured relevant aspects of the issue as well. Foreign investments shot up when Modi came to power, recording a growth percentage of 27 percent in 2014–15 and 29 percent in 2015–16. But in the last financial year, India’s FDI growth has fallen to a five-year low of just 3 percent. Moreover, according to the World Bank, India’s FDI as a percentage of its GDP was at its highest in 2008, at 3.65 percent, under the Manmohan Singh-led government, and has not climbed past 2.09 percent under Modi.
Modi went on to claim that his government has “worked hard to promote manufacturing to create jobs for our youth.” This seems to have been of no avail—India’s rate of unemployment has persistently increased since 2013–14. According to a survey by India’s labour bureau, the manufacturing sector reported a cumulative loss of 87,000 jobs between April and June 2017 alone. A 2018 survey by the All India Manufacturers’ Organisation revealed that micro, small and medium enterprises, or MSMEs—the focus of credit schemes aimed at job generation—saw a steady decline in jobs since 2014, and lost between 24 to 35 percent jobs over the last four years.
Modi claimed an “unprecedented focus” on manufacturing, but a November 2018 report by Niti Aayog revealed that the manufacturing sector’s growth in the GDP increased by less than a percentage point under the present regime—from 16 percent in 2014–15 to 16.6 percent in 2017–18.
Elaborating on the nature of the purported success in the manufacturing sector, Modi added, “Investments through our Make in India initiative, have been well supported by programmes like Digital India and Skill India.” This statement too, does not stand scrutiny—owing in large part to the performance of the three schemes. For one, investments under the Make in India initiative, which Modi launched in September 2014 to “transform India into a global design and manufacturing hub,” have fallen drastically short of expectations. According to a December 2016 study of 1,188 companies in India, conducted at the Institute for Studies in Industrial Development in Delhi, the manufacturing sector received 29.1 percent of the FDI inflows between October 2014 and September 2016, whereas in the previous two years, that figure stood at 47.8 percent. The study found that a large percentage of the companies that received foreign investments had been incorporated before Make in India was launched. In the case of the manufacturing sector, this figure was less than 2 percent—only eight of the 442 companies from the sector that were included in the study.
The Skill India and Digital India programmes, too, underperformed. In March 2018, Dharmendra Pradhan, the minister of skill development and entrepreneurship, informed the Rajya Sabha that 41.3 lakh persons completed training in the preceding three years, out of whom only 6.15 lakh had found jobs—a placement rate of less than 15 percent. The Digital India programme aimed, among other things, to provide broadband connections for 2,50,000 panchayats by December 2016. The government stated before parliament that, as of 21 January 2018, over 1.1 lakh panchayats had optical-fibre connectivity—the infrastructure for broadband connections. But according to a November 2018 report published by the news website The Wire, internal data of the department of telecommunications revealed that only 5,010 panchayats—less than 2.5 percent—had been provided actual broadband connections.
In his speech, the prime minister said, “We have committed to the world to work towards reducing the effects of climate change … We are fourth largest in wind energy and fifth largest producer of solar energy.” At the 2015 climate-change summit in Paris, Modi declared that India would generate 175 gigawatts of power from renewable energy—100 gigawatts of which was to come from solar energy. But in September 2018, the Indian government began implementing import duties on solar equipment, which led to a decline in new solar power capacity additions. The news website Quartz India reported that according to Bridge to India, a renewable-energy consultancy firm, the installation of solar energy units will drop by 55 percent in the financial year 2018–19, and that India will not be able to generate more than 67 gigawatts of solar energy by March 2022.
The prime minister also brought up some usual suspects—he claimed that the government bolstered financial inclusion by ensuring a bank account for each family, and that it ensured “proper sanitation in all areas—both urban and rural.” As has been widely reported in the past, each of these claims, too, obscure the truth.
The prime minister launched the Pradhan Mantri Jan DhanYojana in August 2014 to bring banking facilities into every household. Earlier this month, the Business Standard reported that though 335 million accounts were opened under the scheme, over 23 percent of them remained inoperative in 2018. The lack of adequate banking infrastructure in villages, such as local bank branches and ATMs, have also hindered effective financial inclusion.
The Swachh Bharat Mission, too, has been a failure. An indicator of its inadequacy is that Nageypur, a village in Varanasi that Modi “adopted” under the SaansadAdarsh Gram Yojana—a rural-development project that he launched in October 2014—has not been declared open-defecation free. More importantly, as Sagar writes in the cover story of The Caravan’s May 2017 issue, the statistics on the construction of latrines as part of the Swachh Bharat Mission “mask numerous vital issues facing the campaign—including, as I saw in Nageypur, the social exclusion of marginalised groups, and the lack of behavioural change.”
In a shift from the claims he made in his speech, Modi ended his speech with a promise that has borne out to be true. He invited the attendees to invest in India. The prime minister then told the corporate bigwigs in the audience: “I will be always available to hold your hands in your journey.”